HopStop, a location app for finding directions, built a sizable audience, about 5 million monthly visitors per month, with 50 percent (and growing) in mobile. But when it came to making money off those visitors, with that valuable information of location, it was stuck. Outside of what its small five-person sales force could sell, HopStop was left with CPMs well below $1 from leading mobile ad networks.
“The mobile remnant solutions are not very attractive,” said HopStop CEO Joe Meyer of the networks. “It’s almost not worth backfilling with a lot of them. You’re getting pretty poor CPMs that lead publishers to say, should I even serve that ad?”
Meyer declined to name the networks, although he said HopStop tried them all. The CPMs, he said, were “pathetic.”
The HopStop dilemma is one facing many publishers in mobile. Even if they build valuable audiences, they find that there aren’t many good options on the advertising front. For HopStop, it didn’t make sense in the long run to maintain an ad sales and operations unit. It was, after all, a pedestrian navigation company. But outsourcing those functions to networks isn’t very palatable. HopStop is trying a third way of sorts in striking a deal to give exclusive access to its inventory to Travora, a rep firm and network focused solely on the travel market. The bet is that an endemic approach on a highly in-demand audience will push HopStop CPMs up to $10, according to Meyer.
The problem with the large-scale mobile ad networks, such as Google’s Admob, JumpTap and Millennial Media, is that they cannot get a good read on location for their ads, Meyer said. This leads to poorly targeted placements that, in his assessment, treat mobile as little more than yet another screen for an ad message.
“They’re all going after location data because that’s how they can command a premium,” he said. “It’s hard for them to get [the location data] if they’re not the service provider or not working with location services exclusively.”
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