Mobclix: Cursed Or Blessed?

Mobclix is a mobile advertising exchange platform that makes integrating advertisements into mobile content a breeze for developers. They’re leading the pack in the mobile ad exchange space but are they headed in the right direction?

There isn’t a single market that’s changing faster than advertising right now. Throw the rapid adoption of web enabled, mobile devices on top of the huge macro changes in the publishing industries and it’s no surprise that mobile advertising is red-hot right now.

Mobclix is a mobile advertising exchange platform that enables developers to easily monetize their applications with advertising from a variety of ad networks. The special sauce seems to be in Mobclix’ process for optimizing ad inventory for the highest eCPMs – effective cost per thousand impressions. While Mobclix has many announced partnerships with ad networks including Quattro Wireless, Millennial Media, Jumptap, and Mojiva, there are a few notable names not on the list – namely, AdMob (recently acquired by Google), Google AdSense, and iAd. Not only are they not on the list now, but they’ll probably never be.

Developer sign up with Mobclix and plug in a single line of code into their mobile application. Then they can change which ad networks they use and other settings without republishing their application – a big deal when it can take days or weeks to get an app approved through marketplaces like the Apple App Store.

Mobclix may have a great offering, but a lot has happened in this space in the last 6 months: In November 2009 Google bought AdMob for $750mm and Apple picked up Quattro Wireless for $275mm in January 2010. AdMob had the best product and biggest market share by far in late 2009 so it only made sense that they were picked up first (and probably bid up significantly by Apple). Was Mobclix just not ready? From the outside, it looks like Mobclix has been passed up twice now. But I don’t think it’s that simple. I sat down with three of the co-founders at Mobclix to get the latest scoop and to find out whether their future is cursed or blessed. A special thanks to Sunil Verma, Krishna Subramanian, and Vishal Gurbuxani for being so generous with their time.

The Basics
Mobclix has four co-founders, 18 full time employees (on University Ave in Palo Alto, CA), 7 Part time employees, and 12 people in India. Things started up in February of 2008 and officially launched at the Techcrunch 50 in September 2008. Around the same time Mobclix won a competition in London called Seedcamp. “We had a gut feeling that the iPhone and mobile applications were going to be driving the future” says Vishal. With backgrounds in mobile analytics and online advertising, the Mobclix founders saw a huge potential market and they were right.

Here’s the advice they had for future entrepreneurs: "Team is super important. Find something that drives real value for someone that you’re passionate about. Be nimble. Expect market changes. Every week something crazy happens here, and you have to adjust.”

What’s the true innovation?
MobClix is a mobile ad exchange (which aggregates ad networks) that allows developers to manage their monetization strategy through several key innovations. Mobclix holds patents on efficient ways of capturing, storing, and transferring mobile data. They’re also on the bleeding edge of game-changing rich media on mobile devices which allows for video and interactive ad units that take advantage of the accelerometer, gyroscope, and audio on mobile devices. Finally, Mobclix is the only server side solution out there. Big online ad networks can’t go mobile without spending months developing the platform. They can, however, sign-up and start deliver ads through Mobclix in no time flat. This gives the big online players access to unified ad spend across different kinds of devices now.

Developer’s Pain & Solution
Krishna: “Without us in the picture, a developer would have to – through each of these networks – sign up, download a library, figure out reporting, and log into multiple dashboards. It’s an arduous process. What we’re really doing is a one-stop shop. [Right now] there’s no way to get insights for how your app is performing. The entire app experience isn’t being tracked. Apple, Google, even Microsoft, all they give you today out of the box is download numbers – how many people are downloading your app for free and the breakdown by country. That’s really hard to manage because it’s literally an excel file that they give you.” 

The Mobclix solution is threefold: 1) free detailed analytics, 2) data driven monetization solutions through advertising, and 3) cross-platform rich media like video and hardware enabled advertising (soft drink ads where you can actually pour yourself a drink). These features allow for greater optimization giving both advertisers and developers higher revenues. “At the end of the day we want developers to make the most money they can for their application.”

