Learning From iAd: Ex-Apple Exec Follows Video Growth To AdColony Gig

by Steve Smith, Jun 15, 2012, 8:15 AM

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The former Senior Manager of Apple’s iAds project Mike Owen has joined mobile video ad company AdColony as chief revenue officer. Owen left Apple in January and retreated to Australia for a number of months before diving back into the mobile media fray. “When I came back I spent a lot of time with a lot of companies,” he tells Mobile Marketing Daily. “AdColony stood out for solving a problem that no one else had figured out about video.”

The company delivers video interstitials within app experiences such as Pinger Textfree, Machinima and Diner Dash. But it also minimizes latency to serve hi-res streams in short ad pods with little lag time between pages or activities. “They do one thing very well, which is very Apple-esque,” says Owen.

Owen was part of the Quattro Wireless team that Apple acquired to form the core of the iAds project. Quattro’s former leader and the head of iAds Andy Miller preceded Owen in leaving Apple last summer.  

In moving to AdColony, Owen is also selling an ad experience markedly different from the much-debated iAd that has struggled for adoption among brands and agencies since its launch nearly two years ago. Unlike the Apple ad unit, which relies on luring a user into a rich experience with a simple mobile banner, AdColony uses a full-screen interruption. “The interstitial approach is absolutely crucial,” says Owen. “It allows marketers to do many of the things they are doing in rich media formats.” But in this case the users actually get to experience the ad.

And after living through Apple’s famously checkered history with courting the agencies in the early days of the iAds, Owen says he has an appreciation of the task at hand. “We had every intention in the world to embrace the agencies, but we had seven-and-a-half weeks to launch the iAd,” he recalls. “Agencies are understaffed and overworked and they have more options today than they ever had,” he learned from pitching the Apple platform. “They need something that delivers performance.”

But they also need the familiar and the straightforward. The iAd challenged agencies to work creative units with the many functions of the device. Owen is hoping that with the AdColony video interstitial unit he gets to sell something that is “easy to execute” but unique to the app experience. “When you think of the consumer relationship on devices, we have the opportunity to get consumers to think differently about advertising rather than take old formats and bring them to mobile platforms.”

Along with Owen, AdColony is hiring two executives from Plasmaworks: Ty Heath, who becomes CTO, and Abe Pralle, now VP of Technology. AdColony claims a 10x increase in its mobile video business in the last two quarters, “and a lot of repeat business from brands and agency partners,” says CEO Will Kassoy. It is expanding its offices as well.

Kassoy says that 15-second ad units have proven the most effective in the app ecosystem, with typical engagement rates of 2.5 to 4%. The company only charges client upon 100% completion of the video, but Kassoy says the interstitials enjoy a 95% to 98% completion rate. The format works well in entertainment and social media environments where users are spending considerable time.

Kassoy says that AdColony has direct relationships with its publisher partners and looks for apps that have long hang times. “The average session time of apps in our network is 14.5 minutes,” he says.  People who engage in content for long periods of time are more receptive to video ads. "We stay away from short session-time apps.”   

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