Mobile app downloads will reach 102 billion in 2013, up from 64 billion in 2012, according to a September report from Gartner. The research firm also said that in-app purchases will account for 48% of app store revenue by 2017, up from 11% in 2012.
ActionX, a startup created by a co-founder of the online music service Thumbplay (acquired by Clear Channel Communications in 2011), initially drove app downloads until it spotted a bigger opportunity helping commerce companies turn customers into engaged app users. The 1-year-old company has raised $5 million in funding and its clients include Forbes and Jack Threads.
AdExchanger spoke with ActionX co-founder and CEO Evan Schwartz about the mobile app retargeting space and the company’s road map.
AdExchanger: Where did the idea behind ActionX come from?
EVAN SCHWARTZ: After selling Thumbplay, I noticed there were a lot of people looking for help with mobile customer acquisitions and driving mobile transactions. We [Schwartz and former Thumbplay COO and CFO Scott Marshall] got enough calls where we decided to build ActionX to help brands drive transactions through mobile advertising. We focused on driving consumer actions such as a mobile app download, or a YouTube subscription.
How did you transition from driving downloads to driving engagement?
At first it was all about helping companies get tons of downloads, but people realized that not every download is equal and not every download turns into revenue. So we took a step back and looked at what worked on the Web for driving transactional advertising and the only thing that works is retargeting. So we put our entire products team on building a retargeting engine that focused first on mobile and now multiscreen to help brands not only drive customer acquisitions but get customers to come back. We launched our new platform about four months ago with JackThreads and we now have customers from flash sales to pure ecommerce sites to social shopping apps.
How does your retargeting solution work?
We have several ways for brands to share their non-PII (personally identifiable information) behavioral data with us. We have an SDK; a simple tagging solution for mobile apps, the mobile Web and desktop Web; and we can accept data from any of the major third-party analytics providers like HasOffers and Kochava.
Can you give me a use-case example?
The great thing about ecommerce is many of these brands require you to sign in or they keep you signed in and we can link the non-PII Apple IDFA or Android ID or cookie to a non-PII customer ID that the retailer has so we can look at behavior across screens and retarget across screens.
Almost all the retargeting is on in-app ads, so when we’re out buying on exchanges, those ads are being served on other apps tied to this device ID. In the case of JackThreads, they implemented our technology in their iPhone and iPad apps, and Android as well.
When someone goes to JackThreads' app on an iPhone, for example, and looks at the product pages, the data that tied to Apple’s IDFA is being streamed to us in real time. We can say that IDFA #123 is a search for this particular pair of Puma sneakers that someone added to their cart and left it there without completing the transaction.
We know this person has an account with JackThreads and they’ve made purchases there before. From our side, we’re then segmenting those IDFAs in real time, saying here are the sneaker buyers and here are the people who are typically interested in promotions.
We divide those IDFAs into segments and then we’re bidding on those consumers on the exchanges. If we win the bid, we then serve the ad based on the profile of that person, IDFA #123. If we’re doing full dynamic creative, we can show that person the exact pair of sneakers that he or she had looked at in another app. If that person clicks on the ad, it will take him or her to JackThreads' exact sneaker page where he or she can purchase the sneaker.
How do you differentiate yourself from other companies that offer similar capabilities, like URX and TapCommerce?
Unlike many of our competitors, we built our platform from the ground up to be mobile first, not mobile only. Retail clients are interested in a holistic marketing program across screens and just focusing on mobile is missing a big part of the path to purchase.
Our platform is able to connect user behavior across screens and retarget across screens. We are doing cross-device campaigns already and we expect the majority of our campaigns to extend beyond just mobile in 2014. [In addition] we believe our dynamic creative engine is unique in the marketplace with its ability to deliver product-level creative of any size in both static and rich media formats.
Are you also tracking the behavior of visitors who come to a site from a mobile browser?
We’re starting to do that on Android. It’s a little more challenging in the iOS world. We can track in terms of retargeting on the mobile Web except through Safari, since there are challenges there in terms of the lack of third-party cookies, but we are able to have the client send us data. We can have data passed to us from every screen so we know you might be on your iPhone now and three hours ago you were on your iPad.
How do you address consumer privacy concerns?
During implementation, we make sure nothing is being passed that we don’t want passed to other parties. We only use device IDs and we also work with Evidon to make it easy for people to opt out [of receiving targeted ads]. Every banner ad we serve includes the AdChoices icon, which also allows people to opt out of receiving targeted ads.
What is the relationship between ActionX and the cross-device recognition firm that was founded by Thumbplay’s other founder, Are Traasdahl?
We don't compete with them and we could see ways that our platforms are complementary. We don't have a partnership today, but there could be ways to work together in the future.
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