They Might Be Giants

From Google to startups like Square, a look at seven would-be mobile titans


Lars Albright
Founder and CEO
SessionM

Lars Albright is in the mob. Two mobs, in fact. Not the real mob, of course, but the sort of metaphorical mobs that spring up in technology circles, made up of former employees of a given company. Think the PayPal Mafia, whose members would go on to spawn LinkedIn, Tesla Motors and Zynga and be among Facebook’s earliest investors.

Albright belongs to the m-Qube and Quattro Wireless mafias, the former having given way to the latter, as well as daily-deals site BuyWithMe (now owned by Gilt Groupe) and social/mobile commerce company Unbound Commerce.

After Verisign acquired mobile-messaging firm m-Qube in 2006, Albright and three other former m-Qube wiseguys co-founded mobile ad network Quattro. Apple acquired Quattro in 2010, converting it into the company’s iAds platform. Since then, former Quattro employees have gone on to launch mobile targeting startups Adelphic, AdMobius and Albright’s own SessionM.

“I love it,” Albright says of the Quattro diaspora that has spread out to tackle mobile advertising. “It’s a sign that we had a really high quality team proving to be great entrepreneurs.”

Albright may not be a legitimate mafioso, but he does have a mobster’s bravado—in terms of business strategy if not personality. When he debuted SessionM in May 2011, the startup had $6.5 million in funding, three employees and little else. At the time, all anybody knew about the company was that it aimed to drive user engagement in mobile apps for brands. In other words, boilerplate for any mobile ad firm.

Less than a year later, SessionM officially launched as a mobile-rewards platform, and today the Boston-based company employs 60 staffers and operates a service that reaches 40 million people each month.

“One of the things I saw toward the end of my time at Apple and iAd was this trend of apps getting a ton of activity, millions of users and downloads, which are great stats,” he says. “But when I dug into the active user numbers and how long they’re with the apps and looking at ads, it was apparent that was a big challenge in the space.”

SessionM is Albright’s means of tackling that challenge, aiming to create “power users of content and advertising,” he says. It specializes in enabling brands including Honda, HBO and McDonald’s to provide users of mobile apps from the likes of The Weather Co. and Shazam with reward points for stuff they do naturally within the apps. Those points can be redeemed at a mobile storefront operated by SessionM.

According to Albright, advertisers enjoy engagement rates of upwards of 70 percent, with video ads nabbing 90 percent completion rates. “I would’ve killed for that number in past businesses,” Albright says, referring to the number of consumers who opt in to interact with an ad.

SessionM isn’t yet profitable, but Albright claims that top-line revenue “is exploding right now.” That’s expected to continue as the company builds out native tablet support to take advantage of devices’ larger screens and expands its footprint internationally—perhaps, in time, spawning its own mafia. —Tim Peterson


Naveen Tewari
Founder and CEO
InMobi

Naveen Tewari got out of text message ads before it was too late. Sensing the limitations of the space in terms of scalability and engagement, InMobi’s CEO began in 2007 to focus on the then-nascent mobile-based Internet ad market (the company was previously called mKhoj). For Tewari as well as InMobi, the move was equal parts brilliant and lucky.

Today, InMobi, a mobile ad-delivery platform/network, is in over 160 countries, serving ads to nearly 600 million consumers.

Even with that huge base, Tewari believes we’re still in the earliest of early days. “I think in general, in some pockets, we have a rudimentary understanding of mobile, but we’re just scratching the surface,” he says. “Our understanding of user signals is largely primitive.”

At the outset, Tewari saw the growing mobile market in India as the best place to launch his company. A few years later, InMobi entered the U.S., where the company’s international experience proved helpful in assessing the strengths and limitations of the market, including how a PC-centric attitude can serve to slow mobile adoption.

“Sophistication in the U.S. is very high and the buyers are the most sophisticated anywhere, but they have a very strong Western bias,” he says. “The U.S. is the largest mobile market in the world, but other markets as a percentage of digital space are moving faster to mobile because there is much less loyalty to the PC.”

Tewari also sees the fragmentation of the technology market as a factor. In China, adoption is very fast since there are only one or two services. But in the U.S., he adds, “the challenge comes from the highly segmented market, which creates delays. Quite ironically, it seems the lack of segmentation in the market allows other countries to grow more.”

Thus, Tewari wants mobile ads to get a lot better, both from a creative and technological perspective.

