Arctic Startup

This time we feature a bit longer story as Markus Råmark from Mobile Advertising Solution (MAS) provides us more insight into how they see mobile marketing evolving and what they are trying to achieve. (Full disclosure: the author’s employer has a business relationship with MAS.)

MAS launched their 123play portal a while ago in the UK, and aims to open new countries in Europe still during this year. The company plans to have the service available globally by the end of 2010. MAS is currently owned by the operative management and private investors, and is now executing a new financing round and checking for potential new investors, including also VCs.

1. Could you tell us a bit about why you founded MAS and got into the ad-funded mobile games market?

The combination of advertising and gaming on mobile is something which I have always thought would happen, ever since the birth of the whole industry around mobile content and services back in the late 90’s. Advergames, in-game advertising and ad funded gaming are interesting business models and they work well if utilized correctly. My main reason for creating MAS when I did was that it was the perfect time; all the necessary enablers were in place to establish this type of company. The mobile games industry at large is in need of new revenue streams and new effective distribution channels, and advertisers are also looking for new effective channels to reach their target groups. What this means is that there is a clear opportunity to combine these two needs, whereas until now content and advertising would have always competed for the consumers attention. We already know that millions of people regularly play mobile games; equally, the advertising industry is worth nearly half a trillion dollars a year; combining the two is an obvious thing to do.

2. How do you position 123play against and differentiate from the other ad-funded portals?

We are focusing quality, not quantity; we don’t believe that offering hundreds of poor quality games is the right approach. All the games that we distribute need to be top quality and have a high re-play value, otherwise there is no value to our advertisers. This is what makes our ad funded model successful; the more consumers play our games, the more ad impressions they generate. We have strict content guidelines which means we don’t allow adult material, bad language, and violence in our games or advertisements. This means that both big advertisers and game publishers can feel safe about distributing their ads and games in our channel, as there is no chance of their brands being misrepresented or damaged.

3. Regarding partnerts and clients, who’s looking to advertise in mobile games right now?

The ad spend on mobile at present comes from both big global brands and also pure play mobile content. However, the ad funded gaming model is still in its infancy and is being seen as an increasingly popular channel for clients to increase brand awareness and drive consumer call to action. We are running campaigns for clients as diverse as Britvic, eBay, The Sun and NME - it’s accepted that within a few years that mobile will leapfrog online as the most immediate way to reach an audience. I think that as we reach the end of 2008 we will see this channel as a key part of any company/brand mobile strategy.

Obviously, for publishers the operator is still the main focus, but whereas they may get featured on the games portal for a few weeks at best, we can get their games seen by consumers over a much longer period of time.

4. How does one make mobile advertising work?

One of the key things to make ad-funded content a success is relevance; you need to be able to serve people ads that reflect their interest. That’s made even worse if the way the advert is delivered in a poor experience or feels ‘cheap’. Some of the early attempts of ad funded mobile games have been poor quality, so that’s something we are making sure we avoid. We have found the “click to browse” type of ads work well where you can drive more traffic to your mobile site; what’s important is making sure the kinds of adverts you offer are ones that match the profile of the average mobile gamer - so things that focus on lifestyle and having fun. When we have tested these kinds of adverts, the click through rates have been very good, so that’s certainly something we will offer. Games are also a good vehicle for creating brand awareness, due to the amount of time and attention you can capture.

5. How much revenue can one make via ad-funded model?

The revenue potential depends on CPM price and the amount of game plays a certain game generates. We share the NET revenue with game publishers. At MAS, we are targeting the casual-gamer first and foremost, and so far this seems to be working well. One game can easily generate the same amount of income for a publisher as the pay per download model can, if the game is good quality and the re-play value is high. This combination of short, sharp portal downloads and slow and steady ad-funded is the way for publishers to get as much value as possible from the content they create.

Are you aware that sailing enthusiasts earn annually almost double the income compared to amateur golfers in the US? That was news to me when I chatted with the co-founder of sailingregister.com (later abbreviated as SR), Vesa Lindqvist. They have tackled a tightly defined, but potentially lucrative, niche of sailing races.

SR offers something for all parties that include spectators, sailors and race officials. SR’s key service is a secure sign-up system for sailors and race organizers. Sailing event organizers also lack proper services for providing race coverage for sailing spectators ashore and home. SR proposes to provide a reliable, secure and feature-rich alternative.

Their initial business model is to charge a premium from fees collected from race participants. However, the founders have a strong background of mobile business and we can expect the service to offer a range of premium rate mobile services for spectators in the future. Furthermore, they plan to offer social network driven marketing services to advertisers targeting this high-networth customer segment.

With many vertical social networks currently popping up this space is also contested with players such as Regatta Network and Compete-at-sailing. However, I believe SR is on the right track as they target enterprise customers as well with their marketing services. One has to bear in mind that according to Mr. Lindqvist, the total size of the sports industry internet spending in the US alone is circa $239 million.

