Software the answer to ad industry woes: TubeMogul CEO

UNITED STATES – To hear TubeMogul CEO and co-founder Brett Wilson talk about the future and role of his company is to be reminded of Microsoft’s predominant position in corporations during the 1990s with its Windows and Office products.

“We want TubeMogul to be the operating system for advertising,” Wilson said during a press briefing hosted at the company’s headquarters in Emeryville, California. “In a world where advertisers can see everything that is going on, this will enable media agencies to highlight their good work and get more credit for it.”

Wilson is also adamant that software is the answer to the transparency issue currently plaguing the advertising industry, brought to the forefront in the US by an Association of National Advertisers report released earlier this year.

“Software is the answer to the transparency issue in way that works out for everyone,” said Wilson. “There’s less translating needed as everyone is working off the same dataset.”

The ANA report highlighted non-transparent business practices across media in digital, print, out-of-home and TV. It also raised the issue of media rebates practiced by many agencies and urged ANA members to "re-examine all existing media-agency contracts and meticulously review all terms and conditions".

“Walk into any media agency lobby and you’ll see a ton of media sales people, and they all know each other because that’s how media has always been bought and sold,” said Wilson, adding that it is also why his company is steadfast in its vow to never own any media.

“As a company, we believe that we can scale a lot more as a software business versus an insertion-order business where every deal is like going into a knife fight,” he added.

It also plays into one of the company’s current messages to the market, that programmatic is not a media channel but a technology platform that can enable efficient and effective buys across multiple media channels.

TubeMogul recorded US$414 million in gross adspend flowing through its system in 2015 and is projecting US$560 million in 2016.

“The business models have caught up with the technology now,” said Wilson. “We’re in a better state as an industry than we’ve been in a while.”

The company recently officially launched in China, after obtaining its ICP (Internet Content Provider permit) to operate in China, having grown its salesforce in Shanghai to six people and its R&D office in Chengdu to 50 engineers.

Susan Salop, VP for Asia, shared that Chinese companies are getting increasingly involved in the adtech space, pointing to the movements taking place with the acquisitions.

For example this year alone, Beijing-based Spearhead Integrated Marketing Communication Group acquired US mobile ad exchange Smaato for US$148 million, and Chinese mobilem ad platform Mobvista purchased app monetization firm NativeX for around US$25 million.

Salop said TubeMogul is bullish on its prospects in China, the world’s second largest video market, where video accounts for 31 percent of adspend, higher than then global spend of 15 percent.

TubeMogul expects the market to be a significant driver of growth in the coming months, with it’s self-positioning as a transparent, independent and conflict-of-interest-free platform in the market.

The company is also enjoying robust growth in Australia, recently welcoming 15 major brands as new clients in the last quarter alone.

Most recently the company was selected as the preferred programmatic platform partner for brand advertising in Australia by multinational distilled beverage manufacturer, Pernod Ricard. Pernod will use TubeMogul’s automated software platform to plan, buy, measure and optimise their Australian brand advertising.  

Wilson added that in recent months, the demand-side platform company is seeing an uptick in the number of deals being signed directly with brands.

“Advertisers want to take control," he said. "There are concerns agencies aren’t always on same page as their clients. So we’re increasingly signing direct deals with brands and then what we do is train their media agency on how to use the platform. A big driver is that marketers want to own their data, especially with all these media reviews taking place, and not have it be a property of the agency the account currently sits under.”

Software will also enable true control of reach and frequency, Wilson added, where advertisers can buy across all screens from a single platform.

“The fact remains that TV remains a big chunk of a brand’s adspend budget," he said. "A lot of campaigns are anchored around it. But in today’s fragmented media landscape, if you want to control reach and frequency, you can’t just attack TV.”

Asked about where TubeMogul will fit in, in the emerging scenario of adtech and martech stacks converging, Wilson believes we are many years away from it being a fully realized reality.

“Martech is focused on CRM, content and email marketing and the CMO is going to be most concerned about his or her adspend where millions of dollars are in play,” he added. “The two stacks will connect over time, what we’re seeing is brands using our APIs a lot more to plug into their business intelligence systems. But it’s also one of those things that sound good like a car that can fly.” 

Full disclosure: TubeMogul and Salesforce have paid the reporter's way to attend TubeMogul's event and the Salesforce Dreamforce conference this week in San Francisco.