HasOffers, a company offering tools to help companies track the performance of their online ads, has raised a Series A led by Accel Partners, with additional funds from RealNetworks founder Rob Glaser and Founder’s Co-op’s Chris DeVore.

HasOffers is based in Seattle and has 79 employees. It has been bootstrapped, growing on revenues without investment to date, since its founding in 2009. Fun fact: Its co-founders, Lucas and Lee Brown, are twins.

“We really didn’t need to raise money based on our current cash flow and ability to keep growing, but this partnership with Accel changes the game for us,” said Peter Hamilton, the chief executive of HasOffers, in a canned statement.

According to the press release that the company will be issuing tomorrow morning, HasOffers has two products, both delivered as a SaaS (software-as-a-service):

• White-labeled software for networks and agencies to manage their performance advertising programs.
• MobileAppTracking.com (MAT) attributes installs, in-app engagement and purchases back to ad partners (such as social networks, publishers, and mobile ad networks).

Clients for the white-labled product include Bucksense, Tapjoy, SponsorPay, Applift, PocketMedia, OfferMobi, Crobo, and Tapit.

Clients for MAT include SuperCell, HotelTonight, Spotify, LivingSocial, Electronic Arts, Square, and Yahoo!

We contacted Accel’s Rich Wong, who will be joining the board of HasOffers, for an explanation of what motivated the investment.

“In our investment thesis from Accel, we are now in a third phase in mobile advertising,” Wong told us. The first phase included “walled gardens” controlled entirely by mobile carriers. The second phase includes ad networks such as AdMob, Quattro, and others. The third phase, Wong said, is marked by the rise of real-time-bidding (RTB) networks and programmatic buying, and that’s where HasOffers fits in.

“In this phase, the ‘machines are taking over’ and more and more of the ad spend in mobile is going to shift towards a programmatic buying solution, buying across multiple traffic sources, instead of two or three primary ad networks in the previous phase,” Wong said.

The key to that working, Wong said, is having a trusted, independent third-party measurement system, so ad buyers can tell where their clicks are really coming from.

“The days of the CMO not knowing ‘which 50 percent of their advertising was wasted’ is ending,” Wong concluded.

Top photo: The HasOffers executive team. Photo courtesy HasOffers.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Word-of-mouth marketing over social platforms delivers better results in paid-app marketing than search, according to a study by AppsFlyer, a firm that tracks mobile-app marketing and monitors billions of events, such as the number of mobile app installations in a given quarter.

That means that sharing an app over social networks such as Facebook and Twitter is very effective in getting users to try out a new app, said Oren Kaniel, the chief executive of Israel-based AppsFlyer, in an interview with VentureBeat. As a result, AppsFlyer believes the cost of social campaigns will rise as advertisers leverage social channels.

AppsFlyer’s Mobile Discovery Report for the first quarter of 2013 showed that if you’re looking for high volumes of users, mobile ad networks work best. (See the chart above.) The study also found that incentivized traffic is cost effective if the return on investment (ROI) is measured properly.

“We have access to a lot of data, and we’ve broken the results out among the different mobile marketing channels,” Kaniel said.

These results are relevant to anyone who develops and markets apps in the vast app stores for mobile devices. Getting discovered remains the primary challenge for creators whose apps are just one in a million in the infinite shelf space of the digital stores. If they understand which marketing channels are most effective, they can better understand how to create their marketing campaigns, AppsFlyer says.

The apps best suited for social campaigns are games, travel, social apps, and geo-targeted apps.

The most common channels used to promote and advertise mobile apps were ad networks, app discovery platforms, cross sales, incentivized traffic (where a user is encouraged to download an app in exchange for a benefit in an existing app, such as free credits in a game), search, and social platforms. AppsFlyer compared the conversion rate (or percentage of users who installed an app), user quality (based on the number of sessions, retention, or length of play), and volume (the number of new users).

Search delivered the highest quality of users for mobile apps, but it fails in delivering quantity or high conversion rates. In this way, mobile search isn’t nearly as dominant as search on the web. The apps best suited for search campaigns are e-commerce, utilities, travel, food, and content.

Ad networks, meanwhile, deliver strong volume. More than 100 serve the mobile market, but the quality of users is lower, and conversion rates are lower. The apps best suited for ad networks are mass-market apps and games. Ad networks are expected to improve performance over time as targeting gets better.

Incentivized traffic delivers the best conversion rates, but the average user quality is the lowest. The key to these kinds of campaigns is understanding the ROI, where app marketers measure all campaign expenditures and their direct returns. Games and apps with a high virality are best for incentivized traffic campaigns.

AppsFlyer was founded in 2011 and has 10 employees. AppsFlyer’s NativeTrack platform tracks the performance of mobile-app campaigns. Rivals include AD-X, Apsalar, and HasOffers. AppsFlyer has more than 500 advertiser accounts and works with 150 integrated ad networks, discovery platforms, and other marketers.

