AppLovin: Building a Mobile Ad Network
In Practise Weekly Analysis
inpractise.com/articles/applovin-and-mobile-advertising
We recently made the observation that The Trade Desk and AppLovin, two of the largest public, independent advertising networks, are owned and led by founders with significant skin in the game. Jeff Green is the largest single shareholder and owns 50% of voting shares of The Trade Desk, a network focused on monetising the web outside of Google and Facebook. Adam Fouroughi, owns 25% of voting and 10% of common shares outstanding in AppLovin, the largest independent mobile advertising network.
We interviewed a Former Managing Director who is now a customer at AppLovin to understand how developers use AppLovin and the strategic positioning of the company in the mobile ecosystem.
AppLovin (APP) was founded in 2011 as a mobile app developer. The co-founders built their first mobile app but quickly realised that finding new users was actually the real problem to solve, not building great apps. This insight led APP to pivot and focus on helping mobile app developers acquire new users globally. This is how AppDiscovery was born, AppLovin’s core marketing exchange.
AppDiscovery is a mobile marketing platform to help advertisers find new customers. Just as advertisers build campaigns on Google, mobile app developers will build campaigns and bid for users on AppDiscovery to drive downloads and greater app monetisation.
The mobile advertising market includes Google’s Admob, Facebook, ironSource, Unity, and AppLovin. It isn't a winner takes all market structure because developers set a target return on ad spend (ROAS) and will use each channel as long as it hits the target ROAS:
"If I advertise on Facebook, I will be buying on the Facebook and Instagram Apps, but also on their audience network, which is smaller than AppLovin and significantly smaller than AdMob. I will buy as many users as I can, hitting the KPIs I've given the network to hit, then go to AdMob where I will buy on Google Search, the Google Play Store and YouTube." - Former Managing Director at AppLovin
Although Google and Facebook’s scale will always attract advertisers, AppLovin has carved a unique position in mobile game advertising by taking a different approach: vertical integration.
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