Tapjoy’s mission is to maximize the value of every user for freemium mobile app publishers.
Tapjoy is a startup that provides monetization and distribution services for mobile app publishers. Specifically, it helps publishers generate revenue from freemium apps. It was founded in 2007 by Lee Linden and Vn-parco.com Lewis, former product managers at Microsoft and Google. Tapjoy has received significant funding from investors over time. In its first year it raised $4.6 million in a Series A round led by InterWest Partners. This was followed by an investment of $15 million in 2009. In 2010 the duo of Linden and Lewis sold Tapjoy to Offerpal Media. It became known as Offerpal, but the company adopted the Tapjoy name after its own brand became tarnished on Facebook.
Investments continued to roll in, as Tapjoy raised funds totaling $102 million in 2011. The company has since gone on to be a great success in terms of utilization. As of 2016 its Personalized Monetization Platform is used for more than 10,000 mobile apps that are downloaded by over 500 million monthly active users. Its Marketing Automation and Monetization Platform is used for more than 270,000 apps with a reach of over 500 million monthly active users.
Business model of Tapjoy
Tapjoy has a segmented business model, with two customer segments having slightly different needs:
- Mobile App Developers: The company offers Software Development Kits (SDKs) that app publishers can use to monetize their products. It also provides consultation and integration support services. Its customers include Warner Bros., Crowdstar, Topps, PuzzleSocial, BigBlueBubble, Ludia, and Ponos.
- Advertisers: The company assists advertisers with getting their promotions seen by mobile users. Specific solutions include rich media for interactive app experiences, direct response solutions (e.g., click-to-call and click-to-text), app engagement solutions (e.g., pay-per-install and pay-per-engagement), and customer targeting solutions (e.g., by demographic, location, and language).
Tapjoy offers three primary value propositions: accessibility, performance, and brand/status.
The company increase accessibility by giving mobile app publishers the ability to earn revenues from non-paying users. Specifically, it provides the Marketing Automation and Monetization Platform, which uses predictive analytics to identify customers who are not paying and likely never will. The platform then places ads in front of these particular users.
The company has demonstrated impressive performance with its services. It enables developers to monetize as many as 28% of users, compared to the typical 5% for most apps. Further, there are 4.23 million ad conversions on a daily basis. Tapjoy indicates the following potential monthly incremental ad revenue figures for different numbers of interstitial ads (for an app with 250,000 MAU):
- 4 interstitials – $5,000
- 8 interstitials – $10,000
- 15 interstitials – $18,750
- 30 interstitials – $37,500
Because of its performance, the company has built a strong brand. Its SDKs have been used for over 270,000 active apps with a global monthly reach of over 500 million users.
Tapjoy’s main channel is direct sales, through which it acquires new customers. The company also promotes its offerings on its website and social media pages. In addition, it utilizes search engine marketing.
Tapjoy’s customer relationship is primarily of a dedicated personal assistance nature. The company offers the following kinds of support:
- Integration Support – The company provides technical support so that customers can incorporate its platform seamlessly into their apps.
- Dedicated Account Manager – All publishers are assigned one of these to assist them with staying on track. The managers provide advice on how to optimize apps for best performance.
- Expert Consultation – The company employs consultants with expertise on the influencers of virtual economies, user engagement, and mobile app mechanics. They help customers design successful strategies.
That said, there is a self-service component. Tapjoy maintains a self-service dashboard through which customers can easily make changes – for example, customizing messages, adjusting ad placements, and segmenting the user base – all without having to update their code. In addition, its website features a Resources page that includes case studies, reports, tools, and webinars.
Tapjoy’s business model entails producing software development kits that app developers and advertisers can use for their respective purposes.
Tapjoy maintains partnerships with ad mediation companies. The firms provide two integration services to app developers:
- Platform Integration: This service provides publishers access to Tapjoy’s LTV Infrastructure for the yield management of contextual marketing messages and ad demand.
- Adapter Integration: This service provides Tapjoy’s video ad service through mediation companies’ SDKs, allowing publishers to access the company’s brand advertising partners.
Customers can access the services through their self-service dashboard. Specific partners include Fyber, MoPub, and AerServ.
Tapjoy’s main resource is the engineers that it uses to produce its software development kits.
It also depends heavily on human resources in the form of its dedicated account managers, consultants, and technical support staff.
Lastly, as a relatively new start-up it has relied heavily on funding from investors, raising $121.6 million from six investors.
Tapjoy has a value-driven structure, aiming to provide a premium proposition through personal service. Its biggest cost driver is likely sales/marketing expenses, a fixed cost. Other major drivers are in the areas of customer support/operations and product development.
Tapjoy has two revenue streams: the fees it charges to app publishers and those it charges to advertisers. For publishers who do not use the service to monetize their apps, it offers the following pricing for analytics:
- 0-10,000 MAU – Free
- 10,001-1,000,000 – MAU x $0.01
- 1,000,001+ – Enterprise Level (pricing varies and is customized)