Fiksu Looks to Help Brands Like Gilt, Barnes & Noble, Groupon Spend Less to Get More Mobile App Customers

5/2/11Follow @xconomy

You could say Fiksu, one of Boston’s most buzz-worthy mobile startups, took the lemons its first product gave it, and made lemonade.

The firm, founded in 2008 under the name Fluent Mobile, rolled out a news aggregator mobile app in 2009, to help consumers track and read publications from their smartphones.

“What happened with the app was very similar to what we see with other apps that have a successful launch: lots of downloads in the beginning, and relatively quickly things started to peter out,” says Fiksu CEO, president, and founder Micah Adler.

“We obviously needed to figure out how to market our mobile app,” he says. So the firm contacted mobile advertising networks to take a deeper look at customer acquisition for its app. Fiksu found that attracting customers through these networks cost it roughly $3 for every user download of the mobile application.

“We immediately saw there were tremendous inefficiencies in the mobile marketing ecosystem,” Adler says. The company took that knowledge to develop an algorithm-based service that, six months later, brought the cost of acquiring a customer to well under 30 cents, he says.

At that point, Fiksu could have taken its newfound knowledge on app marketing to build a bunch of (hopefully) successful apps itself, or “use this service to help other people market their apps.” Last year Fiksu officially pivoted its business toward the latter, and spent months further developing its technology to help mobile app makers attract more customers at a fraction of what they were previously paying. It publicly announced the launch of this service last month.

“The idea here is that were able to generate very large volumes of loyal users and we’re able to do so cost effectively,” says Adler. “We’re not just looking for downloads, we’re looking for people who are going to stick around and use the app.”

Fiksu’s service taps into more than 20 different sources of mobile advertising traffic, engages in real-time bidding, and offers incentivized downloads to consumers. The volume at which Fiksu bids enables it to pay more cheaply per consumer, Adler says. The Fiksu engine also has algorithms for most effectively spreading bidding across the different ad networks in real-time, to help mobile app publishers find the most loyal and relevant users at a given time. It also provides data on how mobile marketers are progressing against their goals, Adler says.

Adler, a former UMass computer science professor who previously founded two companies focused on efficient search engine marketing, says Fiksu is the first to combine these techniques for the mobile sphere. Companies previously had to bid for potential users on a very piecemeal basis, he says. “The only avenue for doing this was to work with the individual sources,” says Adler. “It’s a very complex ecosystem.”

Fiksu started working with some beta customers last summer, and has since served some big-name brands like Gilt Groupe, Barnes & Noble, VH1, Groupon, Ask.com, and Hearst Magazines. Adler says Fiksu now works with dozens of companies as clients, and charges on a case-by-case basis, depending on a company’s marketing budget. Fiksu, which has grown to roughly 40 employees, raised a $5.5 million funding round in December from Charles River Ventures as it developed the new service, but doesn’t have plans for a new venture round any time soon, Adler says.

As mobile app developers put more attention on actually making money off their technology, Fiksu is well-positioned to help them sort out the complexity of the app marketing field, Adler says. He hopes the company won’t just be a tool for mobile marketers and advertisers, but a complete service to getting customers to their apps. “The more we run these campaigns, the larger our insight gets to the general dynamics of the field,” Adler says.

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