“We are working on the idea that we should be able to predict what a user wants in the next minute, seven days, 30 days or even 90 days,” he says. “That’s what mobile should be able to give us. There is a lot of data around user experience that is nowhere near where it should be. Whether I’m standing up or lying down or sitting or walking, this context level isn’t there yet. If I know the user is walking, I’m better off showing more graphics than text.”

Going forward, Tewari’s enthusiasm for such precise targeting will surely be met by screaming from privacy advocates. But that’s a long way off anyway. For the time being, “we have to simplify mobile,” Tewari says. “What I mean by that is that mobile ads just have to work. Because they don’t always work, people have a hard time accepting their value. We are hard at work putting together a complete solution from creatives to optimizing both supply and demand side platforms. Hopefully a unified solution will allow people to see the value of mobile and raise CPMs.” —Charlie Warzel

Brian Wong
Founder and CEO
Kiip

Brian Wong’s “forced sabbatical” might be the best thing that’s ever happened to the 21-year-old CEO of Kiip (pronounced “keep”).

After being laid off in 2010 during Digg’s downward spiral, Wong took a trip to Asia. He noticed on his flight the scores of passengers entranced by games on their smartphones and immediately thought about the advertising implications. “I started to do some digging and realized that the way that advertising had manifested on mobile was abysmal,” he says. “I dissected every mobile game I could find and noticed quickly that there was one universal component across every game: the achievement.”

Following that initial revelation, Kiip’s mobile ad philosophy is all about granting both digital and physical rewards for users in the moment. Essentially, Kiip provides consumers with virtual rewards, coupons, gift cards and the like for achievements in gaming—for example, accumulating a certain number of points. The theory is that brands inserting their messages between gaming levels, while providing value, is far more welcome than a mobile in-game banner.

Kiip isn’t the first to attempt a reward-based in-game/in-app system. But unlike Kiip’s competitors, Wong has made sure his platform feels serendipitous. “We want people to encounter Kiip on their own terms,” he says. “I’ve always been about tapping into existing patterns of behavior—it’s the most organic. Human beings are not Pavlovian dogs.”

Even by wunderkind standards, Wong is young (he graduated from college at 18). It’s something he wields to his advantage. “The stigma of a young CEO has actually converted into a positive thing for us,” he says. “People expect you to be innovative and energetic when you’re young.”

Wong’s youth is most apparent in his philosophies on the future of advertising and mobile. Unlike many digital executives, Wong doesn’t do much hand-wringing over the struggles in mobile advertising.

“I think advertisers have spent too much time moaning about how small and limiting the mobile screen is but have forgotten that it is one of the most intimate devices that we’ve ever owned,” says Wong. “As a result, it is the best opportunity for a brand to create an even closer relationship with their customer.”

Measuring real consumer engagement as opposed to calculating CPMs, Wong believes, is crucial to the future of mobile. “CPMs are rooted in volume and tonnage thinking that was based on a lean-back model, but the phone is a more dart-by-dart approach,” he says.

To accomplish that, Wong and Kiip have settled on a mantra for 2013, deciding that “moments matter.” Kiip will continue to hone the company’s ad model through better contextual targeting. “A fitness moment for a male [completing a run with an app, for example] would be a great opportunity for a Gatorade reward,” Wong says by way of example. “It brings the brand into that moment and gives them an opportunity to tie that reciprocity to a real emotion.” —C.W.


Jason Spero
Director, mobile sales and strategy
Google

Jason Spero doesn’t have it easy. As Google’s head of global mobile sales and strategy, he is tasked with getting brands on board with Google’s mobile products, despite plenty of investor scrutiny over whether the search giant can successfully monetize mobile.

“I get [the Wall Street question] on almost every call. What I say is, mobile does not have a value creation problem; it has an attribution problem,” Spero says. “The sooner we as an industry can understand how mobile drives different behaviors and work with marketers to harness and track behaviors, people will understand its value in three dimensions.”

While not altogether solved, Google did chip away at the problem last week when it enabled advertisers to set up their AdWords campaigns to better target ads based on a user’s location. Ads can be tweaked based on whether a person is using a smartphone at lunchtime near a restaurant or at home on a tablet looking for dinner delivery options.

That helps shift perceptions about mobile from that of a siloed channel to one of many interchangeable devices a consumer uses over the course of a given day. It’s also what Spero spent much of 2012 evangelizing, “seeing mobile as part of a larger hole, less as a device and more as context,” as he puts it. “Mobile advertising is how we pay the bills and how marketers reach consumers and engage consumers and have conversations, but the fascinating trend is connectivity everywhere.”