LocalResponse’s pitch is simple, but ingenious for the ad set: it combs social media data to better target ads on mobile devices and desktops. That means more interesting ads for you, and hopefully better conversions for advertisers (especially those struggling to figure out how to make mobile ads work).

The social focus seems to be paying off for the company, as it announced today that its first quarter revenues increased 716 percent from last year. That’s particularly notable, since its revenues for January 2012 ended up equaling its sales for all of 2011.

“There’s been this hunt for [ad] inventory that performs better and is more targeted to the end user,” said Nihal Mehta, LocalResponse’s chief executive and co-founder, in an interview with VentureBeat. “I think we are one of the few ad networks that actually really perform.”

Mehta laid out three big reasons why the company is performing so well: More brands are shifting their ad spend to digital (he predicts 2013 will be the biggest ever for digital ads); the economy is on the rebound and brands are realizing consumers are ready to spend again; and finally, consumers are more social than ever, which gives LocalResponse plenty of data when it comes to targeting.

“We make ads more relevant and more contextual through these social signals,” Mehta said. “If you tweet ‘I’m hungry,’ you could see a banner ad for Pizza Hut on your phone. If you check-in to Wal-Mart on Foursquare, you could see an ad for Target the next time you go to CNN.com.”

The company’s strong ad performance has attracted some big clients like State Farm and Best Buy, 19 percent of which are Fortune 100 companies. It also announced today that it’s opening an office in Los Angeles. In an ad campaign using LocalResponse’s Direct Intent Targeting, L’Oreal saw a 0.19 percent click-through rate — ten-times the typical click-through rate of around 0.02 percent.

LocalResponse competes with 33Across and SalesForce’s Marketing Cloud (built out of the remains from Buddy Media), but Mehta tells me it has built something truly unique. The company has upgraded its infrastructure to handle 10 billion social media signals a month (which is almost the same as Twitter’s monthly usage), and it’s also natural language processing algorithms to determine intent from social data.

Mehta felt particularly vindicated in LocalResponse’s social focus after hearing about Foursquare’s potential plans to resell check-in data to advertisers. That’s something he predicted would be huge two years ago.

three words: check-in. retargeting. kaboom.—
nihal mehta (@nihalmehta) June 16, 2011

LocalResponse’s technology enables ad targeting to carry over from mobile to desktops, but the company isn’t particularly focused on cross-platform targeting yet. Mehta revealed that the company is eventually planning to take advantage of your social media identity for deeper cross-platform capabilities eventually.

Since the company is so focused on ad targeting, I asked Mehta how LocalResponse could take advantage of something like Google Glass.

“Glass for us won’t be an ad interface, but it could be a data signal,” he said. For example, it could take advantage of the fact that you’re taking a lot of pictures of a particular place or product, or simply spending a lot of time looking at something. “We want to stay laser-focused on social signals. But I think it’s cool, I think it will have as much of an impact as the iPod had in the music industry and the iPhone had in the phone industry.”

LocalResponse was founded in 2010 and has received around $8 million in funding.

Facebook might not be diving into the external advertising business as quickly as people hoped. The company is rolling back a series of tests involving Facebook Ads appearing on other mobile ad networks.

A spokesperson for Facebook told VentureBeat in an email, “We are pausing our mobile ads test off of Facebook. While the results we have seen and the feedback from partners has been positive, our focus is on scaling ads in mobile news feed before ads off of Facebook. We have learned a lot from this test that will be useful in the future.”

Facebook has a lot of advertising products on its plate with Sponsored Stories, ads in its own news feed, Facebook Ads, a test on Zynga.com, and probably more. The company might be backburner-ing the product while it prepares other technology, with the intention of returning to it.

Shareholders might not be happy about the change. An external advertising network that takes advantage of the wealth of data Facebook has about its users was a promising revenue generator. Rumors recently circulated that the company was teaming up with Microsoft’s Atlas Solutions to build an external network. The Facebook spokesperson declined to comment on the partnership, saying Facebook does not comment on rumors.

As mentioned, the company also experimented with ads on social gaming company Zynga.com. There, the ads appeared in the lower corner, and show which of your friends have also liked a game you are currently viewing. It seems like the Zynga tests are not yet being shut down, which suggests Facebook isn’t giving up.

hat tip All Things D, Advertising image via Shutterstock

Microsoft’s Internet Explorer can track your mouse movements anywhere on the screen, even when minimized. And Microsoft, which was informed of the massive potential security hole over two months ago, has no plans to fix it. Which means that as you explore the web, the web can explore you right back.

And this vulnerability is already being exploited by two advertising companies.

