Mobile ad companies seem to be split into two camps: Those serving up small versions of the Web’s standard text and display ads, such as Google (GOOG), AdMob, etc., and those trying to set off in a different direction, such as NYC-based Medialets.
Medialets is looking to popularise disruptive multimedia ads that capture users’ attention and fetch a premium ad rate in the $20-30 CPM (cost per 1,000 impressions) range. Over the last year, it’s elbowed its way into the Apple (AAPL) iPhone app market by offering an ad network and free analytics software, which has helped it sign up more than 1,000 app publishers. Reaching 14+ million unique users since last summer, that suggests it’s reached about 40% of all iPhones and iPod touches that Apple has sold.
Now Medialets has raised $4 million in Series A financing to build out its platform, from Foundry Group, DFJ Gotham, and early Google investor Bobby Yazdani. The company, led by CEO Eric Litman, has seven full-time employees (14 total).
Medialets will focus on selling technology to power multimedia ads for iPhone apps, such as the “shakeable” Docker’s ad embedded below. (Other initial advertisers include Paramount, FedEx, MasterCard, and Tribune Media.) These ads take advantage of the iPhone’s (and other smartphones’) advanced features like its large touchscreen, powerful processor, advanced Web browser, location functions, motion sensor, etc.
Medialets plans to sell its technology to mobile app publishers and ad networks, focusing on serving and measuring the ads versus setting up a sales force and brokering deals.
Will it take off? Assuming the technology works and advertisers buy in at premium rates, publishers could certainly get excited about it. But obviously some of the company’s success will also be based on how people react to the ads once they’re in heavy rotation, and it’s too early to tell how that’s going to turn out.
While the sample ad we’ve seen is novel and engaging, it’s also important not to annoy users, too. There’s only so much “fun” people want to have with their ads, and there’s plenty of competition in the App Store. Balance will be key.
So we’re curious: Do you find these ads charming? Do you want them in the app you’re using or selling? As an advertiser, do you want try them? Or are they too much?
The good news is that mobile advertising is likely in its infancy, so now’s a great time to experiment. Sanford Bernstein analyst Jeff Lindsay predicts mobile advertising will become a $7.2 billion market worldwide by 2012, up from $700 million last year.