Late last year mobile marketing platform AppLovin acquired in-app bidding start-up MAX. The AppLovin team has since built out the MAX platform, and integrated the real-time mobile header bidding solution into its wider ecosystem.
Now MAX has had a little time out in the wild in the hands of mobile developer and publisher customers, we caught up with Carl Livie, MD EMEA of AppLovin, to talk in-app bidding. Could it be that the long-promised in-app bidding revolution is finally underway? And how long will it be before the in-app bidding waters settle, and it emerges as the standard ad monetisation tool for mobile games?
AppLovin now offers a fairly diverse spread of solutions and products. Is there a singular unifying aim that those offerings serve?
We talk a lot about bringing the best content to gamers around the world. That's sort of the overlying goal; the company's overall aim. We do that in a number of ways. On the one hand we can help advertisers find suitable users, and help game developers make money with their games through ads. That's something of a foundation for us.
But now we do a little more. Originally we existed as an ad network, but we started to branch out as we developed all this marketing and monetisation experience. As that experience built, we started to look at ways we could help smaller developers with the marketing operation that they need to build around their games. And that’s why we founded Lion Studios; to help mobile game developers of all sizes grow by publishing and marketing their games through a studio informed by AppLovin's experience. The core idea of what AppLovin is has sort of evolved over time. As I look at the core, we are a marketing platform. And we're actually really good at getting a lot of traction for games. However, there's so much great content out there today. And there's so many great indie developers out there. How do we get those guys the scale that they deserve? And that's how Lion Studios was born.
So you're broadened your offering to welcome in a wider range of studio and publisher types, including smaller ones?
The the beauty of the gaming and the mobile gaming industry is that it can be driven by indie game developers and small teams; and those guys can be influential in so many ways. They are important. Lion Studios really just provides a way for those developers to get their content out there, and lets them be able to build a business. But things keep evolving. Now what we're talking a lot about at AppLovin is in-app bidding, so we acquired MAX and are working on building on that bidding platform, which is now very much aligned with the same goal of bringing the best content to as many people as possible.
Could you tell us a little more about MAX?
MAX is for anybody who doesn't have the capacity to maintain a skilled ad operation by themselves. And that’s fine. A lot of developers want to focus on making good games, which is great. But if we’re talking about mobile and free, they need to be able to monetise and scale successfully. So the idea behind building out this bidding platform is to make in-app building more accessible, and to make bidding fair and unbiased. We believe there is an approach that can see optimisation, waterfall management and so on just fall away. Those things don't have to be around forever. That will mean publishers and developers will make the most money that they can, because the auctions will be fairer, and ultimately they can then concentrate again on making the best content. In-app bidding could equalise the entire industry; and that’s truer with the more people that adopt it. And those who currently know how to game the monetisation world – but not make the best content - won't be ahead anymore. The idea is that the best content will win because monetising will be equal for all.
Is it fair to say, then, that you're working to simplify the process of placing ads in games? Or maybe make it a more elegant progress?
That’s it exactly. It’s simplifying the way in-game ads work, while keeping their power. The advantage of innovating in this space is twofold. First of all you simplify it. As a result, you enable the best content to succeed. Content quality will be more important again. And then on top of that if it’s an auction, and if ad monetisation isn't based on bad technology or poor decision-making, then the yields that publishers earn will go up, which makes the entire industry grow. Ultimately everybody makes more money if in-app bidding is adopted. We as a business, of course, also grow. And while we're not philanthropists necessarily, we really do see this as a way to help the entire industry grow, and to help developers grow. We grow with everybody else.
How long, then, until this kind of democratise, streamlined, accessible and fair in-app bidding becomes everyday for game makers and publishers?
I think it's still going to take some time in its purest form. I'd give it another year or two. That time-frame is because the main issue within ad bidding currently is that many ad providers and many demand parts are not participating right now. Lots of networks are participating, but some of the bigger ones like Google or Vungle and some other big ones aren't participating. As a result, it's still not quite there. Here we’ve talked about the demand density issue a lot, and that’s lead us to develop MAX as it is now as a hybrid solution.
What do you mean by a 'hybrid solution'?
We see that MAX is becoming the leading in-app bidding platform around gaming. That probably comes from the way we have built MAX into a hybrid system that combines in-app bidding and the old waterfall model. And that sort of allowed us to leap ahead because, in-app bidding doesn't exist in its purest, truest form yet. Platforms like Google also don't bid into other platforms at this point. You need Google's demand in order to make the most money. So we're doing what you could call a ‘half waterfall, half in-app bidding’ thing right now, and it is working well.
And how does MAX integrate into the wider AppLovin ecosystem?
So we do a number of things if you're a game developer. You can use our platform to grow and buy users to monetise your app. We’ve tried to simplify that as much as possible to enable everyone - especially with in-app bidding. That lets developers use our platform for themselves
But then there are the small teams we have met with so many times, with maybe two people forming an indie studio. They might not have the budget or experience with things like programmatic ad buying and so on. Or the just don't want to do that side of things. So instead they can publish their game directly with Lion Studios. They'll come to an agreement with Lion Studios, and like any publishing agreement work on a revenue share basis with us. There we'll handle everything.
And we've done that pretty successfully already. I think at this point there's been three games in top 10s which are published by Lion Studios. That's working quite nicely and for now it's all young teams, all across the world.
We have a British team in there. There's an American team and a Canadian team too. That’s working very nicely for us and the small teams. Finally, on a larger scale we also do invest in studios. That’s a little more away from the indie developer folks, but also focused on gaming companies that build really high quality products. So AppLovin is always looking at the way it can support mobile developers, and the wider game industry, as that really works for everyone, including ourselves.