Spider.io, the ad analytics company that can tell if your site visitors are real or dream of electric sheep, found the vulnerability months ago — and notified Microsoft on October 1. The security vulnerability allows any display ad on any site to access your mouse movements — you do not have to install anything, agree to anything, or even be visiting some of the seedier alleyways of the web:

“An attacker can get access to your mouse movements simply by buying a display ad slot on any webpage you visit,” Spider.io’s Nick Johnson posted on Seclists.org, a security-related bug-tracking site. “This is not restricted to lowbrow porn and file-sharing sites. Through today’s ad exchanges, any site from YouTube to the New York Times is a possible attack vector.”

Source: Spider.io

IE security vulnerability demonstration

The vulnerability in IE versions 6-10 allows hackers to see what your mouse is doing on-screen … which could include typing personal information such as credit card numbers and passwords into virtual on-screen keyboards, a particularly timely security hole in the era of Windows 8 and its emphasis on touch and on-screen interactions.

“Indeed, the vulnerability is already being exploited by at least two display ad analytics companies across billions of webpage impressions each month,” Johnson added to the bug report. “As long as the page with the exploitative advertiser’s ad stays open—even if you push the page to a background tab or, indeed, even if you minimize Internet Explorer—your mouse cursor can be tracked across your entire display.”

If you’re using IE on a PC and want to test this, Spider.io created a live demonstration which you can use to observer the vulnerability in action. The company also created a game, “Steal from IE Users,” in which Spider.io is challenging more technically-oriented users to decipher mouse tracks to uncover 12 credit card numbers, telephone numbers, passwords, and email addresses.

One thing that is not yet clear is whether the vulnerability affects just the PC version of Internet Explorer or tablet versions — as in Surface — which would be even more likely to use virtual keyboards. I have talked to Spider.io, and will update this post as the company releases any more information.

VentureBeat has contacted Microsoft for a statement or comment and will update this story as the companyresponds.

photo credit: moiles via photopin cc

Facebook may be turning to its longtime pal Microsoft to complete its plan to create an external advertising network. Reports peg the social network as expressing serious interest in acquiring Microsoft’s Atlas Solutions.

Atlas Solutions is an ad platform that Microsoft picked up in 2007 as part of its acquisition of aQuantive for $6 billion. Microsoft is looking to offload the property, and Facebook appears to be the leading candidate for it, according to multiple sources cited in separate reports from AllThingsD and Business Insider.

When reached for comment, a spokesperson said Facebook doesn’t comment on rumors or speculation.

Should Facebook get its hands on the ad-serving technology, the social network would be in a prime position to release an external ad network, as has been rumored, to serve its ads on third-party properties. The development would certainly bolster Facebook’s appeal to ad buyers wanting to connect their display units to Facebook’s expansive people database. It would also make Facebook a more threatening challenger to Google.

Sign photo via Shutterstock

In the past month, what app makers have to spend to get the attention of Apple device users has risen out of control. That’s a tough fact of life that could make survival hard in the Darwinian mobile app ecosystem. Solving this problem is going to require a lot of innovation and clear thinking. And if it isn’t solved, we’re going to see a number of mobile app companies start to die. If Apple and others in the ecosystem don’t handle it right, it could be a bloodbath for developers.

We talked a lot about the consequences of the rising cost of user acquisition at our VentureBeat Mobile Summit 2012 this week at Cavallo Point in Sausalito. Our three session chairs: Gabriel Leydon, chief executive of Machine Zone; Maria Alegre, CEO of Chartboost; and Chris Akhavan (pictured top right), vice president and general manager of strategic partnerships at Tapjoy, drove the discussion about solutions and strategies to deal with the rising costs.

This problem applies to free-to-play games, where companies have to spend money on marketing and advertising to get new users. If they spend more on acquiring users than the lifetime value of those users in terms of future revenues, then the companies will start losing money. The costs have been steadily rising, but the entry of Gree, which pledged to spend $50 million on mobile marketing in the U.S., has pushed those costs over the top. Costs will only get worse this year as companies such as Zynga, Electronic Arts, Gameloft, DeNA, Perfect World, and Tencent battle for mobile market share.

A year ago, the costs were under control because developers like Tapjoy were using low-cost incentivized installs, which rewarded users with virtual goodies for downloading other apps. But Apple shut that down because it led to manipulation of the top 25 charts. Add to that Apple’s crackdown in February on bot-driven third-party marketing services (because they also led to chart manipulation), and costs have trended upward.

Some of the tips are kind of random, and they come from people who have had deep experience in this young market. For instance, it pays to release your app on a Thursday since Apple features apps that appear on that day. Getting featured on Apple’s store is perhaps the best way to get discovered without having to pay anybody a lot of money.

