Mobile ad network Tapjoy announced today that it has appointed former Disney media executive Steve Wadsworth as its new chief executive and president. Mihir Shah is stepping down from his job in those roles.

In an email to VentureBeat, a Tapjoy spokesperson said Wadsworth is the permanent CEO and he was appointed now because the board “believes the company’s growth and scale has progressed to a point where a change in leadership and management experience is best suited for Tapjoy going forward. This change is being made to realize and capture the massive opportunity available to the company.”

The rep also said Shah will not stay on the board.

Wadsworth is the former president of Disney Interactive Media Group and a current Tapjoy director. The change seems sudden, and it suggests that Shah’s departure was unexpected. We recently interviewed Shah when the company got into hot water with Apple over its use of promotional offers in web links embedded as HTML5 code in games and apps.

Wadsworth spent 17 years at Disney, where he rose to the head of the company’s digital media and gaming businesses. He ran that business for 11 years. He led the $700 million-plus acquisition of Playdom and then was replaced in his job by Playdom chief executive John Pleasants.

“Tapjoy sits in the epicenter of an incredibly exciting growth industry and is very well positioned to take advantage of future growth,” said Mark Leschly chair of  the Tapjoy board, in a statement on the news. “Tapjoy has scaled dramatically over the past two years, and we are very excited and fortunate to have someone with Steve’s management credentials and deep technology and entertainment industry expertise to lead Tapjoy through our next phase of growth.”

Behind the scenes, Tapjoy inserts ads into apps. Those ads are targeted at consumers who enjoy similar apps. If those individuals install the apps that are recommended in the ads, then the advertiser pays Tapjoy and the developer for the installation.

It works only because developers have so few good options for getting their apps in front of consumers. This business grew sales from $20 million in 2010 to more than $100 million in 2011, despite being tripped up when Apple banned incentivized downloads (which appeared to give people the motive to download apps they didn’t want to use). Still, Tapjoy is going strong, and its network of developers now has more than 100 million monthly active participants and has reached more than a billion mobile devices.

Leschly added, “Steve has had a unique opportunity to work closely with our senior management team since joining the board. He will ensure that this is a seamless transition for all of Tapjoy’s customers and employees as we continue to drive the growth and product innovation we are known for.”

And Leschly thanked Shah for “helping the company transition from its startup phase to a market leading growth company.”

Wadsworth said in a statement, ”Tapjoy is a unique and compelling company whose innovation has created a robust model for mobile app discovery and monetization, serving the needs of publishers and advertisers. I’m honored to be part of the team.”

Shah did not offer a comment. Tapjoy’s investors are J.P. Morgan Asset Management, Rho Ventures, North Bridge Venture Partners, InterWest Partners and D.E. Shaw Ventures.

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Indie developers can self-publish their own mobile games in today’s app stores, but they currently have difficulty with discovery and marketing. Selfpubd hopes to address that problem with a three-part platform that could deliver many in-kind benefits for those who participate.

Selfpubd is announcing today a strategic partnership with mobile ad network Taptica, a move that will give developers working with Selfpubd the equivalent of $2,500 in advertising if they integrate Taptica’s ad platform SDK (software development kit) into their games. Taptica is willing to grant multiple millions of dollars to game studios that take advantage of the deal.

Portland, Ore.-based Selfpubd launched its indie mobile game publishing platform in June and now handles more than 115 developers with 230 games. Those developers are seeing more than 3 million downloads a month. And soon, Selfpubd will launch its own game portal website to attract more consumers to the games it promotes.

The partnership could be appealing to developers because Taptica has deals with brand advertisers who want to target users of mobile games. With its SDK, it inserts ads into mobile games. When developers become the advertisers and want to promote their games to other mobile users, they take out ads on Taptica, which knows how to target the right audience. In this case, Taptica simply gives each participating developer the equivalent of $2,500 worth of free advertising, which directs users to the developer’s games. In an interview with GamesBeat, Selfpubd founder Andy Rosic said that Taptica isn’t handing over cash, but the promotion still has real value.

“This is the sort of deal a hit studio might command,” said Rosic. “But Selfpubd shows its commitment to Indies by negotiating a deal like this for every one of our member studios.”

Taptica’s deal will be exclusive to Selfpubd for the next year. Under the terms of Selfpubd’s platform, developers retain rights to their own creations, but they get to use the full spectrum of publishing tools, including Taptica. Rosic says that every indie game studio can benefit from the Selfpubd platform and Taptica deal. Rosic, who felt the pain of discovery problems as a mobile developer, says he started the company to redefine what it means to publish in the new app economy. The old models don’t work, but developers can publish on their own these days and retain rights to their games. What they need is help with getting noticed. Selfpubd offers a dashboard of tools for that purpose.

