Photo: D. Sharma / Twitter
The dirty secret of the mobile ad network business is that its biggest players don’t make money at it. Not Velti. Not Millennial Media. Not Augme/Hipcricket. Almost certainly not Opera. And not Pandora (which has a huge mobile ad business, but no bottom line earnings).We met with the CEO of one mobile ad network recently who claims he’s achieved what, in this business, counts as a miracle: He’ll turn his first profit in Q4, and be fully profitable in 2013 and beyond.
Meet Dipanshu Sharma, CEO of xAd.
xAd has an interesting business model. It’s a mobile ad network like everyone else, but it specialises in location-based targeting almost entirely for small and medium-sized businesses, and they pay mostly based on performance—NOT eyeball impressions.
Just like everyone else, xAd runs ads in apps, but the ad is only served once the user’s location is verified by xAd’s SmartLocation technology. That allows xAd to target someone with an ad in an area as small as a three-foot radius, Sharma claims.
The advantage for advertisers is that if a user looks at an app while they’re shopping in Best Buy, xAd can serve that user an ad touting a cheaper product at the store across the street. This practice—where shoppers use stores as if they were only showrooms for products, and then use their devices to find them more cheaply elsewhere—is known as showrooming and is one of the most hated new trends in brick-and-mortar retail.
xAd tweaks the usual model even further: most clients are on a performance-based payment plan, meaning they only pay for an ad if a user clicks on it and generates a map with directions to the advertiser’s store; if it generates a phone call to the business; or if the user drives to the store (which xAd can track).
“We’ve been going out to bigger brands since March,” Sharma says. xAd counts Dunkin’ doughnuts and Dell among its national clients.
Sharma says he has 1.2 million advertising clients — many of whom are mum-and-pop joints — running 3 million campaigns per day. His network generates 1 billion impressions per month, he says. He declined to cite his revenues. The company has taken $13.7 million in total financing from several backers, and has 70 employees. Most of them are based in San Francisco, but there are up to 10 in new York and 10 in India.
- This Mobile Company Wants To Use Twitter To End Retail’s’ Most-Hated Trend: ‘Showrooming’
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