From Tapjoy’s website
Monetization platform Tapjoy is adding more advertisers to its dual service of mobile marketing and mobile advertising.
Today, the San Francisco-based company is announcing a partnership with MoPub, AerServ and Fyber, three adtech companies that connect mobile publishers with advertisers.
But to understand this new announcement, let’s first walk through what Tapjoy does.
The company originally became known for its rewarded advertising in mobile apps, where a user is offered premium content or other incentives — such as access to higher levels in a game — in exchange for watching a video ad.
One can think of this approach as a bribe or as a trade of attention for additional goodies. But this kind of performance-based ad appeals to users because they can “earn” additional content or privileges in an app without paying, and the advertiser only pays if the user has played the video ad.
In 2014, Tapjoy bought the South Korea-based marketing automation company 5Rocks. Since then, the integrated platform has combined that acquisition’s notifications, user segmentation, and predictive analytics with the previously existing performance ad platform.
This has allowed Tapjoy to determine, via predictive analytics of behavioral data, that User A is likely to buy content in an app. Paul Longhenry, Tapjoy’s Senior Vice President for Strategy and Business Development, told me that only three or four percent of app users make in-app purchases.
But they are golden users to the app publisher.
“If someone is willing to buy content,” Longhenry advised, “don’t annoy them with an ad.”
Those buyers are segmented by Tapjoy and offered marketing messages about buyable content, which is sold by the app publisher.
The other app users, which Tapjoy identifies as being non-buyers, are segmented and shown rewarded video ads. Essentially, Longhenry said, “we determine between marketing and advertising.”
Here, for instance, are screens seen at the same point in an app, by two different users. A buyer sees a sales promotion for content (in this case, a virtual ruby), while a non-buyer can have her virtual life revived if she watches a video ad (via the “Revive FREE” button):
Until today’s announcement, Tapjoy has been showing non-buyers rewarded video ads from its own network of advertisers.
Now, Tapjoy is adding AerServ, Fyber, and Twitter’s MoPub, so that more rewarded video advertisers are available to bid on the app inventory space, for those users who are not buyers.
Interestingly, Longhenry told me that Tapjoy doesn’t make money off these additional ad sales, as it does from ad sales from its own network. Nevertheless, he said, the other networks will be offered on “a level basis,” with no preference given to Tapjoy’s ads, although Tapjoy controls the inventory of available space.
And Tapjoy doesn’t make money off its marketing automation side, since it offers the segmentation, marketing messages and predictive analytics for free to the app publisher.
Why, then, is it doing this deal?
Because the addition of other networks increases the app publishers’ fill rates, Longhenry said.
“We don’t fill every ad opportunity,” he noted, either because Tapjoy doesn’t have enough advertisers in certain countries or because an advertiser in its network won’t bid on a user who has shown they won’t play the video in the ad.
“By bringing in more ad demand, we get a high fill rate.”
This makes Tapjoy’s platform valuable to the app publisher. It also gives the company the opportunity to collect the user and performance data, he said, improving its model of what kinds of ads work best for which kinds of users, in which situations. Tapjoy says it works with about 10,000 mobile apps, reaching about 500 million monthly users.
Longhenry noted that rewarded video ads need to work within the context of the app, almost like a native ad, so as not to disrupt the user flow. Collected data can help determine which ads natively work best.
Additionally, Tapjoy is also making the rewarded video ads in its networks, where it does take a cut, available to the publishers handled by MoPub, AerServ, and Fyber.
Last month, mobile marketing automation and analytics platform Upsight bought the mobile monetization and ad mediation platform Fuse Powered. This bolstered a similar model to Tapjoy’s, where Upsight can deliver either support for in-app purchases to users who will buy or ads to those who don’t.
Longhenry differentiated Tapjoy by noting that Upsight charges for its mobile marketing services, takes a cut of ads sold through outside networks, and has access to fewer ad networks than Tapjoy.
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