Competing with Google, Facebook is easy for this mobile ad-tech pioneer
Founded in 2011, StartApp now has 100,000 apps, which reach 350 million global users monthly, carrying its software.
Published: October 15, 2015 - 9:30 amTheir idea was so simple that they knew it was going to be big, but Gil Dudkiewicz and Ran Avidan had no idea it was going to be that big.
Dudkiewicz had run a startup that developed emoticons; Avidan worked on mobile data. Both knew that banner ads were ineffective on cellphones and that developers needed a way to make money from advertising on the free apps they were creating.
So the two Israeli veteran entrepreneurs and a small team started building a software kit that would let app developers put an ad from a mobile-game maker inside their apps. Every time someone clicked on the ad and downloaded the game, the app publishers would get paid.
When it was finally ready for a test run, the StartApp founders thought they'd get 10,000 downloads. They were wrong.
"Within a month and a half we had reached half a million users," said Itay Rokni, chief revenue officer and StartApp's second employee. "That was the point where we understood: This is bigger than us. I could say it was a great product, but it was filling a huge need in the marketplace."
That was in March 2011, three months after StartApp was founded in Tel Aviv. By July 2012, StartApp had gone global. The company moved its sales and marketing headquarters to New York (the engineers remained in Israel) as it continued to tap into a budding market: App makers needed revenue, and mobile gaming,
e-commerce and entertainment companies were looking to acquire new users through their ads.
In addition to automating the ad-insertion process, StartApp also analyzes the behavior of the people who click on the ads. Are they the kind of game players who will end up spending money? If so, advertisers pay more for their clicks.
StartApp now has 100,000 apps carrying its software; those apps reach 350 million users monthly around the world. The U.S., China and the U.K. make up the three biggest markets. Advertisers include Electronic Arts, Social Gaming Network and a long list of smaller app publishers.
And StartApp is still moving quickly, launching a new ad framework every six to eight weeks—such as its "360" ad unit, which makes use of the gyroscope inside a phone to provide full-circle visuals. The company also continues to refine the algorithms that determine the best audience for each ad.
"Growth has accelerated," Rokni said. "We are competing directly with Google, Facebook, Millennial Media—companies with much bigger pockets [than ours]. To be in that race we have to differentiate ourselves all the time."
StartApp is No. 1 on Crain's 2015 fastest-growing companies in New York list.