AppLift is one of the growing success stories to emerge from the recent boom in app promotion solutions. The Berlin-based company focuses on acquiring engaged users for mobile game developers and is a product of the Hitfox incubator, having been set-up by co-founders Kaya Taner and Tim Koschella in August 2012. In the space of just one year AppLift has seen rapid expansion, growing its media partners to more than 750 and working with more than 100 mobile game publishers. Buoyed by a 13 million Series A funding round from Prime Ventures, AppLift has aggressively expanded, opening offices in San Francisco and most recently in Seoul, South Korea. The platform now claims to drive up to over 1 million high-quality installs each month for its 100+ game publishers, while media partners can see eCPMs up to $75.
Mobyaffiliates visited AppLift’s headquarters in Berlin for a talk with CEO and co-founder Kaya Taner on AppLift’s origins, it’s rapid rise, and the current issues facing mobile game developers in an increasingly competitive market.
Mobyaffiliates: Can you explain a bit about your background before you started AppLift?
Kaya Taner: Tim and I both come from a business background. Prior to AppLift, Tim co-founded the online learning startup Lecturio and also HitFox. I for my part worked for a Japanese investor, an e-commerce startup and met Tim at HitFox, where I was responsible for building relationships with online game publishers.
What’s Hitfox and how did it help AppLift get started?
HitFox Group is an incubator focused on games marketing and distribution businesses. The Group currently has several portfolio companies, among others notably AppLift and ad2games, a marketing platform for online games. In other words HitFox Group is the incubator that co-started AppLift.
Tim and I got to know each other at HitFox where we were already fully involved in the (online) gaming space. Our proximity to the sector made it possible for us to closely follow the developments in the mobile games market and spot the clear opportunity. So we founded AppLift last year in June. In hindsight, I believe that timing for our market entry was perfect.
You guys have grown pretty fast since you started last year, what’s been driving this growth?
The first year for us did indeed go very well: due to the high growth of the mobile games market we had already very high expectations and had set ambitious performance goals from the start that nonetheless we were able to significantly outperform. Already, shortly after launch we were working with top global games publishers and media partners alike. Today, we run campaigns for over 100 game publishers like EA, King or Wooga and cooperate with more than 750 media partners worldwide to drive over 1Mo monthly installs for our biggest advertisers.
This growth was due to several factors: Starting AppLift within the HitFox group allowed us to strongly leverage the existing structures and synergies between the different portfolio companies and made it possible to have a very fast start with a clear focus on execution immediately.
Also, we knew through experience form our sister company for online game marketing ad2games, that user-acquisition is a truly global business. So from the beginning we adopted a global approach that we benefited immensely from. Today we have 55+ employees from over 15 nations spread out across our offices in Berlin, San Francisco and Seoul.
AppLift has already expanded into Asia. What kind of challenges does the Asian market present?
We see Asia an extremely important market since it is the biggest mobile games market in the world. For this reason we expanded into Asia only half a year after launching our company. Today, we have an office in Seoul, Gangnam district, the heart of the Korean tech scene.
The challenge in Asia is its high level of segmentation. The device fragmentation on Android is extremely high with a lot of local manufacturers’ devices on the lower price end. It’s hard for game developers to comply with these niche requirements. Additionally, there are also plenty of independent Android Appstores, alone in China more than 100 of which at least 10 play a major role. Also carriers and other dominant players in the market play key roles in game distribution and payment. Lastly, business in Asia is usually done face-to-face, so a lot of time and effort needs to put into meeting clients and partners and winning their trust. All of these points combined make it extremely challenging to enter the market.
However, the business opportunity out there is very interesting. Thus, we decided to put a serious focus on the Asian market and build not only a sales team but also a fully operational entity to cater to help our western clients go east and help our Asian clients go west.
What are the main challenges facing mobile game developers right now?
The overall challenge for games publishers is to find and acquire the right users: those are users who will either monetize, have a high virality (k-factor) or a combination of both.
If we look back at mobile games promotion over the past, we have seen three main waves.
The first wave was characterized by burst campaigns where publishers would pay a lump-sum for a burst campaigns without even being able to track the number of installs that resulted from such a burst. The second wave came with more advanced install-tracking solutions and shifted games marketing to a CPI-based model. The third wave that is currently forming is going towards a model hat takes into account what actually happens beyond the install.
Due to our technology and the games-specific data and know-how we accrued, we are at the forefront of this movement and actively engaging in shaping mobile games marketing towards this direction: we get a significant amount of data pinged back from our games publishers about the user-performance inside of the game and can over time optimize those campaigns towards e.g. monetization and engagement KPIs.
The increased transparency from such an approach does not only yield a superior user quality for games publishers but also leads to a more efficient matching of advertising and inventory space, therefore resulting simultaneously in higher payouts for media partners. It’s a win-win situation.
When looking for a user acquisition platform what do developers need to take into consideration?
Any developer will face a resource restriction in terms of the capacity and manpower available to integrate, monitor and handle partnerships with user-acquisition platforms. Therefore, choosing these wisely will be very important: the focus here should lie on quantitative and qualitative factors. In terms of quantitative factors, developers should analyze (besides volume and CPIs) the ROI of the campaigns. Of course knowing the quality of users a certain UA solution will deliver is impossible beforehand. However, certain signs can help be a proxy when choosing partners: in this regard an increased transparency in terms of e.g. sharing publisher IDs or optimization towards post-install events is generally a good sign. On the more qualitative side of things reputation the UA company enjoys and the existing relationships it has built into the relevant industry will be good factors to indicate whether you want to partner up.
AppLift works with a lot of big game developers such as Wooga? But do you also work with smaller developers and how easy is it to acquire users on a smaller budget?
We work with many small game developers and believe they are very valuable for a functioning gaming ecosystem as a whole. In fact, many of our media partners do not want to only market the same big-name games that are already shown everywhere in the market but are also keen on proposing new and more undiscovered games from smaller players to their user base.
If an indie-developer doesn’t have any budget to do paid user-acquisition, we help monetize his traffic and on top offer the possibility to reinvest the earned amount at a significant discount in user-acquisition campaigns.
Given your focus on acquiring valuable users do you need to be very cautious with the media partners you work with?
We are indeed cautious but in fact there is no issue: every media partner must pass a stringent approval process including an extensive application screening with reference checks of past partners he/she has worked with in the past. After approval, we constantly track every media partner’s performance in terms of volume and user-quality through the feedback loop we have from our advertisers. This setup not only allows for very high transparency but also enables us to see those results very fast and act accordingly if necessary.
Can you talk about AppLift’s plans for the future? Will you be opening any more regional offices? Any plans to broaden the platform to non-game apps?
Looking forward our main focus is to further accelerate the pace with which we have been growing. To this purpose, we are using the funds from our recent USD 13 Mio series A round to fuel additional technology development on the one hand and continue internationalization on the other. We currently have over 30 open positions in all areas from intern to C-Level across our offices in Berlin, San Francisco and Seoul. More regional offices will follow in the future. As far as an extension to non-game apps is concerned, we are very happy to be part of the gaming industry and have no plans to broaden our focus.
Mobyaffiliates: With the mobile game market showing no signs of slowing down, and with app promotion platforms becoming ever more pivotal for gaining valuable users, AppLift certain appears to have a bright future. The company has been ahead of curve when it comes to understanding the importance of transparency when working with developers and the necessity of focusing on measuring value when it comes to user acquisition. Big thanks to Kaya and the AppLift team for letting us poke around the office for an afternoon!