Vungle help app developers monetise their apps with video advertising and act as part creative agency (with a 24 hour turnaround on creatives), part ad network. The Silicon Valley based startup – started by two young British ex-pats – has raised $2 million from a variety of high profile investors, including Google Ventures and AOL Ventures. VAN spoke with one of Vungle’s co-founders, Jack Smith, about the company’s business model, their spectacular launch and the differences between the European tech scene and Silicon Valley.
Congratulations on your funding. You’ve used $1 million of your funding to guarantee payments to publishers. Could you tell me about the fund?
Thanks a lot. We’re really pleased to bring on amazing investors for their advice, beyond just their money. We wanted to make a big splash to acquire publishers following the strong demand from advertisers. Video trailers within mobile apps is an entirely new concept, so a key thing for us is to raise awareness of developers used to monetising through banner advertisements or just images. We’re looking to get their attention with the fund, then take time to explain to them in more depth, the long-term benefits that exist for them.
What type of advertisers are typically advertising on mobile apps?
A lot of mobile apps have a strong desire to advertise their app and a video trailer presents (hopefully) the most effective way for them to do that. Apps that understand the LTV (Life Time Value) of each of their users are those that are most applicable to advertising as they understand how much they can spend to acquire a user – typically, this is often for games.
Aren’t you limiting yourselves by focusing only on app developers as advertisers? Don’t other advertisers want to advertise on apps?
Indeed, we feel that there is a big opportunity beyond advertising just app developers, but at present, we have a strong enough demand from apps alone to focus just on this niche for the time being. We feel that our ability to get video trailers made for mobile apps makes us appealing to a large majority of the hundreds of thousands of mobile apps that are available.
While the 15 second spot is gaining traction, many video creatives are repurposed 30 second TV ads. Has this been an issue for you or are advertisers happy to have new creatives produced?
At present, we’re only promoting mobile apps and are able to help advertisers get creatives made, which are designed to be viewed on mobile first. Designing a video with this smaller screen real-estate in mind has dramatic results. We have sometimes had advertisers who are adamant that they want to run a re-purposed ad-creative that has been shortened to be 15 seconds, but we encourage them to test against a creative designed for mobile-first and they are often exceptionally surprised at the results (though we are not!).
You’ve had a lot of support from Mashable with their ‘Behind the Launch’ web series. How has having such a high profile helped with going to market?
Mashable was great, being on the homepage of such a high profile site every day for over 2 months was something that I couldn’t have imagined 12 months ago. It was a crazy experience, in that people have recognised us in the street now and you meet people for the first time, with them already knowing stuff about you. I’d definitely do it again, the high profile that it brought us just caused crazy excitement and the inbound leads etc were something that money couldn’t have bought.
A classic problem for ad networks starting out is the chicken and egg scenario, where you either have too many publishers or have too many advertisers. How have you approached that problem?
That’s a very good point and something that many ad-networks experience. Luckily we have surrounded ourselves with amazing investors, many of whom have huge amounts of experience in the mobile ad space. Having invested in, founded, or worked as part of mobile ad-networks in the past, they’ve been able to give us amazing insights having been through it all before.
For us, we’ve found it easier to get advertisers (due to the compelling nature of the ad unit), than publishers, as because it’s a new ad-format, we need to invest time in explaining to publishers how it works. As more developers are coming round to the idea, traction is really starting to pick up on this front as well.
As an entrepreneur who moved from London to Silicon Valley, what do you think the European startup scene could learn from the Valley?
I think that myself and my business partner benefited from having previously done business in Europe (London in particular), as it was a great grounding for us coming into the Valley, where there are a lot of resources – from funding to talent – at your disposal. I think that Europe is starting to produce a number of interesting startups and I think that the most important change (which can only come in time), will be to establish startups as a “cool” place to work.
Unfortunately it’s engrained from university downwards to aspire to work for consulting companies or large corporations. Hopefully with future success stories of startups in the UK, people will soon aspire to work at startups instead. That’s a key difference – in the Valley, everyone wants to work for the next Facebook.
A lot of mobile apps have a strong desire to advertise their app and a video trailer presents (hopefully) the most effective way for them to do that. Apps that understand the LTV (Life Time Value) of each of their users are those that are most applicable to advertising as they understand how much they can spend to acquire a user; typically this is often games.