Flurry Builds a Mobile Ad Marketplace

Mobile analytics provider Flurry announced today that it will launch its own real time bidding (RTB) mobile ad exchange known as the Flurry Marketplace.

The new exchange will be integrated with its supply-side platform AppSpot, and reach more than 300 million monthly uniques. Advertisers can bid on billions of impressions per month, segmented by app, app categories and audience segments.

Stepping back, you might know Flurry from its free monthly reports on mobile app usage. The marketplace’s hunger for proof points in mobile has made this strategy worth its weight in marketing gold. Millennial Media an Jiwire are other exemplars of this.

That exposure in turn vaulted Flurry’s analytics engine to the tune of 300,000 apps, reaching more than a billion devices. It basically gives the tool to mobile developers for free, then upsells things like crash reporting and user acquisition.

Now comes phase II of this revenue model. The loss leader that is it analytics engine has allowed it to scale to the point of critical mass for an ad network. It sees 44,000 app sessions every second, which is 1/3 of worldwide sessions and 90% of active devices.

We’ve seen a few similar stories, where mobile companies built scale and then launched ad networks after reaching that critical mass. Jumptap and Verve Mobile did different versions of this. It’s a clever backdoor way into monetizing a publisher network.

For Flurry, it’s particularly fitting as its core product is all about analytics. This is a good point of differentiation, grounded in all of the user data it can bring to the table. The “Personas” feature of its analytics engine for example, profiles dozens of audience segments.

Think “soccer moms”, “business travelers”, “sports enthusiasts,” etc.; segmentation that can now be applied to ad targeting. That fits particularly well with programmatic ad buying, which is all about defining placement triggers in advance (RTB).

Importantly, this audience segmentation and other data will also allow Flurry to establish premium ad inventory through higher performance (achieved via targeting). This could drive higher bids from advertisers and boost demand.

Mobile display ads are currently undervalued for lots of reasons including oversupply of ad inventory. Things that could turn this around include higher demand and bid pressure from advertisers, as well as sources of premium ad inventory.

Flurry’s scale and analytics chops could position it well to hit a few of these marks. It will compete with other ad exchanges such as Mobclix, MoPub, and Smaato. We’ll be watching closely.