Appodeal Europe Chief Baidachnaya: 2017 “Transformative” for Mobile

Anna Bai_Appodeal EU

Anna Baidachnaya is the Barcelona-based, head of Europe for Appodeal, a San Francisco-headquartered app monetization platform that has won $3.26 million in funding since its 2015 foundation in Russia. Baidachnaya speaks to Red Herring about trends to watch out for in 2017, tech education in Russia and how it’s still not easy to have conversations about the benefit of ad mediation.

What are this year’s biggest trends in ad optimization?

2017 should be a transformative year for mobile developers and publishers. Publishers are finding themselves on a more even playing field as mobile rises as the champion of digital media usage. We’re sure to see many developments in 2017 focused on evolving the world of mobile app monetization.

The first trend is video ads, which grew rapidly during 2016. This format will continue to see incredible growth this year, with a projected increase from $4.35bn in 2016 to $6.72bn in 2017. Usage of video is not only increasing but also improving as time goes on. We can prove it with a rising percent of rewarded videos in mobile gaming. Playable ads in forms of interstitial banners will also get its fair share of attention from developers.

Ad blockers will continue to be a challenge this year as over 25% of all internet users will use it to prevent disruptive ads. eMarketer reports that the percentage of smartphone ad blocking users will rise to 11% this year, quite an increase from 2014’s 2.8%.

Truth be told, mobile ad blocking may be just what the industry needs to catapult the use of dynamic, engaging advertising. A rise in native ads or new unobtrusive ad formats – we eagerly await for what this trend will bring to the industry.

Messengers are The Thing now. Should we expect the new ad formats here? Maybe; moreover, the games in mobile messengers like Viber already monetize with advertising. According to Adweek, there are over three billion monthly active users of messaging apps, many of which are located in Japan, China, and Brazil. This relatively untapped market should present an interesting playground for mobile publishers and advertisers as well as marketers.

What are the biggest benefits and challenges of scaling a successful SaaS company in Russia?

We are not Russian, but rather a global company since our inception. Our clients create different kinds of mobile apps and distribute them all around the world, so we need to have ad networks that deliver ads for all regions – Russia, Germany, France, Brazil, United States, Middle East or Asian countries, any of them.

Although our headquarters are based in San Francisco, we also have an office in Barcelona but the majority of our development team are based in Russia.

The reason is simple: Russian tech education is brilliant. Our development team includes the winners of programming contests, the medalists of Programming Olympics, and hackathons participants. We hire the strongest developers and provide them with challenging tasks, friendly co-workers, and good remote work conditions. For now, our team includes about 80 people from Barnaul (Russia) or Lutsk (Ukraine) to San-Francisco (USA) and Barcelona (Spain).

Do you think the attitude of Russian startups has changed in recent years?

Russian startups have definitely become more ambitious in recent years. They are global: they hire the best engineers and sell their products worldwide: just remember the hype around MSQRD or Prisma apps in 2016. Russian founders in a fast-growing international company is not a surprise anymore. I think it was just a matter of time for a country with such a number of highly-skilled tech professionals.

What have been your biggest mistakes made, or surprises along the way, in building Appodeal?

Not mistakes, just challenges! We did a lot of experiments with our strategy. First, we concentrated on big publishers with many apps and a huge audience. This strategy was weak: we cooperated with mobile apps giants, but they insisted on many features. We tried to satisfy all requirements until we understood that we adjust our product for the very specific needs of a publisher.

The features they asked for might be unnecessary for others, or a publisher could stop the integration in the middle of the process. At least, that was not a good way for stable product development.     

At the beginning of 2016, we changed our focus on middle-sized companies and indie developers. I should mention that by “indie” we mean the developers who work in small teams on casual mobile games or services.

These teams could be super successful and earn as much as top publishers’ apps, but they are faster and more flexible in decision making. Also, their apps work great with ad monetization. This new strategy helped increase our growth of monthly managed revenue in 2016 by 4x.

Another surprise was related to the specific nature of our product. The core of Appodeal is its SDK that the clients integrate into their applications. That means that we are responsible for the stability of SDK, its weight, and quality, as well as for real support in any situation. Staying on developers’ side, we continually work on the improvements of Appodeal SDK and our Support team is one of the best on the market.

Which one piece of advice would you give to entrepreneurs in SaaS? Would that change for Russian entrepreneurs?

Work in your field and do what you are strong at. We created Appodeal for our needs, but now we help thousands of developers to work on the same questions. Find a niche inside your industry and do your best to become a leader in this segment. After that, you can expand your influence on other sectors and conquer the market.

Is it still difficult to have conversations with companies about the benefit of ad mediation, or do most tech firms understand the field now?

It’s still not easy: the revenue questions are always a sensitive area for developers. A lot of app developers are very conservative in monetization: they choose the easiest common way even if it is not the most profitable one.

That’s why we constantly explain how ad mediation works, publish the case studies, talk about the importance of analytics and segmentation tools. Our market, as our product, seems very simple on the surface but has a lot of details inside.

Also, the landscape is highly competitive today. There are dozens of monetization services on the market. On occasions some publishers are tired of searching from new methods to monetize or even look at what platforms they could use for monetization. We offer them a “ready-to-go” solution that includes more than 35 ad networks in one SDK covering all major ad formats in all key regions.

Later, if they want, they could experiment with different ad formats, price floors, or audience segments and sharpen the monetization strategy. At this moment, our analysts come into to play: they deconstruct an application and prepare the recommendations on its ad integration and revenue optimization to help developers earn more.