Unless your company is called Facebook or Google, you will have a hard time building a growing business selling mobile ads.
xAd, a seven-year-old firm that provides mobile location data to retail marketers, says it’s bucking the trend. The New York-based private shop claims today that it has clocked 100 percent annual growth, as of the first quarter, and a run rate of $250 million (based on fourth-quarter projections). And it has made a new marquee hire: Shashi Seth, a partner at Tandem Capital and former product executive for Yahoo and Google, is joining as chief product officer.
The company’s main schtick is selling ads based on very granular details about user location. It’s like bidding on keywords within search, only for certain physical spots. Consumers who go near or enter a Home Depot, for instance, would be served ads inside mobile apps or websites from Home Depot — or a competitor. It’s a little creepy, but advertisers long for such specificity. Boosters call xAd’s system the “AdSense for location,” referring to Google’s multi-billion dollar web ad business.
Both Google and Facebook have tested location-based mobile ads, but have moved slowly due to product decisions, privacy concerns or some combination thereof; Snapchat is working on location-specific ads, too.
The xAd run rate would place it in the top eight companies netting mobile ad dollars, below Yelp and above LinkedIn, per eMarketer figures. Still, in those estimates, Google and Facebook command almost half of the revenue, with third-place Twitter claiming just 3.4 percent.