RBC Capital Reiterates Bullish Stance on TubeMogul (TUBE) Following 'State Of Programmatic TV' Webinar
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RBC Capital analyst Rohit Kulkarni reiterated an Outperform rating and $21 price target on TubeMogul, Inc (NASDAQ: TUBE) after Chief Strategy Officer Jason Lopatecki recently hosted a webinar on the "State Of Programmatic TV."
Kulkarni notes programmatic TV is still in its early stages. "While Upfront, Scatter, and Spot sales are likely to remain the primary ways to buy TV advertising for several years to come, we think automation could be applied incrementally to TV ad planning, execution, and analysis," the analyst commented. "According to TUBE’s Mr. Lopatecki, the primary use case for Programmatic TV as it stands today revolves around two basic value propositions: efficient audience targeting and improving overall operational efficiencies."
The analyst sees a large and rapidly-growing market opportunity. "We think a large proportion of early adopter agencies and advertisers used 2014 to “test & learn” about Programmatic TV offerings," the analyst said. "This implies that we might witness a slow but steady growth in PTV-driven ad campaign activations as 2015 progresses (eg. TUBE’s Superbowl ad with Mondelez)"
He added, "Our conversations with industry participants indicate that roughly 1-2% of upfront allocations during 2015-16 season could be managed via Programmatic TV deals. This seems to be inline with the prediction of Dan Ackerman (AOL/Adap.TV) that “TV ads could be 10% Programmatic by 2017”, implying a roughly $6-8B incremental annual opportunity."
The analyst noted that during the webinar, Mr. Lopatecki walked thru a presentation highlighting TUBE’s PTV strategy, essentially to provide brand advertisers with consolidated access to digital and TV inventory.
Lastly, the analyst noted they have recently come across a series of industry reports highlighting trends in the Programmatic TV landscape & the increasingly “enterprise software” based approach toward Brand advertising. They highlighted the following: 1) Google’s “Evolution of TV” whitepaper; 2) SpotXchange’s Programmatic TV Guide; 3) Foundation Capital’s “MarTech and the Decade of the CMO” (we’d note that Ashu Garg who is the author of this report, is on TUBE’s Board); & 4) Dan Ackerman’s (AOL/Adap.TV) interview with Programmatic TV predictions.
Shares of TubeMogul, Inc closed at $15.99 yesterday.
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