While that makes things more complicated, it also affords marketers many possibilities. Spero likes to use Hertz Rent-A-Car as a hypothetical. It makes perfect sense for Hertz to run mobile ads if it is able to target a consumer at the airport where he may be in need of a ride, he explains, and a mobile rich media or video ad could be even more valuable in that situation.

But using the tactic to reach someone at home working at his desktop computer would probably be a waste. “If you’ve got a rich-media experience but no intent and no context, then you’re putting the Hertz experience in front of people who don’t need a rental car,” Spero says.

If Google gets things right, then a brand like Hertz may well spend more with Google—and if Google connects the attribution side of things, advertisers will spend even more. Or so the thinking goes.
The company has already shown some proficiency in mobile advertising. During its third-quarter earnings call, CFO Patrick Pichette said Google’s mobile business was on an $8 billion revenue run rate, with mobile ads making up the “vast majority” of that. To grow that revenue stream, Spero and his team will need to excavate more ways for brands to effectively and efficiently advertise.

Says Spero: “My gig—and you’ll hear more about this in the coming months and weeks—is to try to deliver the right marketing levers to help our customers build for the insights they have about consumer behavior.” —T.P.

Seth Priebatsch
Founder, CEO and chief ninja
LevelUp

Two years ago, wearing his signature neon orange polo shirt and matching sunglasses perched on top of his head, Seth Priebatsch captivated 11,000 attendees at SXSW Interactive with a keynote on mobile-social gamification—a key feature to his then-No. 1 priority, the app Scvngr. A born marketer, the 24-year-old also leveraged the speaking gig to announce his new mobile app, called LevelUp. It was a turning point for the digital wunderkind; Scvngr has taken a backseat as LevelUp has steadily gained a foothold in the mobile payments niche.

“The vast majority of the business these days is on LevelUp,” Priebatsch recently told Adweek. “We use the same game mechanics that are in Scvngr and the same mobile tie-ins to motivate consumer transactions. But at the end of the day, if you are pitching a local business and cannot show them how it will make them money—they are not interested in generating tweets—they are just not going to care about the product.”

In fact, 5,000 merchants have implemented LevelUp, whereby users don’t merely show they are at a location with a tweet or check-in, as is the case with other social-mobile apps. Rather, small businesses set up rewards to entice customers to pay with the app—awarding a $5 credit for buying anything, for example, or encouraging loyalty by offering a $10 credit per $100 spent. Merchants also get analytics from LevelUp. “They can track customers to see real ROI [stats],” Priebatsch explains.

LevelUp has achieved more than 500,000 users, typically professionals age 23-35, but many of them are also college students, per Priebatsch. “It’s almost a perfect split male-female,” he reports. “They are highly concentrated in urban markets, primarily because that’s where our merchant partners mostly do their business. In the early days, they were mostly smartphone users who owned the latest iPhone and Android devices. Now our users skew toward a wide variety of smartphones, showing that we are growing among a more mainstream crowd.”

The startup has grown from 30 to 100 employees in the last two years, and last July got a $12 million infusion from investors. Its leader—who goes by the title “chief ninja”—has a take-all-comers attitude about a mobile payment and deals space that includes much bigger names like American Express, Google Wallet, PayPal, Isis and Square.

“It’s not actually that there’s too much noise in this space—it’s that there’s not enough,” Priebatsch contends. “It’s like there’s 150 people in a conference center shouting at each other while the rest of the world outside that building doesn’t notice. And that’s the problem we are still trying to break out of.”

He adds, “The message we have to get out there is that it’s not about paying with your phone. Who cares about that? You have to have more value. It’s about paying in a slightly different way that’s better.” —Christopher Heine

Jeff Kanter
Product manager, feed ads
Facebook

Everything changed for Facebook in 2012. The social network started the year as a private company with zero mobile ad revenue and ended it as a public one with 23 percent of its $1.33 billion in fourth-quarter ad revenue coming from mobile. Much of that transformation can be attributed to Facebook’s introduction of ads in its News Feed in the spring.

“It’s pretty amazing if you think back to a year ago today, we didn’t even have ads on mobile or ads on the desktop feed,” Jeff Kanter told Adweek last week at Facebook’s Menlo Park, Calif., headquarters.

