AOL Backs Ad Startup Appssavvy

CEO touts 'activity-based' ads

Appssavvy, a startup promising an alternative to traditional online advertising, has secured new funding from big names in the media world.

The company's new round totaled $7.1 million, and it came from AOL Ventures, as well as Appssavvy's previous backers, a list that includes True Ventures, The New York Times Co., founder Scott Kurnit (who's also experimenting with new ad models at his startup AdKeeper), and StockTwits co-founder Howard Lindzon.

Earlier this year, Appssavvy shifted its focus from standard display ads to what the company calls its "adtivity" platform. The goal, says co-founder and CEO Chris Cunningham, is to create a standard form of advertising that's "activity-based" rather than measured in page views and designed to interrupt the user's experience.

The company partners with social game publishers like Disney and Omgpop to play adtivity ads at opportune moments during the game, say when players have beaten one level and are moving on to the next, usually with a customizable frame that highlights the ads' connection to the game. As a result, Cunningham says Appssavvy opens up new ad inventory, where brands can reach a targeted, highly engaged audience.

According to Appssavvy, more than 50 brand advertisers—including American Express, Chase, and Coca-Cola—have run adtivity campaigns. Cunningham's goal is to eventually take the model beyond gaming. For example, a website could enable ads that play whenever someone leaves a comment.

"Advertising works, as long as you think about people's experience first, as opposed to interrupting what they were doing," he said.