Feature

Greystripe: Price deflation is driving the uptake of in-app advertising

Monthly revenues of $10k per app claimed

Greystripe: Price deflation is driving the uptake of in-app advertising
The mobile advertising market is in a high growth, high volatility position at the moment.

There are plenty of companies offering developers and publishers a variety of options when it comes to releasing free, ad-funded games.

Equally, there's a lot of potential merger and acquisition activity too, as proved most recently when mobile ad company AdMob purchased iPhone specialist AdWhirl.

We caught up with Michael Chang, CEO of mobile advertising network Greystripe, which has recently completed a funding round of $7.5 million, to get his take on the changes.

Pocket Gamer: How is the ad-funded model working out on iPhone?

Michael Chang: The iPhone is the killer mobile device for many reasons. It's a true media device. On average, consumption of iPhone ads versus Java devices in our network is around 12 times. This means that there's much more available inventory and therefore ad revenue is higher.

Also, publishers continue to innovate and push the envelope, for example location-based apps like Buzzd and social games such as Words with Friends by Newtoys.

How is your strategy to link mobile and web advertising playing out?

Awesome! For instance, we power Tribal Fusion's Mobile solution. It is an incredible partner. In addition, this has helped us to bring more brand dollars in from advertisers such as Kia and Paramount because our Flash ads are exactly the same as what they are buying online.

This means they can use the same creative for online and in mobile, which streamlines the process and gives advertisers a real sense of comfort that they know what the end user experience is going to be.

What's the reaction from the media brands been, especially as many of them are releasing free apps to advertise their brands - i.e. Barclays, VW, Reebok etc?

You called it right. Brands are jumping in, both in terms of creating their own content, as well as buying media to drive broader brand awareness. Brands are very savvy now and know that developing their own app has limited reach but is an important point of presence in mobile.

They also know that media - as in a buy on the Greystripe network - can give them much wider reach and interactivity. We've seen great success with the combo. For example Axe simultaneously released its branded app Pogo Xtreme through us, alongside a large media campaign. The media campaign is able to drive both awareness of the app and the brand.

What have been the repercussions of AdMob buying AdWhirl, of which you were very critical at the time?

We still feel strongly that ad mediation cannot live at an individual ad network since there is a real conflict of interest with the developers' goal of maximising revenue.

We are working with Tapjoy and will be announcing other partnerships before the end of the year.

What implication do you think Apple's decision to enable free apps to include in-app purchases have for in-app advertising?

This is a huge deal for advertising because it means that more full versions of games will be free. Virtual goods are very complementary with advertising as developers think about all forms of monetisation.

Do you think developers are becoming more open to in-app advertising?

Absolutely. Price compression on the App Store has helped make the case for ad support.

I also think that good, old fashion market education has helped considerably, such as the case studies that we've been releasing, and the openness of developers to share information with each other. Developers continue to need data that shows they can make money from the ad supported model, and we're happy to provide that insight.

Your most recent case study for the game Cookie Bonus Solitaire reveals a global eCPM of $2.45 and monthly revenue of around $10k. How common would you suggest these figures are?

Almost all of our publishers are making a similar global eCPM at 100% fill, because our system does a lot of ad optimisation.

What do you think is the next big thing for mobile advertising?

We're going to be announcing a number of new products in Q1 that are going to blow your socks off. Stay tuned!

Thanks to Michael for his time.

You can keep in touch with Greystripe's activity via its website or Twitter.

Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.