mobile advertising
Jim Payne

Mobile Ad Exchange MoPub Says It Reached A $100M Revenue Run Rate In May

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MoPub, a startup that helps mobile app publishers run advertising from multiple sources (such as ad networks, direct sales and cross-promotion), says that it reached a $100 million revenue run rate this month.

MoPub is now conducting 2 billion ad auctions each day and reaching more than 550 million unique devices each month, the company says. The MoPub exchange launched 18 months ago, and CEO Jim Payne said that the company hit an “inflection point” in the past four to six months, with “astonishing” growth since the end of last year — revenue is up 3x compared to the fourth quarter of 2012, he said.

Payne added that having that kind of reach is crucial, because that’s when MoPub “becomes interesting enough” for ad networks and other large partners to integrate with.

In terms of ads served, Payne said it’s “almost 50-50″ between iOS and Android, but that more than 60 percent of revenue comes from iOS. The most popular ad is the “app install” format that Facebook launched last fall — not that MoPub integrates with Facebook, but Payne said the social networking company has helped popularize the format. After advertisers have success with app install ads on Facebook, they’re looking to expand their reach by buying similar ads elsewhere.

Payne attributed much of that growth to the broader shift in mobile advertising towards a programmatic buying model where ads are bought in an automated way through real-time bidding (RTB). Quoting MoPub investor Rich Wong of Accel partners, Payne called this the “rise of the machines.” He said that 20 percent of ads on the MoPub exchange are now being cleared through real-time bidding, with more than 75 bidders, including InviteMedia, Turn, AppNexus and Jumptap.

“There’s a little bit of handwringing about programmatic on the desktop side,” Payne acknowledged. Publishers are asking, “Is this going to cannibalize me? Is this going to devalue my direct sales inventory and drive down my CPMs?”

But Payne said that many MoPub publishers “don’t have a huge strategic impetus” to build their own direct sales teams, so RTB is actually increasing their CPMs (the price paid per thousand impressions). Payne predicted that trend will continue for at least the near future.