Facebook has turned mobile app install advertising into a massive new business. Now, Chartboost is looking for life after the app install.
Chartboost
Facebook wasn't the first company to run advertisements for installing mobile apps, but it has emerged as the dominant player in that space, expected to generate more than $1 billion in mobile advertising revenue this year, according to a number of estimates.
Now some of the startups that initially beat Facebook to the mobile app install space — but which couldn't match the giant's scale — are looking beyond app install in a bid to crack the next billion-dollar mobile advertising business.
One of the most prominent is the San Francisco-based Chartboost, which has raised $21 million in venture funding and has more than 60,000 mobile games plugged into its service. Like Facebook, Chartboost helps developers find new players by placing advertisements in other games that link directly to either the Apple App Store or Google Play app store, and charging for each time a new user installs the app.
However, that's just the start of Chartboost's services, which are geared exclusively toward game developers. The startup says it wants to ensure it knows exactly where game developers are getting the highest-value users (as in, the users that are buying the most things in their games). Chartboost is also one of the only startups to support what is referred to in the industry as a "direct deal marketplace" — which is, essentially cutting the company out so two game developers can make a deal with each other on selling in-game advertisements for app installs.
"As a developer, I see what games I'm promoting and I get to see where my game is promoted," Chartboost CEO Maria Alegre told BuzzFeed. "I can see how it's performing in each game, and can I go direct if I want to. When they go direct they cut us out, but we're OK with that because we built the technology we want developers to leverage in different ways."
From left to right: Chartboost Chief Revenue Officer Clay Kellogg, Chief Technology Officer Sean Fannan, CEO Maria Alegre, and Chief Product Officer Chung-Man Tam.
Chartboost
Normally, a technology company wouldn't be so nonchalant about being cut out of business between two customers, but Alegre says the key is how games tend to develop over time — and that developers will inevitably return to Chartboost for advertising campaigns. For example, when an app is very successful on the App Store rankings, it might make several direct deals — which are actually facilitated by Chartboost's service that includes several communication and networking tools — while it is popular. Then, when the game becomes less popular, it will shift its focus over to new games and serve advertisements in order to continue generating money from those games.
And the tantalizing possibility for automatically facilitating those direct deals — which is essentially the same as "friending" another developer and negotiating a deal with them — might come to be as simple as pressing a button that Chartboost runs along with the rest of its advertising and monetization services.
"You have an independent neutral party, a Switzerland, that both parties trust you can get to a part where both parties say, 'I'm benefiting from having this relationship,'" chief revenue officer Clay Kellogg told BuzzFeed. "We see that as the next generation of our direct-deal marketplace. Today we play this role, people come to us and say, 'Hey we want to do these direct deals,' and they turn to their account manager at Chartboost and they do the analysis. We play that liaison or that matchmaker. The next wave of that is to have that automated to a point where I just click a button."
Chartboost is even looking beyond that toward a sort of sharing model that is increasingly common in Asia, Kellogg said — revenue-splitting. In such an example, users would be "shared" between two apps in exchange for a cut of the app's revenue, such as whenever a newly acquired user makes a purchase within a game.
Neither of these kinds of automated partnership products exist yet, but the company says the basic foundation is there. Facilitating those kinds of deals requires a level of trust with a company like Chartboost in order to, essentially, make sure one developer is not screwing another over in the process of sharing users. But thanks to its level of transparency — something that isn't offered by larger advertising providers — Chartboost has accrued that, Kellogg said.
"That transparency and that control is why game developers come back and use us consistently for sustainment campaigns, and use other avenues for the peaks they're trying to achieve," he said. "Whether that's using AdMob, Facebook, Twitter, or any of the other players."
The company also launched a number of new products today, including giving developers the ability to create "segments" based on how users play their games. For example, a Charboost publisher could determine which players are logged into their games the longest, or which users open the game the most often, and then plan their advertising campaigns around those specific buckets of users. Publishers using Chartboost will also be able to craft specific updates for those player bases — such as notifying specific ones of a sale or showing a new level — thanks to the addition of a "news feed" function that the company is also launching tomorrow.
Both targeting and analytics products, like many that Chartboost has built, were in demand from the company's publishers and developers.
"These segments are going to be usable throughout Chartboost products, you'll see it start to take shape with the two products we're announcing tomorrow," Chartboost Chief Product Officer Chung-Man Tam said. "It's important for us that our developers are coming back to us after trying these other products. We're trying to really listen to what they're looking for, and being very close to that development community."
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