Monetizing Premium Social App Ad Inventory and Scaling a Capital-Efficient Business: appssavvy CEO Chris Cunningham (Part 6)

Sramana: How do you price that model ? How do you sell an activity to an advertiser?

Chris Cunningham: We actually don’t sell an activity to an advertiser. We sell them an audience. Our ad is triggered by activity.

Sramana: Has that changed the pricing model? Would you give me an example?

Chris Cunningham: Six years ago, the world of video was struggling to figure out how to get video on the Internet. Advertisers tried 30-second spots, 60-second spots, post roll and pre-roll. Ultimately, companies like Tremor verticalized the opportunity to buy a lot of video through a single buy. When you do that, the money comes next.

The next evolution of that was mobile display. That is what AdMob and Quattro were able to do. They aggregated and standardized ad placement within a smart phone. Billions of dollars followed into the marketplace. Tremor and AdMob were not selling anything other than the ability to reach an audience. We are saying the exact same thing. We have a huge audience. The companies that existed before us did not provide the most effective way to reach those audiences. Our platform allows you to reach those audiences the same way.

Our pricing model is simple. We have sold on the CPM since the beginning of the company. It is the most blue chip, premium, and accepted manner in the eyes of agencies. This business is predicated on  creating premium. Other models have come and gone. We do not believe in cost per view. We do not believe in incentivized ad placement. We believe in placement that is so valuable that you are willing to pay for those dollars.

We have always remained and held the line on our pricing model. Regardless of the pressures we faced from the marketplace, our board or from advertisers to go cheaper, we never allowed it to happen. Once you give something for cheap you have just deteriorated the perceived value of that brand. Here at appssavvy we had created a premium perception and value on what we sell as well as any other company in the world.

Sramana: What was your financing philosophy for appssavvy?

Chris Cunningham: I always recommend raising as little as possible and showing as much traction as possible before raising money. It blows my mind that there is so much celebration in the startup industry around the massive amounts of dollars that are raised.

Sramana: When that happens, I am disgusted.

Chris Cunningham: We share the same view, then. I have never understood how companies can raise $180 million and have nothing to show for it. Companies get too bloated with capital. They lose their discipline. The best entrepreneurs are the ones who are worried about how to get dinner tomorrow night.

This segment is part 6 in the series : Monetizing Premium Social App Ad Inventory and Scaling a Capital-Efficient Business: appssavvy CEO Chris Cunningham
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