TubeMogul Offers Facebook And Instagram Video Ad Inventory

| About: TubeMogul (TUBE)

Summary

Video ad-buying platform TubeMogul is one of the leading players in the country, helping advertisers make better informed decisions about their ad-buying choices.

The platform also offers analytics capabilities to help brands evaluate the effectiveness of advertising.

TubeMogul had a big win when Facebook announced it as a marketing partner.

According to a recent eMarketer report, for the first time ever, digital display ad spending in the US will surpass search ad spending. Display advertising, which includes video, sponsorships, rich media and "banners and other," will be worth $32.17 billion this year compared with the search advertising market of $29.24 billion. Total digital advertising industry is expected to be worth $67.09 billion in 2016 compared with $58.12 billion in 2015. Digital spending is estimated to grow to $93.7 billion by the year 2019.

Within display advertising, banners and other forms of advertising are the biggest market at $13.39 billion followed by video advertising at $9.59 billion. Video advertising in the US is estimated to grow to $14.77 billion by the year 2019.

TubeMogul's Financials

Video ad-buying platform TubeMogul (NASDAQ:TUBE) is one of the leading players in the country, helping advertisers make better informed decisions about their ad-buying choices. TubeMogul offers an ad inventory aggregating service that simplifies the process of purchasing ad space for digital video advertising. It offers a self-serve platform that integrates various technologies and sources of inventory to allow advertisers to deliver sophisticated, scalable digital video advertising campaigns. Additionally, the platform also offers analytics capabilities to help brands evaluate the effectiveness of advertising.

Earlier last quarter, TubeMogul announced its fourth-quarter results. Revenues for the quarter grew 62% over the year to $58.5 million compared with the market's forecast of $52.1 million. Loss per share of $0.04 was significantly better than the market's forecast of $0.15 per share.

By segment, Platform Direct revenues came in at $22.2 million, growing 36% over the year, and Platform Services revenues grew 83% to $36.3 million.

The company ended the year with revenues growing 58% over the year to $180.7 million. Losses for the year grew to $13.7 million, or 42 cents per share, compared with a net loss of $4.4 million a year ago. The increase in losses is attributed to a 55% increase in R&D and a 45% increase in sales and marketing expenses.

For the current quarter, TubeMogul projected revenues of $40-42 million with an adjusted EBITDA of a loss of $5-3 million. It expects to end the year with revenues of $220-228 million with an adjusted EBITDA of $5 million.

Prior to listing in July 2014, TubeMogul was venture funded with $53.2 million raised from Trinity Ventures, Foundation Capital, Cross Creek Advisors, SingTel Innov8, Northgate Capital, Knight's Bridge Capital Partners, Bee Partners, and the NSV.

TubeMogul's Improving Network

TubeMogul is working on fighting ad fraud. According to White Ops, an ad fraud detection service provider, global online ad fraud is estimated to be worth $7.2 billion. Earlier last quarter, TubeMogul announced that it would issue automatic refunds to any advertiser whose ads were served to bots or non-human traffic. It is working in the refund program through its partnership with White Ops.

Recently, TubeMogul had a big win when Facebook (NASDAQ:FB) announced it as a marketing partner. The move will mean that TubeMogul's clientele will be able to utilize Facebook as an advertising platform and purchase video ads within the Facebook News Feed and Instagram on mobile and desktop besides all other brand advertising buys across digital video, programmatic TV and digital display. In fact, TubeMogul is now the only video specialist, demand-side platform within the Facebook Marketing Partners program.

The market is pleased with TubeMogul's new revered status. Its stock has gone back to its IPO levels and is trading at $13.64 with a market capitalization of $485.03 million. In July 2014, the company had raised $93 million by selling 7.2 million shares at $13 each. The stock touched a high of $17.77 in June of last year and had fallen to $9.11 in August last year.