Mobile app marketing and performance platform Liftoff hosted its first-ever earnings call as a public company on Wednesday evening, and CEO Jeremy Bondy kicked things off with a refresher course.
“On the supply side, our SSP – or supply-side platform – helps apps monetize their user base via our software development kit, or SDK,” he told investors.
Explaining ad tech to Wall Street is a rite of passage for companies in the ecosystem that IPO and find themselves speaking to a new audience for the first time.
But the more important message that Bondy wanted to get across – one that echoed AppLovin’s pitch to Wall Street last week during its Q2 earnings call – is that Liftoff is more than a gaming company.
Leveling up
Over half of Liftoff’s demand comes from nongaming advertisers, Bondy said, including finance apps, prediction apps, travel apps, shopping apps and productivity tools. He was very eager to make sure that investors understood that this is where the growth opportunity lies.
“This is a marketplace that is structurally under-monetized, with third-party in-app advertising spend estimated at roughly one-sixth of TV on a per-user hour basis,” he said. “Put more simply, attention has already moved into apps [and] ad dollars are still catching up.”
It’s a familiar argument. AppLovin, one of Liftoff’s chief competitors, has spent the past two years making the same case, which is that a platform built on mobile gaming can credibly serve the broader consumer-focused performance marketing ecosystem, including ecommerce.
The third-party in-app advertising market is projected to grow to $136 billion by 2030 – a stat Bondy cited on the call that also appears in Liftoff’s S-1 – with nongaming verticals expanding faster than gaming at 14% versus 11% annually.
The World Cup offered a useful window into how this plays out in practice. During the second quarter, which overlapped with the games in June, it wasn’t just sports-betting apps and prediction markets that saw a lift. Travel apps, finance apps, ecommerce apps and live-scoring apps all ramped their user acquisition spend around the tournament.
“Any activity that’s happening across the app economy where an advertiser has an opportunity to acquire a user – we will be there to … help that vertical acquire users,” Bondy said.
Game changer
Still, there’s perhaps a mite of skepticism in the air. At one point, an investor asked Bondy how Liftoff’s mix would evolve over the next few years, considering that roughly half of Liftoff’s revenue is still firmly in gaming.
Bondy was unbothered.
The mix, he said, is “a reflection of overall consumption patterns in the market,” and Liftoff goes with the flow.
Also, people are multifaceted. A user watching World Cup scores on their phone may also be booking a hotel, hailing a ride, playing a game and checking their bank account.
All of that activity can flow through Liftoff’s platform, Bondy said, and continually enrich Cortex with fresh signals. Cortex is Liftoff’s AI-powered platform that uses machine learning to optimize mobile ad campaigns.
Gaming, meanwhile, is foundational, he said, pushing back on any suggestion that the market is struggling.
“Gaming has been a great innovator of the app economy,” he said. “Free-to-play, in-app advertising, hybrid monetization – those models were pioneered in gaming and are now the foundation of the business across the sector.”
We’ll see how that proposition resonates over time.
Liftoff’s Q2 revenue was $220 million, up 35% year over year, its eleventh consecutive quarter of revenue growth. Its share dipped a little over 5% in after-hours trading.
