The centrality of data to marketing success is driving brands to take greater control over their marketing and advertising technology and to wrest control back from their agencies.
That’s our take out from a recent meeting with Brett Wilson, the CEO and co-founder of TubeMogul, the video advertising technology platform that has morphed into a more general advertising digital DSP in recent years.
Which-50 recently completed a tour of the TubeMogul campus in Emeryville near San Francisco, where Wilson discussed the requirements of brands, the changing the relationship with agencies and his expectations for programmatic TV.
According to Wilson, “We always thought it was important was to align ourselves very closely with advertisers. We never own media. We never mark it up. We never arbitrage We make the same [money]regardless of what the advertiser buys.”
That reflects one of the core values of business, he said, “One of our goals is to be the most aligned company with advertisers, ever. When it comes to some of the conversations in the industry about transparency, rebates, and misaligned business practices, I like to think we’ve been a positive force.”
Take ad fraud for instance. The industry generally accepts that 11 per cent of inventory on the ad networks in fraudulent (a stunning concession in itself) TubeMogul rebates clients the cost of that fraudulent inventory if the levels in their software rise over three per cent.
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We asked Wilson to discuss the changing relationship between brands and agencies – and platforms like TubeMogul.
“Traditionally, companies that built technology, or provided a service in an advertising space would sell through ad agencies. That was your distribution to get to the advertiser,” he said.
“What’s happened in the last few years is that a lot of advertisers themselves want to take more control.”
He stressed that this did not necessarily mean brands wanted to do everything themselves. “But increasingly, we’re signing deals directly with advertisers. Then we’ll train up their media agency on their behalf. ”
“Advertisers want to own their own their data. If you do a review and you switch agencies, the agency has all the intellectual property. If you own the contract with your tech company and you switch agencies, you bring that with you.”
He also acknowledged a widely held view that agencies aren’t always on the same page as advertisers.
“Some of it stems from back to 2011 (when TubeMogul launched its first products). Our initial clients, were trading desks that would log in to our software, markup the media, and resell it to their own clients.
“You saw these agencies change their business model from agent to principal. But none of us really like our agency selling us things.
“Those trading desks fuelled a lot of the growth for the holding companies. Now fast forward five years later, and the advertisers understand a lot more about what programmatic is and what it isn’t… So there’s this movement to sign deals directly with brands.”
TubeMogul’s preferred model is to sign with a brand, and then train the agency to execute the media buying.
“We all work together doing what we do best. In that model the agency is charging a transparent service fee on top of the tech. The agencies that we work with tend to be operating transparently on behalf of their brands.”
On the box
While TubeMogul started in the television advertising world – since that’s where most of the money is says Wilson – in recent years it has extended its platform to allow its clients to buy other types on online media such as digital display.
However television remain critical to its progress.
“Banner ads, are all around you, and there’s kind of unlimited liquidity,” says Wilson
That’s not the case with television however which is why Wilson believes the market will be more driven by private market places where advertisers load their own deals into the software.
“This is the way that we’ve been working with agencies. We have a deal with IPG globally to power their programmatic TV offering. It feels right because they’re leveraging their buying power. They’re loading in their deals. We’re building the software. And we end up with a product for advertiser that neither of us could build on our own.”
The important point he makes – and one which informs TubeMogul’s diversification in recent years – is that if you want to control reach and frequency for an advertiser you cannot just attack television.
“You hear a lot of talk in our industry about cross device targeting. This is using data to target people across desktop and mobile. I really don’t think that matters much since firstly I don’t think there’s that much overlap, and secondly if you’re an advertiser most of your spend is on television. ”
Instead, says Wilson, TubeMogul wants to lead the shift from cross-device to cross-stream which will involve de-duplicating audiences across the across linear television, streaming TV and digital.
“We’re trying to move upstream into planning. With this planning tool you put in your reach and frequency goals with your target audience and other data. The software puts together a plan for you across linear TV and digital. It is not just an allocation tool that says put 30 per cent here, or 20 per cent there.
“It puts together the best plan across all screens to reach your audience the most efficiently. We want to make this a foundational tool so both the planning and the buying is done through our software.”
We also asked Wilson about the importance of the Australian market which has had an unusual level of influence for TubeMogul.
According to Wilson, Australia has always been a significant market both in terms of advertising spend but also for innovation. “We did the very first programmatic direct buys [in Australia].”
“Probably three or four of our major products were really invented in that market.”