Mobile Ad Firm Kargo Eyes Programmatic Premium

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Harry-KargmanKargo, a mobile ad platform, has undergone several transformations and is about to make another one. Following the 2001 dot-com crash, Kargo pivoted from providing wireless operators with software and services to helping media brands launch mobile ad campaigns. The New York City company now has a client roster that includes CBS, Univision, Meredith and other brands.

AdExchanger spoke with CEO Harry Kargman about the company’s next move into programmatic premium advertising.

AdExchanger: What problem is Kargo trying to solve?

HARRY KARGMAN: The way we see the market evolving is a lot of the dollars in the market seem to be in the lower funnel. The problem Kargo is trying to solve is how [to] create unique advertising for huge brands like P&G that want great experiences, but also transparency and scale.

Who are your clients?

We’re not well-known, but when you look at our publisher landscape, we work with Meredith across all of their properties. We also work with Rodale, Bonnier, CBS, Billboard, Vice Media and Complex Media. All of them have integrated our ad platform into their mobile apps.

Can you give me an example of an ad campaign that you’ve created with a brand?

For example, we built an Instagram unit that instantly opens with a hash tag of the brand and allows you to participate by taking a picture, and it’ll auto-hash the image to the brand’s channel. We ran this with McDonald’s. They were really happy since the paid media included earned media. For every banner ad that we’re driving, you can click on the screen to open your Instagram application and build a following.

Do you mainly do app-based campaigns?

A lot of the industry is focused on apps because they’re trying to do acquisition campaigns. We believe a user is a user and it doesn’t matter if they’re on mobile Web or in-app. So we make sure that each platform has the ability to serve the same creative on the mobile Web and app.

We do slightly more [campaigns] on mobile Web, though. If you took out gaming and Facebook, you will find that mobile Web usage far exceeds that of app-based usage. What we’re seeing from our numbers is that for traditional publishers, there is greater usage and more impressions being driven off the mobile Web vs. apps.

What enables the mobile Web to remain relevant with consumers?

The mobile Web has a lot more freedom in that you can do more on it; you can check a movie time, look at a site or browse editorial content. The mobile Web gets you in without having to download an app.

Also, if there’s a link that sends people off to get more information on Twitter, Facebook, Pinterest and other social sites – all of that pushes into the mobile Web. Apps are used for a specific purpose. You need a focused need to open the app and it can be a better user experience for those purposes, but for editorial experiences like reading an article, the reality is mobile Web is a much more free way to do that.

What type of results are you seeing in video?

The best CPMs in the marketplace today are on video. Having video on people’s editorial sites and serving pre-roll and post-roll videos provide the best ROI on an ad impression. We’ve seen north of 80% completion rates when people go into the video player even on their iPhone in a mobile Web or app environment.

What is on your road map? What are you looking to achieve in six to 12 months?

We’ve been around a long time, but we’ve only been in this business for about three and a half years. And when we look at our growth as more dollars shift into mobile, we’re just holding on to the saddle. Last year we had two offices, now we have six and our team has grown from 20 people last year to 70. None of this has been from venture money; we’re lagging in hiring because we’re using the cash from our ad and publisher revenue to keep growing the company.

One of the things that we see being inefficient is the RFP to I/O process. To the degree that we can introduce a premium, programmatic way that lets advertisers run inventory in a matter of days, not months, that’s part of our major growth trajectory. We’re also looking to continue innovating on the ad creative and video player front.

Would you offer a real-time bidding (RTB) platform?

I don’t think we’d ever do RTB. I just don’t see that as a match with the inventory that we have. The problem with the RTB environment is that it’s a lower funnel, exchange inventory where everyone is bidding on the same inventory and it maxes out at about $1.

When you look at the RTB environment, it isn’t a premium environment. I’m hoping that changes, but when you look at it, it’s mostly long-tail no-name sites. There’s no accountability and no confidence by large brand advertisers that their goals are going to be met.

What we’re looking at is programmatic premium, which creates a frictionless way for brands or the agency to buy inventory a la carte.

How do you define programmatic premium? 

What we call programmatic premium means the rate card is established. So people know what the price of the inventory is. It’s not on an RTB bidding system. What we want to do is provide an easy way for people to set up and run campaigns from a console.

We’re making the buying process much more efficient as we work with partners to create a dashboard for analytics and the next natural progression for us is to enable our partners to reserve inventory and purchase it in a more efficient way. That’s our vision for the next 12 months.

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