Tubemogul’s Burch: Video Deserves Its Own Platform and Set of Technologies

David Buch, TubemogulWhile many of the buy-side RTB companies were mainly focused on capturing market share in the display advertising market, Tubemogul quickly pounced on video. Getting to market quickly with a well-positioned product paid off, and Tubemogul is now the largest buyer of RTB inventory, serving 9 billion video ads per month. In December the company recently raised an additional $20 million and 2013 will see the market defend its market share against a variety of new market entrants. VAN spoke with David Burch, Tubemogul’s Director of Communications, about the funding, the future of the Tubemogul platform, and how programmatic video is currently perceived by the rest of the market.

Congratulations on your recent round of funding. What will TubeMogul be using the new funds for?

Thanks. The funding will be used to continue investing in technology and further expanding into markets throughout Europe, Asia and Latin America. We also plan to significantly scale existing offices, with the UK as a major priority.  Germany will be one of the markets we focus heavily on and we intend to enter that market in a big way, and we have similar plans for Brazil. We doubled our staff in London and globally in the last year and we will do that again this year, probably within the first six months, to keep up with the growing demand.

As many of the ‘display DSPs’ are moving into the video market, is there any chance TubeMogul might go in the opposite direction and start offering display advertising?

No. We focus exclusively on video, specifically the intersection of programmatic and branding. We believe science-based buying and ad delivery can maximise video’s immense branding power and energy is best expended there. That said, we offer video in many forms, from standard pre-roll to social video ads that appear within Facebook applications and videos that appear as display ads that viewers can choose to watch. Everything we do is to better achieve branding objectives, such as offering free brand surveys on every campaign to measure things like of consumer sentiment, purchase intent, etc. Direct-response is not our speciality; we are not designed to simply deliver traffic to a website. We actually pass up direct response campaigns, foregoing that revenue.

In other words, we think video is its own unique format that deserves to have its own platform and its own set of technologies. Running a brand campaign on TV is hard enough, so for video you need to try and simplify the process. So our focus is more on making sure video ads can run smoothly on mobile, tablets and connected TVs and achieve a brand’s goals. The video market is still maturing and we don’t necessarily know what it will look like two years from now, so our aim is to help brands navigate that future.

Does TubeMogul always buy inventory via exchanges or do you also have direct publisher relationships?  And where are we at in terms of seeing top tier publishers and broadcasters selling video programmatically?

We’re seeing a lot more premium inventory being sold programmatically in some way, whether it’s official music videos on YouTube, or inventory from broadcasters and newspapers. About 99 percent of the time we’re buying via programmatic marketplaces using real-time bidding.

There are a lot of publishers using private exchanges that aren’t open to everyone that we are plugged into. For instance, major broadcasters streaming things like live sports. We find that ads served against this type of content perform extremely well and so we buy a lot of it. It tends to be more expensive but one of the things we’ve learned is that in spite of all of the advances in third party data and targeting, advertisers value having control over where an ad is running, and good content works.

We incorporated that into our user interface, where you can pick the exact site where you’d like an ad to run, and advertisers can then see which sites are performing well and turn off the ones that aren’t.

Why are advertisers attracted to buying programmatically?

The efficiency is obviously a major attraction, so advertisers no longer have to deal with RFPs and sending over faxes. Advertisers are able to run small test buys to see what works before they invest more heavily. It is also great to be able to tweak your campaign as you go along, so you can shut down the inventory that isn’t working for you, or spend more on what is. For example, if a particular creative is working exceptionally well with a particular audience, you can focus your spend on the ad delivering the best results. That level of control over media mix is what delivers ROI for advertisers.

Considering so much of the TV world is based around up front and guaranteed buys, can open RTB buying provide sufficient guarantees on pricing to fund top quality content?

Expect a lot around this in the next year. Private exchanges help give publishers more control, and when done right can offer a bigger upside. You can look at markets like Australia where there’s a shortage of good inventory and prices are skyrocketing.

It is also worth noting that there are instances when guaranteed pricing works against publishers. For example, on Christmas Eve a lot of inventory was sold on a guaranteed basis and publishers sold out. But having all of the advertisers bidding against one another on Christmas Eve was driving CPMs in some places through the roof, up to about the £25.53 mark. We saw a similar thing here in the US in the run up to the presidential election, where the publishers selling their inventory via RTB made so much more money than they would have had they sold it on a guaranteed basis.

What do you think are the most commonly held misconceptions about programmatic buying?

One misconception is that it is all about direct response and display advertising. I think the industry’s fixation with buzzwords sometimes pushes certain technologies into a corner, so people get the idea that, for example, I should use this or that technology to get Facebook fans, this one to get YouTube views, etc. But the only reason programmatic buying is associated with display is that it started with display, but when you look at what brands can get from it, it’s actually ideal for delivering on branding objectives — better than display.

With branding, context matters a lot and real-time buying gives you more control over context than any other form of buying. You can look at an ad in an instant and see how that individual placement is doing with a certain demographic, which gives you extremely granular control. However, ultimately what we are doing is simplifying buying where a campaign can be set up and be running within minutes. The complicated part of the RTB world is all under the hood and helping advertisers meet their goals.

There is also a lot of confusion around what “video” advertising means, from social video to standard in-stream adverts. Really, a viewer seeing a brand ad is just that — advertisers should just know what they are buying and how it is helping them reach their goals. Finally, as discussed earlier, a bit misconception is that programmatic buying is going to hurt publishers, which we covered already.

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