SR is currently self-funded. They continue their negotiations with lead customers so that they will be ready for sailing season 2008.

I wish the SR guys all the best and good sailing.

Last week we were wondering what was happening to Jaiku as Petteri posted something that caught our eye. It seemed that he got the week’s mixed up as last night Google announced in Google Campfire that Jaiku will be one of the first services to be running on the new Google App Engine. Let’s hope this will shorten the somewhat lengthy development cycles we’ve seen since Google acquired Jaiku last year.

Google App Engine, according to TechCrunch (who’s Michael Arrington crashed the Google Campfire event with Robert Scoble), is an ambitious new project that offers a full-stack, hosted, automatically scalable web application platform consisting of Python application servers, BigTable database access and GFS data store services. According to Arrington the service is somewhat less flexible than Amazon’s S3 as it requires developers to lay the whole development stack on the Google servers where as in Amazon’s case you can pick and mix.

The Camp Fire website states that all users of Google App Engine get free quota of 500MB in persistent storage, and 5M monthly pageviews. In other words, developers are able to scale to a few million users without “infrastructure headaches”.

Due to lack of time, I was unable to write about this earlier, but the Next Web 2008 was organised during the end of last week. There were a lot of companies there from Finland as well. I’m counting at least XIHA Life, Scred and Floobs were present.

Timo Paloheimo from Startupbin.com was also there and has some coverage of the two days of activity as well as some photos.

Juhani Polkko from XIHA Life, sent us an e-mail that they released a new language-based search feature in Amsterdam during the conference.

Update: TripSay was present as well, so quite a good presentation from the Finnish startup scene, I must say.

Something’s definitely happening in the UK and Mountain View today - according to Petteri’s Jaiku post. Petteri is the co-founder of Jaiku working in the UK, while Jyri Engestrom is working in Mountain view with his wife and son.

Yesterday we got our 20 invites and Petteri even replied to his Jaiku announcing those invites as “OK, sounds good. Expect some news shortly :)” - we’re on the lookout!

MahShelf Ltd, founded February 2008 in Espoo Finland is wanting to become the “youtube of books” - a place where you can read and share books online.

The three students, managed by Odin Chen, began working on the concept in the end of 2007. They are pushing out a public beta in April, according to their blog.

MahShelf is in a very interesting area with their service, but they do have heavy competition from Scribd and similar services.

Jaiku has slowly opened up new registrations to their service after Google bought it in October 2007. They have given all current members 20 invites to for registration. Arctic Startup has 20 invites to give away to the 20 fastest commenters. Leave a comment and be sure to give your real e-mail in the comment field. We’ll be sending out the invites later on today.

Fiksuhuuto.fi is an online bidding company founded in early 2008 by Jussi Mäntylä and Tuomo Siurua. The idea behind the concept is simple yet unique. There are open bids on the website put up by the company. You purchase a right to bid for those products (priced between 1,90 and 0,84 euros). Every bid you make increases the price by one cent. Also, when you place your bid for the product the countdown to close the bid starts from the beginning. The coundowns are usually between one and two minutes.

Jussi and Tommi have filed a patent application for the idea. Currently they employ 12 people and ship around 100 products per day. If you calculate 30 bids per product (which is probably far too little), they would be getting somewhere around 3000 euros a day (on an average bid price of 1 euro) just for the bids.

Combine marketing people with a possibility to launch a product online and you get a service where you have to pay to see advertising - News to Screen. In short, News to Screen is a seperate program you have purchase for 29 euros a year to get the news you can get online for free.

In the program you have your normal news headlines, the area where you read the news and a video banner where you will be targeted with advertisements. They company has also had a very hungry start in terms of PR. During the doping scandal of the Finnish Biathlon Association, they were the only company that actually started a sponsorship deal with the skiers left in the association.

There’s enough competition out there in the market with regards to free RSS newsreaders that you really don’t need to build barriers of adoption to your product, like putting a price on it. The company has 13 employees at the moment, of whom 4 to 5 are technically oriented. I wish them all the best, but somehow I just don’t see this product taking off.

Creative agency Bolder Helsinki Oy was founded in the last week of February. The firm promises to do, uh, bolder and more creative and experimental marketing compared to more conventional and established agencies in both offline and online. Target customers are especially new firms, those planning to transfer their business to web, and firms who have undergone a generation shift and might need a strategic approach in creating or renewing their marketing as a whole. Their whole site is unfortunately only in Finnish right now, but an English version is promised to be launched before the summer.

The founder team consists of six Helsinki School of Economics students, who look forward to offer their experience of marketing in the student communities to national and international brands, which are looking to cover segments that might be difficult to reach. The founders are open about their excitement and enthusiasm to help create new success stories, and they’re looking to support entrepreneurship and encourage more Finnish students to consider it as a more tempting career option.

Competition in the media business is tough, but there’s always room for guys who believe in themselves. Best of luck to Bolder and kudos for stepping up with the challenge.

[This post is slightly late due to my winter holiday, sorry about that.]