Backs direct marketing model to deliver value for operators
French mobile advertising provider Sofialys is to head to the VC market to raise funds for future expansion, business development director Julien Oudart said.
The company, which has 30 employees and provides opt-in direct marketing mobile ads and messaging, has been funded from its own revenues and private backing so far. But now it is looking for investors to help it expand its customer base.
Oudart said his company is looking for another 1-2 operator customers, to add to its work with SFR and one North African operator, and about 10-20 major publishers with mobile sites they wish to monetise. The company is also going to launch with one European operator in September to offer free, sponsored, apps from the operator’s app store.
As for other prospects, “We are talking to Vodafone, Orange and Telenor,” Oudart said, “plus a pool of publishers averaging 50-100 million page views per month on their mobile sites.”
But Oudart also knows the pitfalls of seeking VC funding in this market. “In the past 18 months a few companies, such as AdInfuse, have disappeared after not delivering to the VCs,” he said, “Any company that is still here in 18 months is going to be in a great position,” he said.
How Sofialys works
So far Sofialys has two million SFR subscribers opted-in to received ads, promotional offers and messages from its ad network. That’s 10% of the entire SFR subscriber base. Oudart claims that the opt in model achieves higher click through rates of around 15-20% compared to a “maximum” of 5-10% for non opted-in subscribers.
He said the model is multi channel – including SMS, WAP banners and sponsored search terms which brands can bid for – offering operators more of a chance to match brands to users, driving high reponses to competitions. Sofialys asks users to tick one of 12 categories of interest, and can tie that to operator CRM data to build profiles of subscribers.
“It can be done. It’s a lot of work, but you have to do it,” he said.
Handling the competition
With Google, Yahoo! and Microsoft all targeting the market, the opt-in model will give operators an advantage, Oudart argued.
“At one point location was the sole property of the mobile operators, but now Google has got the base station locations, and that control is slipping bit by bit. Where they [operators] can remain ahead of other players is on opt-in, and deep customer segementation,” he said.
Oudart said he thought Velti is the closest company to what Sofialys does. Admob only plays outside the operator space, he said.
Amobee (Oudart’s former employee) is similar to Sofialys in that it works with operators, he added, but it doesn’t offer the direct marketing, opt-in model.