Opera Mediaworks bought mobile video ad platform AdColony in 2014. At that time, Will Kassoy’s Los Angeles company had more than 100 employees. Now, the company has more than 800 people. Its video ad platform now creates more than a billion ad impressions per week.

And, once again, Opera Mediaworks (the division once known as AdColony), is an independent company. A consortium of Chinese companies led by China’s Qihoo 360 acquired the Opera browser for $600 million on July 28, after a deal to acquire the entire company fell through.

The remaining company, Opera Mediaworks, now is on a run-rate of $500 million in revenues a year. It consists of the former AdColony business and is now ready to carve out its own path.

I caught up with Kassoy at our GamesBeat 2016 conference this week. Here’s an edited transcript of our interview.


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AdColony's video ads create a billion impressions a week.

Above: AdColony’s video ads create a billion impressions a week.

Image Credit: AdColony

GamesBeat: What are some milestone numbers, some indications of how big you’ve become?

Kassoy: In 2011, when we launched the SDK at GDC, we were 10 people. When we sold the company in 2014, we were probably about 100, 120. Now have 800. But we integrated into a much larger organization. The difference — this is a difference versus Vungle or Unity or some of the other players in the gaming ecosystem — is that we have towering strengths in brand advertising. That’s very local. You have regional brand sales teams in the U.S., throughout all the major countries in Europe, in Asia Pacific, and Latin America. That’s difficult to build over time.

That’s part of the reason why we love being part of Opera, to have that synergy between not just promoting other app ads, but also having brand advertising that competes more with TV.

GamesBeat: What about impressions? How do you count that?

Kassoy: I remember we were touting when, in aggregate, we did more than a billion impressions at AdColony. That was after maybe two and a half years in our cycle. Now we’re doing well over a billion impressions every week. It’s been rapid growth. We announced our revenues this year. We’re on a run rate to do more than $500 million in revenues. We’re one of the few companies out there that have the scale and proven track record of success.

We’re seeing trends where the big companies are getting bigger. It’s hard to be a small company. It’s even hard for big publishers to work with lots of fragmented little companies all over the world. We have a pretty strong foothold in the top 1,000, as I mentioned, and that’s where we continue to focus.

GamesBeat: What’s the strategy as a stand-alone company again?

Will Kassoy: We’ve always focused on — a lot of it is because we have roots in publishing — how we can create some differentiation through great user experiences. We built a name for ourselves in video. We had a differentiated video product that created a faster experience, something that drove better conversions for advertisers. If you create value in that marketplace, you can continue to find a role for yourself in the ecosystem.

Our plans are to continue to grow, but without being under the shadow of a browser. Which has been holding us back a bit over the last two years. People really don’t know who we are, what we do, the role we play in the ecosystem. We’re looking forward to being a little bit more proactive in communicating what we’re doing and showing, under the hood, what we’re investing in the future.

Today we play a very strong role in video, in performance advertising, and in monetization, which is a big part in gaming and also non-gaming. But where the future is going is more exciting. There are things we’re doing to expand the platform to not just be an ad platform, but to be a platform for retention and help publishers maximize the entire life cycle for a consumer. That’s maximizing in-app purchases, cross-promotion, advertising, and then even—how do you extend retention?

Opera Mediaworks' (the former AdColony) ads are generating $500 million a year in revenue.

Above: Opera Mediaworks’ (the former AdColony) ads are generating $500 million a year in revenue.

GamesBeat: We’ve seen a lot of consolidation in the industry. The different strategies sometimes start to surface. Some companies will acquire and collect other parts of the solution and then essentially become vertical and maybe less open. Others will staunchly stay open, no matter what kind of partners they have or whatever. That part of the strategy, is that clear to you guys yet as far as what’s best for AdColony?

Kassoy: One thing that differentiates us is that we do have a big mix between, if you will, brand advertising and performance advertising. Different from the walled gardens of, say, Apple or Facebook or all the platform companies, we have a lot more transparency in terms of data and insights and sharing data back and forth that the walled gardens might not do. Investing in the things that the top — we really focus on the top 1,000 developers in the ecosystem, instead of the long tail or the mid-tail of all publishers through self-service and so forth.

We try to keep our finger on the pulse of what that top 1,000 is doing. A lot of people don’t realize that if you look at our SDK footprint in the top 1,000 apps, it’s second only to Google. That footprint is bigger than a lot of the big-name platform companies in the ecosystem. That’s one of the things that makes us unique and differentiated.

Our focus is always to be more strategic in collaborating with these top-grossing developers to drive their business forward. Whether that’s being more transparent and open with data, sharing data and insights back and forth about who their consumer is and what they’re doing, or developing new products and tools that go beyond just advertising but helps them drive longer retention into their products. These are some areas where we work with them more as a marketing platform than just an advertising platform.

