TubeMogul Gets $20 Million Investment to Expand Reach in Online Video Advertising

Real-Time Auctions Come to Online Video

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TubeMogul, a six-year-old company that helps advertisers buy video ad space through real-time auctions, has raised a $20 million Series C round of funding. The investment was led by Northgate Capital, and also included current investors Trinity Ventures and Foundation Capital. TubeMogul has now raised a total of $35 million.

The company will use the funds to aggressively hire in engineering, sales and marketing and to expand into more international markets, according to CEO Brett Wilson.

Brett Wilson
Brett Wilson

The company started as an analytics provider for online video, but in the last two years has built out software that gives advertisers the ability to buy video ad space through real-time auctions from a variety of different ad exchanges and publishers for a single campaign. In this way, TubeMogul is essentially a demand-side platform that focuses exclusively on digital video.

That said, CEO Brett Wilson said his company has made a concerted effort to integrate features into its platform that should make big-brand advertisers more comfortable with buying ad space from exchanges through automated means. One is a brand-safety tool that scans each page before placing an ad, and another is a survey product that gives advertisers feedback from viewers while the ad campaign is still live. TubeMogul counts several of the big agency trading desks among its clients.

"We feel there's a market void at the intersection of programmatic and brand advertising that we can own," he said.

TubeMogul buys ad space for advertisers from open exchanges such as, SpotXchange, BrightRoll Exchange, and Google's AdX, as well as from publishers' private exchanges. In doing so, it goes up against traditional demand-side platforms that are trying to add video buying to a foundation built on buying display ad space. On the network side of the business, TubeMogul has competition in Tremor Video and Specific Media, among others.

Digital-video advertising increased 18% to a little more than $1 billion in the first half of 2012, according to an IAB study, but digital video bought through real-time bidding accounts for just a fraction of that . Yet the fact that the market is still maturing is exactly the reason TubeMogul believes it is a good time to take on a big round of funding and attempt to accelerate growth, Mr. Wilson said.

EMarketer expects the online video advertising market to reach $2.93 billion in 2012, and grow to $4.14 billion in 2013.

Mr. Wilson said TubeMogul tripled revenue in 2012, to more than $50 million. About half of its revenue comes from the ad-buying technology business, while the other half comes from a video ad network business.

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