“The tier 1 advertisers we work with are eager for quality media sources and loyal users. Teaming up with indie content will generate a real boost to both indie studios and to our advertisers,” said Kobi Marenko, chief executive at Taptica. “You can’t get this combination somewhere else.”

Self-funded, Selfpubd has four employees and was founded earlier this year. It graduated from the YetiZen game accelerator, where the first seeds of the Taptica deal surfaced. Rivals for Selfpubd include Chillingo (owned by Electronic Arts), Gree, Ngmoco/DeNA, Zynga, and Activision Mobile.

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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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Tapjoy is back on the hot seat again.

Glu Mobile, a publicly traded mobile game company, noted in its conference call with analysts this week that it saw a drop in iOS ad revenues because Apple has extended its prohibition of incentivized ads to include what Tapjoy is now doing: Linking to external HTML5 websites that offer incentives.

We’ve asked Apple for comment and haven’t heard back.

Nicolo de Massi, the chief executive of Glu, said in the company’s earnings call, “This reduces revenue from the Tapjoy iOS channel. As a result, our expectation for Q4 are being substantially lowered to reflect these factors as well as to delay our five new titles while our president of studios completes its 60-day review.” About 13 percent of Glu’s revenue comes from Tapjoy.

As noted by TechCrunch founder and investor Michael Arrington, Tapjoy’s strategy appears to be a way to get around Apple’s review process because the HTML5 pages aren’t live when the app is submitted for review.

Tapjoy says that Arrington is full of baloney, that consumers really do want the apps, and that its business is completely legitimate.

It’s not the first time Arrington has taken aim at Tapjoy. In 2009, Arrington criticized Tapjoy (then known as Offerpal, before its merger with the mobile ad firm Tapjoy) in a widely-cited post titled “Scamville,” in which he excoriated Facebook and its partners for offering scam-like ads where users could get free virtual goods in games so long as they accepted special ads known as offers. Those offers included signing up for Netflix subscriptions, but Arrington accused Offerpal of putting scams in front of its consumers, such as getting them to sign up for mobile phone subscriptions that they didn’t realize they were signing up for.

Offerpal’s business on Facebook evaporated after that, and, after the merger with Tapjoy, the new firm went after mobile ad incentives. It built up a huge business with offers on Apple’s iOS platform, but it once again got into trouble. Apple alleged that the mobile ad deals — where a user agreed to download an app in exchange for a virtual good in an app — didn’t really reflect real consumer demand. In 2011, Apple prohibited the incentivized downloads (known as pay-per-install), and Tapjoy shifted to Android in a big way, where there were no restrictions. Tapjoy calls its incentivized downloads and non-incentivized downloads a “mobile value exchange.” Consumers gets what they want, developers gets what they want, and advertisers gets what they want.

Arrington spiced up yesterday’s post with colorful words, including “brazen consumer ripoff schemes” and “junk apps.” He said that Tapjoy “just can’t seem to find an honest way to make a buck.” As to the apps that are offered as incentivized downloads, Arrington added, “uniformly, they suck.” In conclusion, he said, “I can’t wait to see what Tapjoy does next in this ever-escalating arms race. One thing’s for sure — it’ll be very profitable. And very shady.”

We recently interviewed Mihir Shah, the CEO of Tapjoy (pictured left), and the topic of Apple didn’t come up. Shah responded with his own blog post:

I wanted to take a moment to address a recent article that is making the rounds this morning. It is not only a clear misrepresentation of what we do at Tapjoy but also, unfortunately, an attack on the integrity of our developer partners and the quality of their work.

There are a few claims in this article that require addressing head-on.

First, Tapjoy counts among our partners thousands of developers and advertisers, and we take issue with the author’s assertion that they are publishing “junk.” The Mobile Value Exchange model that is at the heart of our platform serves a viable and valuable purpose for those developers, as well as consumers and advertisers.

Second, we work diligently to ensure compliance with Apple’s TOS [Terms of Service], and each week, Apple approves hundreds of apps that integrate and leverage Tapjoy. In fact, Apple has featured a number of Tapjoy-enabled apps in the last few months. We fundamentally agree with Apple’s point of view ensuring a great user experience, and we feel that the Mobile Value Exchange and Tapjoy.com are important components of this shared vision.

Third, we continue to work with our partners to provide an engaging user experience through iOS, Android, and on mobile web via HTML5 sites. Just like thousands of other talented developers, Glu continues to be a strong partner of Tapjoy as we continue to deliver best-in-class services to our mutual consumers. In addition, platforms such as SK Planet and Gfan agree that we are accretive to their massive app stores and provide a huge value to their audiences.