First and foremost, the best way to control your user acquisition costs is to have a great app. Great apps spread naturally via word of mouth, and they are more engaging and easier to monetize, Leydon said. A developer such as Epic Games’ Chair Entertainment has set itself apart by creating the Infinity Blade series of games with outstanding 3D graphics. Chair could keep going down that road since mobile devices such as the new iPad are getting better and better. The foundation for high-quality 3D games is in place, with fast processors, great displays, and tools such as Unity 3D. But better graphics is also a dangerous road that led the console game makers to create teams of 100 people or more working for two years at a time.

With a great game, it isn’t so hard to improve your lifetime value and generate organic downloads. If your lifetime value is high, you don’t care as much about your cost-per-install (CPI) or the cost of each new user.

“CPI is a relative number and should be measured in relation to the LTV of your product,” said Adam Flanders, senior vice president of sales and marketing at Glu Mobile. “If CPI is getting too expensive, the focus needs to move to engagement, retention, and monetization of your product to drive LTV up above CPI costs.”

It is possible, and quite scary, that even great apps could get lost in the App Store, which has a total of 598,154 active apps. Sometimes, great apps need a boost to get noticed. And it helps to have a game that is designed for monetization.

Usually, game designers focus only on making a high-quality app. But it can help to have a user acquisition expert involved in the design of a mobile game. That expert can help design the funnel of activities that lead directly from trying out the game to paying real money for digital bits, or virtual goods, that don’t exist in the real world. And so that expert isn’t flying blind, your app has to be instrumented with analytics, said Greg Canessa, vice president of mobile at Activision Blizzard.

The solutions include moving your apps to Android, where the cost of user acquisition has actually been dropping. Tapjoy took its incentivized installs to Android as well. And while Android’s user count has been on a tear, monetization has been weaker than on iOS. So while Android represents a great release valve on costs, it isn’t a panacea.

Another way developers can bring down costs and bring up installs is through services like FreeAppADay or Iddiction’s App-o-Day. FreeAppADay gets millions of users coming to its site to download an app that has been made free for a day. Iddiction’s Andrej Nabergoj, (pictured middle), argues that a curated list of the best apps will be very appealing to a lot of users. Chartboost, meanwhile, lets developers set up their own networks where they cross-promote games of other developers in a kind of barter system. Alegre said this kind of network can disrupt the ad networks that charge money for this kind of service. FreeMyApps is another app discovery service with its own digital rewards system.

Akhavan said that more intelligent targeting is also essential. But it could get harder now that Apple is doing away with user identities known as UDIDs. That makes it harder to know who your user is and thus to target that user with relevant advertising. There are other ways to target users. Groups are forming to create new identification systems. And apps could access a user’s address book, but they walk a delicate line on privacy when they do so. With the UDID in flux, the state of targeting ads is in flux.

One strategy app makers could use is to publish games for other developers or promote the games of other developers within their own apps. That turns the problem around and helps developers take advantage of high CPIs. Another strategy is to try everything, using multiple promotional networks and going to the trouble of analyzing the return on investment for each one of them. If someone creates an analytics dashboard for managing that activity across networks, it would be quite useful to developers.

Of course, Apple could do a few things to ease the problem, too. It could get rid of its top downloads chart and switch to an engagement chart that ranks apps by the number of daily active users. Those are the apps that have users coming back over and over. Of course, you might see something like Draw Something or Facebook dominate that list. Improving how it surfaces and promotes new content through something better than Genius or Game Center is a must. Apple bought app search firm Chomp, and most observers are expecting that to result in improved, low-cost ways to surface good apps.

In the absence of action from Apple, the middle-layer companies could make a difference. Gree and DeNA have built mobile social networks in Japan that have created a lot of virality and improved engagement among users. They’re launching networks in the U.S. that are attempting to do the same thing, although it may be a while before they really work.

Facebook Mobile, which now has hundreds of millions of users, has come on strong on the social front, enabling users to discover new mobile apps based on the activities of their friends. A lot of that may be through what some users consider to be spam. Just a month ago, Leydon wouldn’t have considered putting Facebook Connect into his games. But Draw Something grew to more than 50 million downloads in less than two months, thanks in no small part to the virality of Facebook Mobile. Twitter is also going to make a lot of impact in mobile promotions this year.

The rising cost of user acquisition is a tough problem. It takes the whole ecosystem to solve it. But even at this point in the growth of the App Store, Leydon says there has never been a better time to make mobile games and apps.

GamesBeat 2012 is VentureBeat’s fourth annual conference on disruption in the video game market. This year we’re calling on speakers from the hottest mobile, social, PC, and console companies to debate new ways to stay on pace with changing consumer tastes and platforms. Join 500+ execs, investors, analysts, entrepreneurs, and press as we explore the gaming industry’s latest trends and newest monetization opportunities. The event takes place July 10-11 in San Francisco, and you can get your early-bird tickets here.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Apple has altered the terms of its iAd agreements in a way that both developers and potential deep-pocket advertisers should find favorable, an Apple spokesperson told VentureBeat today.

iAd is Apple’s mobile advertising network. It places ad spots into iOS apps to generate revenue for the app’s developer.

