Advertisers are spending less on desktop pre-roll and shifting more dollars into cross-screen formats, if video ad platform TubeMogul’s first-quarter results are an indicator.
Nondesktop pre-roll spend (including mobile, social, TV and traditional display ads) grew from 37% last year to 43% – or close to $50 million – of total spend running through TubeMogul’s platform in Q1.
That nondesktop video figure is up dramatically since the company’s IPO in July 2014, when cross-screen was only 5% or so of spend.
“Programmatic TV represented 10% [of spend] in the quarter, which was about 30 times what we saw last Q1,” Brett Wilson, TubeMogul CEO, told AdExchanger. “At the same time, our cross-screen capabilities are driving more spend. Mobile, social, display and PTV represent big growth opportunities.”
TubeMogul’s Platform Direct business, which is software that can be used on a self-serve basis versus as a managed service via an insertion order, grew 65% YoY and now represents 81% of total spend on Tube’s platform.
Total advertiser spend in Q1 was $112.8 million, up 58% YoY, while total revenue in the quarter was $42.1 million, a 39% increase.
Brand and agency clients that sign on as Platform Direct customers typically have longer lifetime value for the company, according to Wilson, who said that portion of its business is more scalable and thus incurs lower operating costs than its managed services side.
“What we’ve seen is when we sign up clients [on Platform Direct], they don’t leave the software and they spend more each year,” he said. “If you look at our Platform Direct spend last year, 82% of it came from clients we signed in prior years so it’s a much more predictable business for us.”
TV & Social
In addition to prioritizing sales of its software through a platform model, TubeMogul is ramping up its private marketplace offering called “On Demand” (formerly known as TubeMogul Select Access).
TubeMogul characterized this portion of its business as broadcast-quality content like episodic TV for streaming across desktop, tablets or connected TV.
More than 50 broadcasters are partners, including Univision and Discovery Communications, which recently expanded its partnership with TubeMogul to include “TV Everywhere” inventory such as its Discovery Go app.
Wilson said On Demand inventory is premium inventory not available in exchanges.
“We go to publishers, pre-integrate them into TubeMogul, but advertisers don’t get access until they go through a two-step process,” he noted. “The idea is we let publishers control the rules of the road, so [once the advertiser is fully approved] it’s available for purchase within their account.”
TubeMogul now classifies about 22% of total spend as “private” inventory, meaning half are deals that advertisers are setting up directly through publisher relationships, which Tube helps execute, and the other half are On Demand deals.
TubeMogul is also pushing into social video, particularly on Facebook and Instagram, where it claims 40 advertisers – including Lenovo, Kraft and Expedia – have run more than 100 video campaigns. TubeMogul became certified as a Facebook Marketing Partner this year.
TubeMogul also shared an update on its Bot Traffic Credit Program – or automatic refunds to client accounts for any inventory deemed nonhuman via its partner, White Ops. Wilson said the company refunded fewer than 20 clients this quarter, out of a total client base in the hundreds, so there was little impact from a revenue standpoint.
“We already minimized a lot of fraud, so this was more a matter of making this official as a policy,” he said. “We do think it’s something that makes us more competitive.”