Lastly, this article slights the intelligence of consumers and inaccurately characterizes a double opt-in, ad-driven model that works. The simple fact is that 110 million monthly active users and 13 million registered users on Tapjoy.com agree with the Mobile Value Exchange model. They do so because they love what we collectively provide. There’s obviously a lot of work to be done to solve the global issue of app discovery, so Tapjoy will continue to invest in this area and work tirelessly to move the mobile ecosystem forward. The bottom line is that Tapjoy offers consumers an ad-driven model to obtain premium content [that] they love, and which works efficiently for developers and brand advertisers.

Mihir Shah
CEO, Tapjoy

[Image credits: TechCrunch, Dean Takahashi]

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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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Flurry started out as a mobile analytics firm, but it has built a bunch of services for app developers around that. And now it says that its video ad network is one of its most popular new services. Video ad views across its Flurry AppCircle network soared past 100 million views in the month of August.

The San Francisco company hit this milestone a year after making AppCircle Clips video ads available on Apple’s iOS (iPad, iPhone, and iPod Touch) platform. And today, the company is also announcing that it has created AppCircle Clips on Android for both publishers and advertisers.

AppCircle Clips enables an advertiser to reach the right mobile users with TV-style trailers for brand campaigns. Advertisers can efficiently reach consumers already using certain apps and hit them with engaging video ads that are likely to appeal to them based on analytics data such as demographics, geography, device, personas, and more.

“Video has established itself as an important format for mobile advertising,” said Simon Khalaf, Flurry president and chief executive officer.  “The unprecedented success we’re seeing for in-app video advertising demonstrates how smartphone and tablet consumer behavior closely mirrors that of television viewing, where consumers accept commercials in exchange for their content experience.”

Game publisher Gaia Interactive used AppCircle to reach consumers with video ads that worked better than static banner ads. The consumers that AppCircle found for Gaia’s Monster Galaxy battle game used the application 43 percent more often and 23 percent longer per session than the average user. Monster Galaxy hit No. 15 in the games section of the iTunes App Store when it was launched in September 2011,  but it fell out of the top 100 ranks after only six days. Banner ad campaigns were ineffective. Gaia relaunched with a strategy to target new users who were more intense, hardcore players via mobile video ads. Gaia distributed the ads on Flurry’s AppCircle Clips, which reaches millions of users in Flurry’s publisher network. Users were asked to install the app after the video ran.

“Flurry AppCircle Clips is a top acquisition channel for Gaia Interactive to build high quality app audiences,” said John Dionisio, Gaia Interactive director of marketing and business development.  “AppCircle Clips campaigns deliver audiences we care about, while exceeding all user quality performance metrics we track versus our
other acquisition channels.”

Flurry also said that developers and publishers on Android can now use AppSpot to serve video ads, with eCPMs (a measure of performance for ads, dubbed effective cost per thousand) above $10. Android advertisers can now create video trailers for their Android apps and promote them on the Flurry AppCircle network to reach targeted audiences.

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Peter Farago, vice president of marketing at Flurry, said the platform  combines Flurry’s analytics with a new ad platform aimed at unlocking the full potential of the mobile app advertising space. The platform is designed to make targeted campaigns and reaching high-value consumers easier for ad agencies, direct advertisers, and ad networks.

Flurry will provide services such as ad serving and network optimization based, and advertisers will pay Flurry only when they use premium targeting to earn additional revenue. These services are tied to Flurry’s analytics data, which tracks more than 30 billion user sessions a month across 160,000 apps on more than 500 million mobile devices.

San Francisco-based Flurry says that consumers are spending 23 percent of their time in apps (vs. TV, Online, Radio and Print) but only 1 percent of advertising dollars are allocated toward mobile today. The gap exists because it isn’t easy to target the entire app-using audience. But Flurry argues that its reach and depth of data can help publishers and advertisers bridge the gap.

For example, if Nike wants to reach 18-year-old to 24-year-old women for a new shoe, their ad agency would use Flurry to buy ads, target the audience, and reach people on multiple mobile platforms using the Flurry AppSpot ad platform. Flurry uses its demographic data to target the ads at the right people and then it reports back the results about whether the users clicked on the ads or otherwise engaged with it. Because the ads hit the right demographic, they are likely to be received more effectively.

In this case, app publishes supply the inventory into which ads are served. Ad campaigns fill that inventory with ads that are targeted at particular users. Flurry’s data enables better targeting, allowing relevant ads to be shown to the right users.

