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Nikkei Business Daily September 12, 2017

Next Generation Mobile Marketing

Joanna Drake
General Partner, Core Ventures Group

In the U.S., mobile marketing is more critical than ever for consumer brands as they continue to experience rapid migration of all types of professional and personal apps. The mobile marketing space has become very crowded and most user acquisition campaigns are overly expensive and often ineffective.

One positive trend in the last couple of years is an emerging focus on leveraging massive mobile data to go beyond user downloads and to enable quality user engagement that mutually benefits consumers and mobile-focused businesses.

Liftoff, a fast growing Silicon Valley company backed by Core Ventures Group is leading the change. Liftoff started its operations in Japan in July. We had a chance to interview Liftoff Founder and CEO Mark Ellis.

Q: What inspired you to build a company that delivers a new “click to action” model?

A: In the early days of Liftoff, as we began conducting research on the app marketing industry, we learned that marketers of non-gaming apps faced challenges that were quite different from marketers of gaming apps. At the time, the entire industry, heavily driven by game publishers, was focused on acquiring installs at the lowest cost possible. For non-gaming apps, driving a large volume of app installs provided little to no value. They cared about acquiring users that would engage in specific events inside their apps.

Shopping app marketers, for example, cared about generating purchases. Ride-sharing apps like Uber wanted to acquire users who would book a ride. Dating apps wanted to acquire users who would create a profile and subscribe to the app. Hence was born our “cost per action” model, where we focus on acquiring users who do not simply install an app but go on to engage in high value events inside the app at a target cost per action, determined by the app marketer.

Q: What is the underlying technology and how does it actually work?

A: To support our cost per action approach to app marketing, we built 3 core technologies including (1) Dynamic Ads, to auto generate highly personalized mobile ads in real-time, (2) a database of over 2 billion mobile users to enable advanced user profiling and targeting, and (3) an advanced machine learning platform to optimize campaigns to a Marketer’s target cost per action.

All 3 of these core technologies working together enables Liftoff to run sophisticated app marketing campaigns that deliver personalized ads to users with the highest likelihood of completing revenue-generating events inside an app at a specific cost per action.

Q: How much data are you leveraging?

As we expanded globally over the past several years, driven by app publisher demand, and integrated with the major ad exchanges, networks and mobile measurement partners, the amount of data we leverage in making decisions about who to target and with what ad has grown exponentially. We now utilize over 130 billion data points each day including ad impressions, ad clicks, app installs, device IDs, and conversion in in-app events.

Q: We’ve seen a rapid move to subscription revenue models in the US in the last 12 months. What are the biggest implications for marketers?

Perhaps the broadest implication in moving to a subscription revenue model for an app is of course in generating a recurring revenue stream, and amortizing acquisition costs over an extended period of time.

For marketers, marketing an app with a subscription model presents additional complexity, specifically in the areas of demonstrating the value to users of why they should commit to paying a monthly fee to use an app, and streamlining the account creation and payment process.

Q: What do you anticipate to be the biggest differences in serving the Japanese market?

Since Japan was the earliest market to adopt mobile devices as a primary means of communication and commerce, Japanese marketers are amongst the most sophisticated on data analytics. Our work with several of the leading commerce and gaming companies in Japan has taught us to deliver significantly more aggregate industry and customer cohort data and process detail than is necessary in other markets.

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We place a high priority on meeting with start-ups that are referred by someone we know. If you aren’t already connected to our network, feel free to send us an email. Forgive us in advance for only responding to cold introductions that are absolutely fascinating.