Still No Programmatic Revenue For YuMe

YumeQ4Nearly a year since video ad platform YuMe plunged into programmatic by launching the Video Reach buying platform, it still has no revenue attributable to the practice.

YuMe, which had invested 5% of total revenue into programmatic, expects it to contribute to top-line growth “within the second half of the year,” CEO Jayant Kadambi said during the company’s Q4 earnings call Wednesday.

“We’ve been very bullish for a long time about the fact that a market will buy substantively from multiple distribution channels,” Kadambi said. “We believe brand marketers will buy video both direct and automated, but [for us] buying from an automated standpoint is still very small from a customer standpoint.”

YuMe’s Q4 revenue was $57.5 million, a 6% increase year over year. Total revenue for 2014 was $178.1 million, up 18% from 2013. Thirty percent of YuMe’s ad revenue can be attributed to mobile and cross-screen campaigns.

While YuMe saw growth in its advertiser client base – a 52% increase in total number of customers, from 580 to 880, in 2014 – average revenue per customer declined by about 20%, indicating weak growth in spend.

Additionally, while smaller customers are growing, some large advertisers weren’t consistent with their investments.

Investors also questioned the impact of Facebook’s LiveRail acquisition and alleged efforts on Google’s part to “push customers to purchase video through [its exchange] AdX.”

Kadambi said YuMe was focused on reaching brands’ digital audiences as a complement to their TV ad buys.

“You need an integrated performance metric and to prove ROI, and to that end we’ve started testing an integration with spot television purchases in linear TV and complement those with digital purchases,” Kadambi said. YuMe also creates a number of interactive ad formats on behalf of brands, such as YuMe’s high-impact Ngage unit, compatible with connected TV devices and mobile devices.

YuMe’s integration focus this year was automated buying platforms for spot TV as well as agency trading desks. YuMe will introduce in the coming year a private marketplace offering for demand partners to access its supply and will complement that with a similar publisher offering, which “will give us a full slate of programmatic offerings,” he explained.

Analysts questioned how streaming video subscription services like Dish’s new video-on-demand service, Sling TV, and the trend toward television unbundling would impact YuMe.

“Our platform supports media from every channel and to us, they’re just aggregations of inventory,” Kadambi said. “The amount of [inventory] available in those environments, I would say, is quite low right now.”

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