Apple launched iAd back in June 2010, initially offering developers a 60 percent cut of the ad revenue generated. The company also initially required would-be advertisers to spend a minimum of $1 million per campaign, which was done to ensure that ads on the network were both high quality as well as lucrative for all parties involved. (In other words, no teeth whitening advertisements or click scams.)

Unfortunately for Apple, advertisers weren’t biting, as VentureBeat reported in December.

Yesterday, however, Apple announced new terms for iAd, which included giving developers an additional 10 percent cut of the revenue and lowering the minimum cost of an iAd campaign to $100,000 for potential advertisers, the company has confirmed. Apple said it listened to industry feedback from ad agencies, brands, and developers when restructuring the new terms.

The changes will go into effect April 1, 2012.

Apple said it’s hopeful the revised iAd terms will spark a renewed interest from developers. The new 70/30 percent revenue split Apple is offering is in line with the industry standards, so there’s a good chance more developers will be willing to deploy the company’s ad network on to their iOS apps.

Also, a greater number of advertisers are likely to do business with iAd now that the minimum commitment for a campaign is significantly lower.

We’re guessing the $100,000 minimum is still higher than many other competing mobile ad networks in terms of barrier to entry. However, Apple is attempting to push iAds as a better service and product much in the same way people feel justified in spending a little more money on Apple computers.

With more than 550,000 apps on the App Store and 315 million iOS devices sold, the iAds audience should catch the attention of potential advertisers.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Keeping up with our theme from yesterday’s post about how frictionless it has become for users to give unfamiliar apps broad and permanent access to their data, we stumbled on this interesting video about the personal information people unwittingly share with their mobile phone carriers.

The video comes from Michael Ringley, a graphic designer living in San Francisco. It tracks the life of an MMS message, 28,000 of which are sent every second, and shows how the average user will have 736 pieces of personal data collected every day. That includes details like your number, who you’re calling, the location, date and time, the duration, and the amount of data transmitted.

Different service providers retain this data for different durations. Verizon holds onto it for twelve months, for example, while AT&T keeps it for a staggering 84 months. Ringley points out that most people will have more than a million pieces of information stored by their providers spanning across an average of nearly four years.

Looking through the glass darkly, Ringley points out this makes customers unwitting participants in a vast case, with their data being sold to the highest bidder, most often to ad networks who can serve targeted ads. Check out the full video below.

h/t Brianpicker

VentureBeat is holding its second annual Mobile Summit this April 2-3 in Sausalito, Calif. The invitation-only event will debate the five key business and technology challenges facing the mobile industry today, and participants — 180 mobile executives, investors, and policymakers — will develop concrete, actionable solutions that will shape the future of the mobile industry. You can find out more at our Mobile Summit site.

For the scope of this article, I am leaving all of the commentary on SOPA, PIPA, ACTA, and such aside for others much more well-versed than I to discuss.

A lot of people have been asking me the same question lately: Just how do file-sharing sites like MegaUpload — recently taken down by an international collection of law enforcement — make hundreds of millions of dollars a year and fund lottery-winner style lifestyles that include mansions and private jets?

It’s actually pretty straightforward. These sites use the same techniques as legitimate Web sites: search, social media, ad networks, and online payment processors.

Sites that feature links to illegal videos optimize for the keyword “links,” and users that seek such videos have learned to search for “links.” Generally, providers of legal content are not trying to land in searches for links; they are trying to land in searches for the word “videos.” So searching Google for a popular TV show such as NCIS followed by the words “free links” returns sites that feature links to pirated copies of the TV show.
Clicking on one of these Google links, such as TV-Links.com, returns a well-designed Web page featuring advertising from the likes of American Express and Hertz via retargeting ad networks such as Chango.

The page also features links to the latest NCIS episodes that are illegally hosted on download sites. Each link has a rating so that visitors will know when a file is no longer available due to a DCMA takedown. As there are numerous links available on numerous download sites, there is generally always an illegal copy available for viewing. It’s technically legal to link to illegally hosted copyrighted content, so these types of sites are seemingly doing nothing wrong.

Like many profit-oriented Web sites, clicking on one of these links actually takes you to a secondary page so that the site can generate an additional page view.
Clicking on a link sends the user to file-sharing sites such as VideoWeed.com that allow streaming video of hosted files, including retargeted ad networks ads from advertisers such as Virgin America.

After watching a set amount of video, users are incentivized to pay to watch more using their credit cards, processed by payment networks such as Skrill. You’re also offered the option to earn points towards viewing videos by accepting “offers,” such as a Netflix trial subscription.

If this all looks familiar and resembles so many media sites you come across, they’ve succeeded. That’s the intention.

