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Shortly after Facebook’s IPO, the market freaked out about the social network's ability to generate revenue on mobile devices. The lack of space on mobile, it seemed, was a major obstacle to Facebook’s ability to run classic banner ads.
Facebook’s solution to the mobile advertising crisis was to go native - to place advertisements right within the content well. The effect was to deliver advertising that was more engaging and profitable than banner ads. So much so that 62 percent of Facebook’s advertising revenue now comes from mobile devices.
But Facebook is not the only place where mobile native advertising works. Kixer, a mobile native app advertising network, is building with the belief that there is a vast un-monetized world of mobile content, just waiting for native advertising. The company, which just received $1 million in seed funding, is the brainchild of a team of ad tech and mobile gaming veterans.
“What we started to see in 2010 is that we were really good at making money on desktop but our users were switching to mobile and the mobile returns weren’t very good,” said CEO Keith Bonnici.
Particularly, Kixer was looking at how to monetize mobile app game downloads (a niche that some estimate makes up 20 to 25 percent of Facebook’s mobile revenue.)
“Kixer allows publishers to tap into the growing users acquisition budgets that these game developers and app developers have,” said Bonnici.
This is especially enticing to publishers because “building something native is building a new supply on the page and allowed us to find a new place in the market that isn’t taking away from other sources of revenue,” said Bonnici. That is, these mobile native advertisements don’t displace other advertising revenue.
Today the company places native advertisements on over 90 publisher websites and growing. Most of these sites represent entertainment brands like TMZ, IGN, EOnline and US Magazine, but Bonnici said they have some surprising download results from finance and news sites as well.
“Everybody likes games,” said Bonnici. “We put all the games into rotation and the system tells us people on IGM like Candy Crush or they don’t. We get surprised pretty often by what demos perform. If you let technology bring you the data, without humans putting in theories that aren’t validated, data wins.”
Advertising is charged on a per download basis, so app developers only pay when they acquire new users. The technology also allows publishers to stylize the advertisements to match their mobile webpages.
Bonnici expects the ad placements to create even greater returns in the future as the company’s algorithms optimize on a growing warehouse of data.
With their new seed funding, Kixer is looking to grow its eight-person team to over 12 by the end of the year and will also be investing more in technology, something that Bonnici believes is key to the company’s success.
“We truly are a tech company," said Bonnici.”We have zero ad sales people. All our revenue has been generated by inbound inquires.”
