Business model of TubeMogul

Customer Segments

TubeMogul has a segmented market business model, with customer groups that have slightly different needs. The segments are as follows:

• Brands – Companies or product lines of companies that control ad budgets for marketing brands
• Advertisers – Companies that purchase digital and television media on behalf of brands
• Other – Includes agency trading desks, ad networks, and publishers

Value Proposition

TubeMogul offers four primary value propositions: convenience, risk reduction, performance, and brand/status.

The company offers convenience by making operations simpler for customers. Its platform is an end-to-end solution that facilitates comprehensive campaign management (planning, execution, and measurement) through a single platform. Specifically, it enables clients to do the following:

• Receive recommendations on the best budget allocation across video-on-demand, linear TV, connected TV, digital display, digital video, and social channels to maximize reach
• Buy ad impressions dynamically through real-time bidding technology
• Easily integrate ad inventory that they source directly from digital and TV publishers
• Measure the size of the audience reached by their campaigns and their impact on consumers’ brand perceptions, as well as over 50 other brand metrics in real-time

The company reduces risk by maintaining high quality and security standards. As a demand-side platform, it does not own any inventory, and is thus not pressured to choose certain integrations or favor certain inventory in order to help content providers/publishers make money. Furthermore, its platform includes a set of safety technologies that reduce low-quality ad placements (SiteSafe feature), sites with objectionable content (PageSafe), and auto-play ad placements (PlaySafe). Lastly, it maintains the TubeMogul Non-Human Traffic Credit Program, which eliminates fraudulent traffic.

The company has demonstrated strong performance through tangible results. High-profile examples of positive outcomes for clients include the following:

• Sony used TubeMogul’s solution to create a programmatic video campaign, resulting in the reaching of two million viewers in six Asian markets and an increase of 8% in brand preference
• Expedia used TubeMogul’s solution to deploy Facebook and Instagram ads, enabling it reach over 9.4 million unique viewers and secure over 5,500 bookings

The company has established a powerful brand due to its success. It facilitates campaigns in more than 70 countries, and its platform is available in four languages and supports 18 currencies. In 2015 it had 446 clients for its Platform Direct unit (serves brands, agencies, agency trading desks, ad networks and publishers) and 271 clients for its Platform Services unit (serves media agencies working on behalf of brand advertisers).  Its customers include many top advertisers, including 94 members of the 2014 Advertising Age Top 100 U.S. Brands list. Lastly, it has won many honors, including the following:

• Digiday Video Award for Best Video Advertising Partner (2016)
• Recognition as one of Fortune‘s “Top 100 Places to Work for Millennials“ (2016)
• Winner of the Drum Digital Trading Award for Most Effective Programmatic Media Partnership (2016)
• Winner of the iMedia ASPY Awards for Best Video Partner (2016)
• Winner of one of Glassdoor‘s “Best Places to Work” People’s Choice Awards (2015)

Channels

TubeMogul’s main channel is its direct sales team. It promotes its offering through its website, social media pages, digital advertising, direct e-mail, webinars, thought leadership pieces, and participation in industry conferences. The company also hosts TubeMogul University, a set of three annual conferences for customers in North America, Europe, and the Asia-Pacific.

Customer Relationships

TubeMogul’s customer relationship features a self-service element. Its website provides resources in the form of an “Insights” section with articles, research reports, case studies, and webinars. Also, its Platform Direct Unit largely enables clients to run their campaigns through a self-serve model.

That said, TubeMogul’s customer relationship is primarily of a dedicated personal assistance nature. The company provides its Platform Direct Unit clients with the following forms of support:

• Support Services – TubeMogul offers a dedicated support team that assists customers with campaign setup and execution, educates them on the platform’s benefits, and provides training.
• Training Services – TubeMogul offers a dedicated training team that designs and develops a training curriculum and runs a certification program to verify clients‘ skill level in using the platform.

The company’s Platform Services Unit enables advertisers to specify their campaign objectives, after which an assigned team executes the campaign on their behalf using the platform.

For all customers, the company offers the aforementioned TubeMogul Academy, a three-day training conference that provides a combination of education and hands-on activity.

Key Activities

TubeMogul’s business model entails maintaining a robust cloud-based platform for its clients.

Key Partners

TubeMogul’s key partners are the more than 30 third-party technology providers that offer specific technologies for its linear television and digital campaigns. Specific partners include prominent social media platforms such as Facebook, Twitter, Instagram, and Snapchat.

Key Resources

TubeMogul’s main resource is its proprietary software platform, which serves over 700 clients.

It depends on human resources in the form of technology employees to maintain and update the platform, sales employees to promote it, training employees to provide instruction, and customer service staff members to provide support.

As a startup it has relied heavily on funding from outside parties, raising $136.1 million in eight rounds as of June 2015.

Cost Structure

TubeMogul has a value-driven structure, aiming to provide a premium proposition through significant personal assistance and frequent product enhancements.

Its biggest cost driver is cost of revenues, a variable expense primarily composed of media costs. Other major drivers are in the areas of sales/marketing, research and development, and administration, all fixed costs.

Revenue Streams

TubeMogul has one revenue stream: revenues generated from transaction fees charged for its services. The fees vary by unit:

• Platinum Direct – Customers are charged fees based on a percentage of their media spend through its platform as well as fees for additional services delivered simultaneously, such as audience targeting data, ad serving, brand safety, topic targeting and other reporting related services.
• Platinum Services – Customers are charged fees based on a cost-per-thousand impressions for digital video advertisements, or based upon specific campaign specifications such as number of engagements, completed views, or on-target impressions.