GamesBeat: Who winds up being your other independent competitors?

Kassoy: We’re seeing most developers using, say, three to four SDKs in their products. It’s generally an analytics SDK, Facebook, and one or two monetization SDKs. That’s where we want to play. What’s unique about the SDK, different from the rest of the ad ecosystem, is that it provides deeper data signals. That allows us to be more targeted in our advertising and be more like a first party.

A lot of the ad ecosystem is connected server-to-server through tags and things like that, where you just don’t get the rich data signals. That’s an area where, again, we want to excel and continue to have a leadership position in providing publishers the strongest insights into their consumers and into how best to monetize them. And then we’ll invest R&D in creative experiences that are entertaining, but are great user experiences. They don’t have latency. They don’t stall. We get that it’s important to get people back into the app as quick as possible.

GamesBeat: mNectar has been talking a lot about playable ads as an area of innovation. Does that seem like it’s starting to get ready for prime time?

Kassoy: I see trends more toward immersion, whether that’s 360 video, AR, VR, getting deeper into these more immersive environments. The tricky thing with playable is that these apps are free. I get that if it’s a paid product, but for a free product, it’s not that much friction to just download an app and play the actual game. You get into issues where the HTML 5 experience that you’re creating is nowhere near as good as the actual app, the client.

That’s an area we’ll watch, but I almost think that I’d rather put the content on a pedestal through a more immersive experience, through a video, and sample that way. Then I get them to the app as soon as possible.

VR Streaming at Lillehammer

Above: VR Streaming at Lillehammer

GamesBeat: With VR, that seems to raise a lot of complicated challenges. How do you know the person’s looking at an ad? Are you able to track whereabouts they’re going in this virtual world?

Kassoy: It reminds me of some of the in-game issues that Massive and some of those guys had. They had to resort to eye tracking and other things to see if an ad’s driving awareness. What I love about mobile is, going beyond just awareness and trying to get a logo reminder — to me that’s like banner advertising. Whereas video and interactivity, if you can drive to a conversion and ultimately a high quality user who loves your product, I want to get them there as quick as possible instead of trying to re-create that experience in a virtual environment.

The more we can do to take the publisher’s content and have people experience it in the way it was intended, the better. That’s our focus. We’ll see what happens in the VR space. As the accessories to the phones really get a bigger installed base, we would obviously adapt to create video experiences using technology to get people more immersed into it, but in a way that gets them to the ultimate product rather than trying to re-create it in an ad unit.

GamesBeat's Dean Takahashi on stage.

Above: GamesBeat’s Dean Takahashi on stage.

Image Credit: GamesBeat

GamesBeat: What do you think about the cost of user acquisition? There seem to be so many parts of the industry that are accelerating because of that cost. You have influencers rising. You have live streaming. You have esports and brands and other ways to draw attention besides spending money on ads.

Kassoy: Depending on where you are in the world, we’re seeing a general trend where the cost of user acquisition is actually declining. That’s a good thing in our mind, because that means our targeting is getting better. We’re able to deliver more installs at lower prices. We’re also seeing that these next billion consumers coming into mobile are more casual nature. They might not be spending as much in-app. It’s growing and changing the mix of revenues between in-app and ad-based. We’re seeing a trend toward more ad-based business models.

We feel like we’re in a good position to capitalize on those trends with our data, our SDK, the footprint we have with video. The more the mix becomes balanced toward a heavier portion of advertising, we’re in a good position to take advantage of that.

GamesBeat: Do you have any reactions to the talks here at the conference?

Kassoy: People are getting smarter on monetization, weaving monetization into the user experience in a more organic way. We’ve never been big fans of interruptive advertising. In PC and desktop, even mobile web, you see a lot of ad tech people who are forcing an ad, either interstitial or video, and it’s a speed bump to the user experience.

We love how you can weave it more into the content experience to make it feel more integrated or “native.” We’re seeing that, whether it’s in feed-based ad units or these rewarded ad units. You’re not even just rewarding with a piece of hard or soft currency. You’re rewarding with a 10 percent power-up or a speed boost that allows you to go further into the game. We call those consumables. Those things drive longer-term retention and reward people instantly, as opposed to getting a coin that gets you 1/100 of something cool.

People are getting smarter instead of just trying all these different monetization solutions. I sometimes feel like we’re one of the last independents that are still standing. A lot of companies have come and gone. We’ve had the stability and continuity in the category and the consistency of results to continue to help the biggest developers in the ecosystem. People are looking at that and get smarter in terms of integrating in a way that balances user experience with monetization.

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