Peter Yared is the CTO of CBS Interactive and has founded four e-commerce and marketing infrastructure companies that were acquired by Sun, VMware, Webtrends and TigerLogic. You can follow him at@peteryared.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Last week Symantec reported 13 potentially malware-carrying Android applications, that it said may make up a family of botnets. Mobile security firm Lookout Mobile, however, is now saying the apps are just an advertising network.

“We disagree with the assessment that this is malware, although we do believe that the Apperhand SDK (Android.Counterclank) is an aggressive form of ad network and should be taken seriously,” said Lookout Mobile in a blog post.

On Friday, Symantec found a number of gaming and explicit-content applications that it claimed was from the the Android.Counterclank family. Android.Counterclank bares a resemblance to Android.Tonclank, which has been defined as a botnet string. Botnets steal information from your devices and then use them to infect and control other devices in comes in contact with. At the time, however, Lookout Mobile did not agree and said while it wasn’t sure what these applications were, they were not malicious as Symantec had suggested.

“Malware is defined as software that is designed to engage in malicious behavior on a device,” Lookout said, “Apperhand doesn’t appear to be malicious, and at this point in our investigation, this is an aggressive form of an ad network – not malware.”

It’s hard to tell the different between spam and the real thing. Sometimes spam can be malicious, with links that download software to your device, or steal your personal information. Some spam, however, exists only as an annoyance. It interrupts your activities, makes you pay attention to something unwanted, and can sometimes go over the top in the ways it gets your attention. That’s exactly what Lookout Mobile is defining this string of applications as: aggressive advertising.

Apperhand skates on the line of what is an accepted intrusion from an advertisement. The applications do identify your device in its servers, but it does not collect other data. It also able to send push notifications to your phone, what some call the “pop-up window of mobile.” These are annoying because, like a pop-up, they really do disturb your activity and force you to take an action. Regular advertisements usually sit at the bottom or top of an application and does not interrupt the application itself.

It is also capable of downloading an icon to your mobile desktop, which is where Apperhand skates much closer to the line. According to Lookout, this icon leads to a web search tool, which only provides safe content. It is still capable of downloading unwanted content to your phone, however, which is a form of spam. Lastly, Apperhand can download bookmarks to your mobile browser, which is over the line for Lookout. Browser bookmarks and toolbars in PCs can be very dangerous, and act as an easy gateway for malware. It seems, however, that this is not the use case for Apperhand, though it should be watched.

Both Symantec and Lookout are continuing research into these applications, especially as previous forms of Apperhand were labeled as dangerous. Some of the apps identified by Symantec have been taken down from the Android app store already, but Lookout warns that this may be for other reasons such as copyright infringement.

Spam photo via Shutterstock

The new ad platform, dubbed Style as a Service, is a joint venture between StyleCaster and ad space monitoring and brokering service MediaMath and seeks to help fashion, beauty and consumer brands with ad advice and placement. MediaMath gives access to the inventory of publishers like Rodale and the New York Times, while StyleCaster uses its knowledge of branding to act as an advisor for where to place the ads.

“With Style as a Service, brands no longer have to sacrifice scale for highly-integrated, strategic media buys,” David Goldberg, president and co-founder of StyleCaster, told VentureBeat via e-mail. “We can give them both, using MediaMath as the pipeline to inventory across any publishing platform and property layered with proprietary user data for rich targeting.”

StyleCaster has done alpha testing on Style as a Service throughout 2011 with various fashion and beauty brands. One campaign StyleCaster likes to point to that shows off its expertise is the Diet Coke “Stay Extraordinary” campaign. The company also has worked with H&M on branded editorial content for the 2011 holiday season.

At present, StyleCaster.com and its sister site, BeautyHigh.com, attract more than 2 million unique visitors per month. Style as a Service will use user data from the StyleCaster network to find out which publishing properties will be most effective for the brand’s target audience.

“What makes SaaS unique is that we utilize our proprietary data to determine what inventory is most valuable to our brand partners and project which marketing assets spark more consumer engagement, all within an environment that is 100% brand safe,” Goldberg said.

The Style as a Service platform will compete with Condé Nast’s newly launched private ad exchange, which is powered by Google’s Admeld. Goldberg said StyleCaster’s solution is superior because it offers user data to better inform where ads should be placed.

New York-based StyleCaster was founded in 2009 and has raised a total of $5.5 million in funding. Its latest funding round came from the likes of Zynga chief mobile officer David Ko and former MySpace CEO Owen Van Natta.

Founded by former executives from NASA, Yahoo! and DoubleClick, Rocket Fuel uses social, behavioral, contextual, geographical, and search data to target display advertisements to customers. The company says it uses technologies such as artificial intelligence, machine learning, and statistics to figure out the best placement for advertisements.

According to chief executive George John, several other ad optimizers look at user behavior, but Rocket Fuel looks at behavior, context, geography, demographics, and more. The service also provides companies immediate feedback on performance.