In many ways, Kanter’s 2012 was a microcosm of Facebook’s. A five-plus-year vet of the company, early into the year the product manager transitioned his focus from Facebook Pages to the as-of-then-unreleased feed ads. The shift from working with marketers on their owned and earned media strategies to specializing in paid media products may seem dramatic, but Kanter’s experience was crucial in preparing him to help grow Facebook’s feed ads business fast. Now, 65 percent of the company’s advertisers appear in the News Feed.

That’s because Kanter worked on the first redesign of Pages, a significant step in Facebook’s budding revenue strategy. Launched in 2009, Facebook Pages represented the company’s commitment to connecting brands and users without banner ads. “It was the first time it gave Pages a voice, so they could actually distribute their posts into people’s feeds,” Kanter says, referring to the redesign.

Over the last year, Kanter has applied that experience to helping advertisers get their messages into people’s News Feeds through paid means. And as more of Facebook’s users gravitate toward accessing the service on their smartphones and tablets, that means even greater attention to the mobile feeds. The company counts 680 million mobile monthly active users, and 157 million of its 1.06 billion monthly users access it exclusively via mobile.

Kanter works primarily with two other teams at Facebook. In addition to the designers focused on creating Facebook’s ads, the ads product marketing team (dubbed the PMM team) serves as the voice of Facebook’s advertisers, informing the development of new products and features. Meanwhile, the user experience team (or UEX) gauges consumer sentiment, conducting test groups around new units and asking and responding to questions about ads or stories in feeds.

Kanter wouldn’t share much about his team’s road map for 2013 except to say it spans refining existing ads and developing new ones. In a nod to his directional thinking, Kanter pointed to a recent move this year to make the images tied to links shared in the desktop News Feed nearly three times larger. That may seem like a small thing, but it’s just one of many projects on his mind. As far as Facebook has come in the past year, he says, “We have a lot of work to do.” —T.P.

Jack Dorsey
Founder and CEO
Square

“Life happens at intersections,” said Jack Dorsey at a tech event last fall. “It’s important to recognize what’s happening in that intersection and determine what to do in it.”

With that metaphor, the 36-year-old tech star—who launched Twitter six years ago and Square in 2009—added another layer to his Zen-like public image. But in the logistical sense, the quote also aptly describes the mobile marketing industry that Dorsey has become surprisingly important to.

What a run. Just a few years ago, Dorsey was simply a budding Internet player. Now, with Twitter taking in hundreds of millions of dollars in mobile ads and Square gaining steam in mobile payments, Dorsey heads two formidable companies that enable a meet-up between marketing and commerce.

“I think he must have a clone,” says Mike Wehrs, CEO of Scanbuy. “You got to give the guy a lot of credit. Creating one of those companies is a one-in-a-million shot. To make two is incredibly rare.” Wehrs adds, “If I had to pick one company that’s going to affect mobile marketing the most, I’d probably go with Square. It’s allowing regular people and small businesses to accept payments on the fly.”

While Square has no shortage of rivals—among them, Google Wallet, Intuit’s QuickBooks, PayPal Here and LevelUp—the dapper Dorsey seems to inspire confidence in the larger business community.

American Banker, the 177-year-old granddaddy of daily financial newspapers, named the St. Louis native 2012’s Entrepreneur of the Year and valued Square at $3.25 billion.

The startup has raised $341 million from such notable funds as Khosla Ventures, Kleiner Perkins Caufield & Byers, and Sequoia Capital. And a who’s who of tech players has invested, including Yahoo’s Marissa Mayer, Foursquare’s Dennis Crowley and Twitter co-founder Biz Stone.

Starbucks has also jumped on the Square bandwagon, having invested $25 million and introducing it in its stores nationwide. In announcing the deal, Starbucks CEO Howard Schultz illustrated his confidence in Square’s technology this way: “Once Jack and I sat down, it was very obvious to me.”

Then there’s Twitter, which turned social media and the business of news reporting upside down. Sixty percent of Twitter’s approximately 200 million active users employ the microblogging service via mobile devices. During this year’s Super Bowl game, tweets about the event totaled 21.4 million, many of them by way of the smartphones of football fans at parties and pubs.

Oreos created enormous buzz after creating a clever ad around the Super Bowl blackout that utilized Twitter’s new mobile app, Vine. According to Allthingsd.com, Dorsey was instrumental in acquiring the app, even as his colleagues were unsure about the deal.

One might say they were at an intersection—and Dorsey decided which move to make.

“He’s quite a force to be reckoned with,” Wehrs says. “He’s a tremendous entrepreneur and operator.” —C.H.