“Compared to online advertising, mobile app advertising can be simpler, better and more powerful,” said Simon Khalaf, president and chief executive officer of Flurry. “In online, there are simply too many moving parts between the advertiser and the publisher, including ad servers, ad exchanges, supply side platforms, demand side platforms and data management platforms. In the app advertising world, Flurry AppSpot delivers an optimal path between advertisers and publishers, adding in ground-breaking targeting and analytics.”

Flurry’s backers include Draper Fisher Jurvetson, InterWest Partners, Union Square Ventures, Menlo Ventures, and First Round Capital.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Tapjoy and PapayaMobile are announcing a partnership to create a new social marketplace for Android mobile app developers.

The market will be one more way for developers to get their apps noticed in a sea of hundreds of thousands of competing apps. It’s another effort to address the perennial discovery problem associated with mobile app distribution.

Beijing-based PapayaMobile has a mobile social gaming network with 35 million users, while Tapjoy runs a value exchange mobile ad network. The Social Marketplace will let players discover new games and apps based on the popularity within the Papaya social network, and it will make recommendations based on what friends are playing. The market will also deliver more relevant and targeted ads, and developers can benefit from more engagement and increased monetization through the social network.

Rivals include DeNA/Ngmoco, Gree/OpenFeint, and a variety of others. Mihir Shah, chief executive of San Francisco-based Tapjoy, said that PapayaMobile’s social network has the scale and reach across the U.S. and China to make Tapjoy’s ads more targeted and engaging.

Tapjoy’s network has more than 280 million mobile users, who watch videos, subscribe to services, install apps and participate in other kinds of ads in exchange for virtual currency in their favorite apps. It is used in more than 10,000 apps.

“Tapjoy is the industry leader when it comes to ad networks that deliver proven, effective distribution and monetization,” said Si Shen, CEO and cofounder of PapayaMobile. “By teaming with Tapjoy for a Social Marketplace, we’ll be able to offer game developers the very best advertising solution.”

Tapjoy

Dille comes on board as chief marketing officer. He joins other recent hires such as Al Wood, chief financial officer, and Larry Berkin, vice president of Asia-Pacific, at Tapjoy. Dille is perhaps the biggest name of all, since he was responsible for running marketing in the critical North American market for Sony’s PlayStation brand. His appointment reflects a trend in game careers as more senior executives are leaving traditional game businesses to work at game startups such as Tapjoy.

Dille officially left Sony on March 31. He initially worked at Sony Computer Entertainment America from 1991 to 1999. He left for a stint at THQ and returned to Sony in 2006 as the Japanese company launched its PlayStation 3 game console. After March, Dille took time off to spend with his family.

“I’ve had a chance to decompress and it’s clear that so much is happening in mobile and social games,” Dille said. “And under the radar, Tapjoy has built a remarkable business with its mobile ad marketplace.”

Dille will help spread consumer awareness about Tapjoy’s mobile advertising network, which touches more than 250 million consumers. The San Francisco-based company has a monetization platform that lets game developers insert ads into the middle of their games for the iPhone or Android devices. Tapjoy fills those ad slots with all sorts of ads from its network of ad partners. They range from video ads for movies to offers, or special ad deals where users can earn something in a game by performing a task, such as signing up for a Netflix subscription. The ads work exceedingly well, Dille said.

Tapjoy also had an incentivized-install business, where it could offer users a credit for virtual items in a game if the users installed another game. Apple banned these incentivized installs in April, cutting off a profitable business for Tapjoy. Apple felt the incentivized installs were distorting its top-ranked games lists.

Tapjoy was hurting for a while. But Dille said the business has come back strong with non-incentivized promotions on the iPhone, and Tapjoy’s business is also growing strong on Android, where Google has not banned incentivized installs. Tapjoy’s ad marketplace is used in more than 10,000 apps, and it generates more than 1 million ad completions per day. Now the task is to help consumers become more aware of the Tapjoy brand, Dille said.

Dille will report to Mihir Shah, chief executive of Tapjoy. Shah said that Dille’s skills will be useful as the company expands its services into new markets. Overall, trailing 12-month revenues at Tapjoy are above $100 million. Roughly 60 percent of the business is still on the iPhone, in spite of the end of the incentivized apps.

As a reflection of that business, Tapjoy has raised $71 million since 2007 (including the Offerpal business that merged with Tapjoy). Tapjoy’s investors include J.P.Morgan Asset Management, Rho Ventures, North Bridge Venture Partners, InterWest Partners and D.E. Shaw Ventures. As for console executives moving into mobile, Dille said, “I’ve jumped into the deep end. There is so much growth in mobile. Some people look down their nose at these kinds of games compared to the consoles. But people are spending dollars in them every day, and when you add them up, it turns into big money.”