Currently the company has a customer base of more than 300 major global brands, including eight of the top 10 AdAge Leading National Advertisers and eight of the top 10 Interbrand Most Valuable Brands.

The online ad market is popular right now, with ad optimization companies Legolas Media and TidalTV both raising money within the past month. Rocket Fuel’s latest round of investment values the company at $160 million.

The funding was led by Northgate Capital and also included participation by existing Rocket Fuel investors Mohr Davidow Ventures, Labrador Capital Fund, Nokia Growth Partners and Wilson Sonsini Goodrich & Rosati.

Founded in 2009, Rocket Fuel has over 90 employees. The new round brings Rocket Fuel’s total funding to $26.6 million.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

When mobile ad network Moolah Media came out of stealth mode in December, it placed a big emphasis on its pay-per-performance model, where advertisers pay for actions rather than impressions. The San Francisco startup is taking that model even further today with real-time call reporting.

Phone calls are an obvious ways to track the success of a mobile ad — if the consumer sees an ad on their phone for a product or a service they like, it’s easy for them to just call that number right away. In fact, the company says its ads are already generating 250,000 paid leads in the form of phone calls each month.

Now, Moolah Media is working with call center partners to track data about those calls, including duration, duplicate calls vs. unique calls, and call answer rates.

Of course, this isn’t the only call tracking system out there, but chief executive Shawn Scheuer outlined some of the differences for me via email:

The difference is that this is fully integrated into a platform specifically designed for mobile advertising – not a stand alone phone call tracking system that is being used by mobile as an afterthought. There is a lot more than just tracking calls going on, and it includes optimization. For example, we show click-to-call offers to iPhone users but don’t show click-to-call offers when someone visits from an iPad or iPod Touch (because they can not make calls). Instead, they are given simple forms to complete.

In addition, many offers have multiple aspects to them. They may pay out something for completing a form on the first page, and then pay out more for proceeding to a click-to-call offer. By having the system in house and fully integrated, we can create and track these campaigns easily.

There’s a cost difference too. If an advertiser uses a separate call tracking service like RingRevenue, Scheuer said, it costs 4 to 5 cents per minute, which can end up eating 20 to 25 percent of the revenue from an advertising campaign.

Moolah Media is self-funded.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Android revenue has exceeded iPhone-only revenue on the mobile ad company Millennial Media’s network, according to its September “Mobile Mix” report.

Android’s revenue overtaking was bound to happen: Its ad requests grew 26 percent since the previous month, and a whopping 1,283 percent since January. Android has remained the second largest OS on Millennial’s network since July, and grew 2 percent since August to account for a 29 percent share of impressions on the ad network. Apple’s iPhone operating system remained in the lead with a 46 percent share of Millennial’s network. Apple ad requests increased 10 percent month-over-month, and iPad ad requests grew 63 percent.

Research in Motion’s ad requests also continue to grow — they’ve jumped 16 percent since August, and 143 percent since January. Despite its lack of killer devices and the lukewarm reception of its latest flagship device, the BlackBerry Torch, RIM is definitely still a major presence on Millennial’s ad network. It’s the fourth largest device manufacturer with a 13 percent share, and the BlackBerry Curve is the third most popular phone on the network with an 8 percent share.

Looking solely at devices, Apple also maintained its lead as the largest manufacturer with a 30 percent share of the network. Motorola overtook Samsung as the second largest manufacturer with a 15.28 percent share, compared to Samsung’s 14.1 percent stake. Millennial attributes the popularity of the Motorola Droid as a prime reason for the jump (those numbers may also include the recently released Droid 2). Sony Ericsson jumped up two spots to the number eight position thanks to its Xperia X10 Android phone — a surprise since that device runs a very old version of Android.

Millennial also notes that feature phones saw the sharpest decrease among mobile device types, dropping 4 percent to 29 percent. It could potentially signal a trend of users replacing feature phones with smartphones, according to the company. That reasoning seems sound, particularly given that overall smartphone impression shares also increased 7 percent to make up 58 percent of Millennial’s network.

(Disclosure: NetShelter sells some of VentureBeat’s advertising.)

The San Francisco company says its network now includes more than 200 sites in mobile, IT, and consumer electronics, including MacRumors, SlashGear, and CrackBerry. The network reached 133 million unique visitors in the month of August, according to numbers supplied by the company. But cofounder and chief executive Peyman Nilforoush said the most important thing about those sites isn’t the number of eyeballs they draw — it’s the fact that they’re highly influential in their particular product area, making their readers a good target for compelling, customized advertising campaigns.

This focus on influencers makes NetShelter a valuable partner, Nilforoush said, as brand marketers increasingly look for data beyond the number of ad clicks to see “How do I impact my brand? How do I create something that’s going to make an impression?” And that has kept NetShelter growing, with a 75 percent increase in revenue between 2009 and 2008.

