The founders of Grow Mobile are back with a new ad tech startup called Downstream.ai. Co-CEOs Brendan Lyall and A.J. Yeakel are announcing that they have raised $1.5 million in seed funding for Downstream.ai, which provides a self-serve platform for ad agencies and marketers to automatically place ads across a variety of mobile platforms.
San Francisco-based Downstream.ai is launching its beta program today. It raised the money from London Venture Partners, with participation from Olive Tree Capital, Otter Consulting, Gramercy Fund, Ride Ventures, Rising Tide, and a short list of prominent industry angels. Paul Heydon, general partner at London Venture Partners, has joined Downstream’s board. The interesting thing here is that AI is adding a fresh new wave to ad tech, which has been consolidating in the past couple of years as targeted mobile ad marketing runs its course.
“While the rest of the industry is maturing, we saw this as an opportunity to jump in. We saw that ad inventory was shifting over to programmatic (more automated) ads in a big way,” said Lyall, in an interview with VentureBeat. “But on the creative side, the ads and developers were falling short. We needed to build a better framework to put creative ads that were more relevant in front of a user. We applied AI to that.”
The idea is to give ad agencies and marketers — including those at big brands, game companies, and app makers — more control and transparency when buying mobile ads. The company wants to deliver a solution that doesn’t take months to implement or require expensive technical resources to maintain. What they’ve come up with doesn’t require coding or technical customization, and it lets customers control real-time bidding on the largest mobile ad exchanges.
Downstream.ai provides a dashboard to control programmatic advertising campaigns and improve return-on-investment (ROI).
Lyall said, “As an advertiser of games, you need to attract more users, but that is becoming increasingly competitive. You have to do a better job at user acquisition and up your game. You have to make sure you get users who are a net positive for your bottom line. You have to do that across multiple channels, not just one channel. In the past, you had to have a user acquisition manager work with each channel. We have a tool to let them manage all that data on the front end, and manage all sources programmatically.”
Yeakel said his company wants user acquisition managers to buy through a single platform in a programmatic way, rather than manually using multiple platforms to buy in an antiquated fashion.
“Game designers don’t want to spend their time adjusting the color of an ad for the best results, and the user acquisition manager doesn’t want to bug the design team for small iterations like that,” Yeakel said. “We are building solutions to optimize creative material and get feedback on it within the tool.”
The dashboard lets users access ad inventory on major ad exchanges using their own data and third-party data to target more accurately. They combine that data with automated optimization software and a dynamic bidding algorithm to get better results. Marketers can use their own creative material for campaigns or use Downstream’s AI-driven creative builder to create and deploy new versions of the ads quickly.
“You have to keep the creative material in the ads fresh and targeted,” Yeakel said.
Lyall and Yeakel sold mobile ad marketing firm Grow Mobile to Perion Network in 2014 for $42 million. They took some time off to do other things before starting Downstream.ai in 2017. Others on the team include Minglei Xu, the company’s chief technology officer, and Jiangfeng Wang, vice president of engineering. The team has four people, plus contractors.
Downstream.ai has a few customers in its closed beta test, and it is adding more now. Rivals could include Vungle, which created its own self-serve mobile ad platform. But Vungle’s focus is on its own network, while Downstream.ai is trying to work across many programmatic ad exchanges. And Downstream.ai sees Vungle as a potential supply partner.
“Downstream’s vision for the future of programmatic advertising places mobile marketers in the driver’s seat, giving them more control than ever before,” said Heydon, in a statement. “In previously developing and launching Grow Mobile, Downstream’s founders are seasoned experts in developing and delivering highly efficient and scalable advertising solutions to the mobile ecosystem.”
Downstream.ai makes money by taking a percentage of the ad spending budget. The company will expand its closed-beta test in the first quarter.