What does Yahoo’s deal to buy Flurry have to do with Twitter’s purchase of mobile exchange MoPub last year? Nothing and everything.
But first, let’s define our terms.
What is Flurry, exactly?
Flurry has a grab bag of solutions under its umbrella: analytics, ad network capabilities and ad exchange functions. But at its core, Flurry is an analytics company that maintains direct relationships with 170,000 individual app developers, all of which have installed Flurry’s SDK, meaning the company can track customer behavior on more than 542,000 mobile apps.
Flurry uses that rich source of first-party data to power "Flurry for Advertisers" (formerly AppCircle), which acts like an ad network, helping app developers target audiences and encourage app downloads. Same goes for video.
On top of all that, Flurry launched an RTB marketplace last year, which CEO Simon Khalef at the time told AdExchanger is meant to be an extension of its buy-side business and performance marketing. Several sources, however, suggested that Flurry’s programmatic capability is far less robust than an exchange like MoPub.
One source who spoke with AdExchanger, the CEO of a major mobile app measurement company, said that the "Flurry for Advertisers" ad network is responsible for the bulk of Flurry’s revenue, noting that the app inventory available on Flurry’s exchange is thin.
Interestingly, multiple sources in the app ecosystem approached by AdExchanger weren’t aware that Flurry even has an exchange, which may indicate Flurry’s exchange hasn’t yet made much of an impression on the market.
MoPub, on the other hand, is very clearly a programmatic supply-side platform that does for Twitter everything an exchange should do. In other words, it enables programmatic buying through real-time bidding and mediates demand sources for publisher that have its SDK installed, and the reach is potentially vast. In its Q1 2014 earnings call in April, Twitter claimed that it has the ability to reach 1 billion iOS and Android devices through MoPub.
No one would argue that MoPub is an ad exchange. But Flurry? It’s hard to say that Flurry is any one thing.
“If I had to say, I would call Flurry an 'ad platform,'” said Opus Research senior analyst Greg Sterling. “Air quotes around ‘ad platform’ intended.”
What Flurry has in common with MoPub says more about Yahoo’s need to make a mobile play than anything else. Flurry’s data, tech and nascent exchange are all new potential enticements for advertisers and mobile publishers.
“Yahoo had to make a move into mobile and Flurry needed a home,” said Adam Foroughi, CEO of app marketing platform AppLovin. “Flurry has a good brand in mobile that they’ve built over the last seven or eight years. Yahoo wanted Flurry for its analytics and its mobile app developer relationships. There are lots of less expensive supply-side platforms Yahoo could have absorbed if they just wanted a technology play, but they chose Flurry because they needed to enter the space with a recognized brand.”
Of course, it’s more than just about snapping up a big mobile name. If it was just about that, Millennial Media could just as easily be standing in Flurry’s shoes.
“Yahoo just saw a 7% decline in PC display, which means mobile is one area in which they can improve. Yahoo needed to buy somebody to expand their reach,” said Sterling. “Flurry is definitely an international play as well. I thought Millennial Media could be a target for Yahoo, but they’re not international enough, so arguably Flurry also gives Yahoo a broader scope.”
Scott Swanson, president of global advertising sales for Opera Mediaworks, would add to that.
"Flurry’s Trojan horse has been analytics to get their SDK onto apps," said Swanson. "Flurry’s first-party data gives it a little more teeth and makes it more powerful. If Yahoo just wanted to get a network or a mobile ad exchange they could have bought a company like Nexage, but they wanted a more direct relationship with publishers and this is a good move for Yahoo for that reason.”
As for the future of Flurry’s still youthful exchange — youthful in terms of inventory available, rather than core technology — Foroughi said it’s possible Yahoo will invest some money to pump up Flurry’s programmatic supply.
“The ultimate goal for Flurry was for their exchange to be like MoPub,” said Foroughi. “I couldn’t say what Yahoo’s objectives are for the exchange, but it’s definitely a ‘nice to have,’ considering Flurry’s investment in it. I’d imagine Yahoo will make more investments in that area, especially because, of all the big companies, Yahoo has seen the least amount of advertising dollars from mobile and, at least right now, it doesn’t seem like they’re succeeding like Twitter, Google or Facebook in this new mobile world."