Apple’s iOS, Google’s Android, and Microsoft’s Windows Phone are all exciting mobile operating systems for Mobclix. Apple has about 100 million mobile devices now (iPod Touch, iPhone, and iPad), over 200,000 apps available on the recently released iPhone 4, tens of thousands of developers, and a $2.5bn annual app economy. The reasons to be excited about Apple’s iOS are clear and real, but Google’s Android platform is also very interesting. Android is open source but “because it’s open source it’s very fragmented,” says Vishal. The hardware isn’t standard, carriers tweak the Android system, and there are several popular versions of the operating system currently in use. “So many different options on Android cause developers to be confused.” Developers can have access to a lot of Android devices, but if they want to optimize their application to specific hardware they may have to choose a particular subset, which limits their audience and usually hit’s a developer’s bottom line.

Mobclix is also really excited about Windows Phone. Aside from being more open than Apple’s iOS 4 but less fragmented than Google’s Android, Microsoft has Silverlight (Microsoft’s Flash equivalent) and XNA (the XBox Live game platform). “All of the anecdotes we’ve read say that 80-90% of the code you’ve written in your XNA game will run on Window’s phone. That’s a huge advantage for Microsoft. And they already have 12 million developers for .net that can instantly make something for Windows phone. Of course there’s mobile web but our platform is primarily focused on apps.”

The Market  & Competition
Krishna cited Gartner reports that say the mobile advertising market is around $1bn today and will grow to $10-15bn by 2015. Smart phone adoption is a big driving factor. The Mobclix founders expect 50mm Android enabled phones by end of 2010 and 30mm Windows Phones by the end of 2011.

Right Media (acquired by Yahoo! in 2007) is an online ad media exchange that Vishal says is Mobclix’ closest competitor. Google’s AdMob doesn’t offer "competing products per say, but we’re competing for publisher and developer relationships."Since a developer will never know in real time what’s going to maximize their revenue Mobclix is shooting for the best data driven, real time optimization and the highest fill rates for ad requests. But if online advertising is any indicator, then “one mobile ad network will never be able to fill you.” Not for a while at least. That may be the key advantage Mobclix has as an exchange.

When I asked if Mobclix was worried about Apple or Google squeezing Mobclix out, Vishal told me that it’s all about the relationships with publishers and advertisers. The market’s been validated and one of the things they’re excited about is that Apple is going out and educating the market place. But what about the new Apple developer TOS? “If you’re going to be using analytics for advertising, then Apple’s going to allow it.” That seems to be true, as long as you don’t develop a mobile operating system.

The Financials
The Mobclix founders bootstrapped for the first year, raised a small angel round from friends and family, and then a little under a million in debt from WTI. Right now, they’re focused on running a very lean company with the goal of growing into a big company. "We’re not opposed to fund-raising. We’re just looking for the right strategic partner. Carriers are pretty exciting [as a strategic partner] because they’re sitting on so much money and have no idea where to invest.” There’s also a lot of interest in the mobile data that Mobclix is collecting. The founders expect to be profitable by the end of the year.

AO Take:
There’s a lot to keep in mind when considering Mobclix and what might happen over the coming months:

1. Mobile advertising is a rapidly growing and transforming industry. There’s still plenty of blue ocean out there.
2. Mobclix is an ad exchange which aggregates ad networks like Quattro and Jumptap. AdMob and iAd are ad networks (for now) and therefore not direct competitors.
3. Both Apple and Google can change the rules of the game at will, but appear to be focused on one another. As much as Jobs would probably like to, he won’t shut down other advertising networks on Apple mobile devices soon because iAds can’t fill enough impressions. Doing so would upset the developer community and hurt Apple device sales. Jobs can prevent Google from getting Apple analytics though.
4. If web advertising is an accurate indicator, mobile advertising is not likely a winner-takes-all industry because no one can fill 100% of ad requests.
5. Venture fund-raising could prove to be especially difficult for Mobclix if there’s no clear exit. There may be some other strategic partners out there though. But, Apple’s new developer TOS shrinks the list of potential strategic partners because third-party mobile OS developers (Microsoft, Nokia, HP) won’t acquire Mobclix now. If Mobclix is profitable by the end of 2010 as planned, then additional funding may become immaterial or significantly easier if they can justify the ROI for growth capital.

Has Mobclix missed out since both of the 800 lb gorillas have made their acquisitions or will the ad exchange approach enable Mobclix to outmaneuver the battling alpha males? The only thing that’s clear right now is that there will be some interesting battles (and big winners) over the next few months. Let’s hear your voice below in the comments section.

Stay up to date on the company’s journey at the frequently updated Mobclix blog.


[Originally published By Andrew Bellay on]