Now investors are banking on Medialets, with the company Tuesday announcing $4 million in first-round funding led by Foundry Group and including DFJ Gotham and strategic investor Bobby Yazdani, CEO of Saba, which makes human resources management software.
Medialets plans to use the financing to continue to improve its platform and develop new ad technology tools for agencies and advertisers. To meet those goals, it also plans to expand its staff of 14 with new technology-related hires.
"Our mission is fairly simple," said Eric Litman, the company's chairman and CEO. "No. 1 is to be a standard for rich media advertising units around mobile. No. 2 is to make the whole process of ad buying, managing, planning and forecasting easier for everyone in the ecosystem in mobile."
Medialets' platform today is used by publishers including MasterCard, MTV Networks and Tribune Media to serve and track interactive ads in iPhone and Android-based apps. Revenue from the ad-supported apps is shared by developers and Medialets.
The company plans to provide its ad technology on other smartphones including the forthcoming Palm Pre and BlackBerry, Windows Mobile and Symbian devices by year's end.
Litman said that while mobile advertising overall is forecast to increase 30% or more this year, display advertising in mobile apps appears to growing faster than that on the mobile Web. Regarding ad formats, he noted that mobile banners that expand into full-page ads and full-screen interstitials have proven to be among the most popular units.
"The advertisers and agencies we work with want that interruptive stuff," he said, while publishers sought more of a balance between banners and full-screen ads.
Other venture-backed companies trying to capitalize on the popularity of iPhone and other mobile apps by launching their own ad-serving and analytics tools include Pinch Media, JumpTap and AdMob.
"Although this is a very young sector, we believe that Medialets has the management team, experience and traction in the market to be the clear leader in the space," said Foundry Group partner Seth Levine, in a statement.