The new funding was led by Rho Ventures, with participation by existing investors Rho Canada and JLA Ventures.

Nilforoush said the money will be used to launch a new set of tools for publishers and marketers that should use the Netshelter’s data about “influencer buying behavior” to create ad campaigns that are even more effective at promoting brands. It will also be used to fund NetShelter’s international expansion.

The company was founded as a Web hosting provider by Peyman Nilforoush and his brother Pirouz in 1999, but it didn’t launch its ad network until 2006. NetShelter has now raised a total of $27.6 million.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

One of the mobile developers questioned by the Federal Trade Commission about Google’s agreement to buy ad network AdMob has stepped up to defend the search giant’s deal.

Wertago, which built a nightlife app for both the iPhone and Android devices, said that the mobile advertising industry was evolving so rapidly that it would be hard to consider Google’s acquisition a monopolistic move. They added that the agency was ill-equipped to understand the impact of its decision on the market.

“There is no way the FTC knows enough to support a decision to block the deal. The staff members we spoke to were not particularly knowledgeable about the mobile ad space they are considering interfering in …,” the company said. “We think the investigation itself shows how presumptuous and biased toward action (and hubris?) regulators are, and how self-destructive it is for the technology sector to embrace the idea that government should have the power to approve or disapprove mergers, acquisitions, and other private economic transactions.”

The FTC reached out to Wertago as part of an effort to solicit thoughts from developers who earn an income from mobile advertising revenue. While the company won the Android Developer Challenge in 2008, it is independent from Google.

Google agreed to buy AdMob for $750 million last November, and the deal still hasn’t gone through. Meanwhile, Google’s competitor Apple scooped up Quattro Wireless two months later and has moved forward with an iAd mobile advertising service.

We’ve heard that Google’s mobile guru and vice president of engineering Vic Gundotra has given several hours’ worth of testimony before government regulators, while AllThingsD reported that action is likely to come next week through a preliminary injunction to stop the transaction due to antitrust concerns. AllThingsD noted that AdMob founder Omar Hamoui has been back and forth to the East Coast about a half-dozen times and has been trying to make a case for the acquisition before the FTC. The ongoing inquiry has hobbled the company’s ability to recruit talent, because it’s unclear how it should compensate employees.

Here’s a longer excerpt from Wertago’s team, which includes co-founders Kelvin Cheung and Robert Sarvis:

“The FTC staff members we talked to asked some good questions, but not as many as you would want them to, and none that really showed a deep level of understanding of how competition works or a nuanced view of the competitive landscape. We were taken aback at how the fate of this transaction might hinge upon the views of people who clearly know much less than they think they know, about an industry they think they can surgically regulate. The more competitive an industry is, the more perfect a regulator’s knowledge must be to justify preempting a deal as anti-competitive. Here, the regulator’s knowledge seems rather, to be blunt, shallow, while the industry as a whole and the market itself (at pretty much every level of granularity) is very competitive.

Indeed, the internet and mobile technology sectors right now are perhaps the most (or among the most) competitive and fast-moving industries EVER TO EXIST. The web and mobile spaces have remarkably low barriers to entry. That’s why there are so many people making a living, or supplementing their income, with small-business websites and now apps, and why a college student could create five short years ago what has become the most important social network in the world. And that’s why so many apps have been developed on the iPhone and Android platforms in just two to three years of their existence.

The advertising space is a part of that highly competitive, low-barriers-to-entry, fast-moving industry. Just because Google dominates does not mean the web and mobile ad space is not competitive. And just because Google buys up the competition doesn’t make the industry less competitive. Just imagine, as a thought experiment, what would happen if Google explicitly stated that it would buy up every start-up ad network that reached some minimum level of ad revenue. The FTC might think that’s presumptively anti-competitive, but we’re not sure that’s necessarily correct. The incentive might spur more entrants into the ad network business, just as the ADC prize money incentivized us to create the great nightlife app that is Wertago. As we pointed out to the FTC staff members we spoke to, many ad networks likely start out tacitly HOPING to one day be bought out by Google, just as app developers tacitly hope to be bought out by this or that category-dominant player. Blocking the AdMob deal could actually remove one (very lucrative) exit possibility and thereby effectively reduce the returns on the risky enterprise of starting a business. As a result, blocking the deal could actually REDUCE incentives to compete in the ad network space.

Without a crystal ball, the FTC is simply in no position to predict with any confidence what the acquisition will do to app developers, advertisers, and potential ad network market entrants.”

Don’t miss MobileBeat 2010, VentureBeat’s conference on the future of mobile. The theme: “The year of the superphone and who will profit.” Now expanded to two days, MobileBeat 2010 will take place on July 12-13 at The Palace Hotel in San Francisco. Early-bird pricing is available until May 15. For complete conference details, or to apply for the MobileBeat Startup Competition, click here.