The hot new thing in the world of advertising is getting ads on mobile phone apps. But we’re not talking banner ads or animated spots. The ads will be integrated into the program.
For example, if a smartphone user opens a personal task app and creates a task called “make dinner,” different recipes will be shown. But the content will be sponsored by advertisers, who will suggest their products be used through subtle promotions known as native ads.
Airpush Inc., a mobile ad network in West Los Angeles, is breaking into native ads for mobile apps through its recent acquisition of Hubbl, a New York company that specializes in that area.
“What we’re trying to do in broad terms is create a native ad solution for mobile app developers that works universally for all app developers,” said Asher Delug, founder and chief executive of Airpush. “It’s essentially a framework for them to … deliver ads that are woven into the functionality and content of their app rather than just slapped on like a banner ad.”
The product is still in the development stage, but Delug said it will allow app developers to sell ad space for sponsored content for any type of app from games to weather. Airpush will serve as a network ad broker, placing ads on the apps.
Delug said the appeal of native advertising is that it gets in front of a consumer because it offers personalized content. Airpush wants to make it easier for app developers to capitalize on this approach.
Tony Vlismas, senior director of marketing and sales development for ad platform Polar in Toronto, said Airpush’s timing is good because native ads are taking off with its customers such as publishers Conde Nast Publications and Time Inc.
“Publishers are seeing the biggest benefit through native because it’s a new stream of revenue,” said Vlismas. “But we’re also seeing a benefit to marketers because they have another outlet to share their content.”
Getting started
Delug got his start in mobile advertising in 2006 when he co-founded GoLive Mobile, a mobile marketing company in Menlo Park.
As smartphones grew in popularity, he decided to start Airpush in 2010 with $400,000 of his own capital and three employees. The company has an address on Olympic Boulevard but no real office for now. Delug manages the company from his home in Malibu. He signed a lease two weeks ago for an office space in Culver City.
Staff size is now 200 with 25 employees based in Los Angeles and the rest spread among London, Mexico City, Sao Paulo and an office in Bangalore, India.
Delug expects revenue to reach $100 million this year. Last year’s revenue was $50 million.
The company sold advertising for placement on more than 126,000 apps on the devices of more than 280 million people. It also works with 49,000 advertisers, but Cameron Peebles, vice president of marketing for Airpush, said not every advertiser is actively running a mobile campaign.
The ad network is self-service and works this way: An advertiser creates an Airpush account online, decides to spend $10,000 for mobile ads and chooses which apps to place them on. Airpush takes a percentage of the ad buy and gives a portion of the revenue to the app developer and automatically places advertising on the apps.
Delug said the same framework will be applied to its new native ad platform.
Mollie Spilman, executive vice president of global sales and operations for mobile ad network and Airpush competitor Millennial Media in Baltimore, said she expects Airpush will face challenges scaling its product for native ads.
“While native ads will likely experience tremendous growth in the next six to 12 months, scalability remains a challenge – not all apps and mobile sites support native advertising,” she said.
Also, native ads don’t offer the same level of detail that consumer information advertisers are used to getting on the Web, according to Rob Kramer, general manager of mobile for ad exchange OpenX in Pasadena.
“(Advertisers can) track users as they move from site to site or track their behavior,” Kramer said. “For mobile, it’s a little more challenging. … We have some limited data that we’re actually able to get from the (mobile) device itself.”
Delug said that the Hubbl acquisition will help respond to those challenges. Hubbl’s data targeting tools will not only help Airpush’s new platform scale up but also offer advertisers consumer data. Hubbl’s co-founders, Archana Patchirajan and Kushal Choksi, will stay with the company in New York.
“They had this technology where if they know what apps are on your phone, they can recommend you new apps that you’ll love,” he said. “We saw the potential of that technology with our (platform and) for the first time, we’re going to be launching targeting tools for advertisers.”
