Imagine if you walked into a used car dealership and knew exactly how much the dealer was skimming off your purchase. I don’t want to draw a parallel between used car sales and the mobile ad marketplace, but it’s an industry, like many, that could use more transparency. Burstly, an ad manager service, wants to do just that.
The company, a reincarnation of .App/Ads, just raised $1.8 million in series A funding from GRP Partners (Mark Suster is a partner) and Rincon Ventures. That values the start-up in the eight-figure range, according to CEO and founder Evan Rifkin. Burstly emerges from closed beta today and offers a full service, open platform (an open SDK structure) to help iPod touch and iPhone app developers optimize their advertising revenue streams, use a variety of ad networks or exchanges, directly sell or buy ads from other developers, run in-app purchases, rotate different content into ad slots and more. In addition, Burstly can support any ad size on the iPad and video interstitials.
As of now everything is free except for the Burstly marketplace, where developers can buy or sell ad space with the community on a pay per install basis— all prices are transparent and Burstly collects a uniform 10% cut from each transaction. They’re so confident in the business model, that Burstly will give developers a no risk guarantee: the publisher submits a floor eCPM and Burstly will run impressions and try to beat that— if they can’t do that they’ll pay double the difference at the end of each month.
The key to the company’s future profitability is of course volume. Rifkin knows that a 10% margin is pretty thin, but he’s hoping that the suite of services, simple interface, and clear economics will attract enough users to put the company in the black. With just 100 private beta users on the site (including Inedible Software, Boy Genius Report), he acknowledges that it may take 1.5 to 2 years. In fact, the company knows it may lose some money from its money back guarantee. Clearly, profits will require patience, but Burstly is well situated to be an important player in mobile advertising out of the gate— especially for small developers.
Burstly is trying to set itself apart from competitors like AdMob and Quattro (both of which were recently acquired by giants— Google and Apple respectively), by focusing on a highly customizable ad management platform. A developer can add several SDKs and fine tune those options. For example, you can set it up so that a customer will only see Admob’s ads three times within a 24-hour period, after that limit is reached, new content from other sources like a different ad network, in-app purchase button, or Twitter/RSS feed could fill that space. The combination of new customizable services and the marketplace feature could be incredibly beneficial for small developers, who are not delivering tens of millions of impressions a day but are eager to maximize their ad mix. According to Rifkin, Burstly is not aiming to replace the mega ad networks, but let’s be honest, as Burstly’s marketplace grows (if, of course it can gain real traction) more and more developers will devote a higher percentage of their inventory to Burstly’s marketplace.