Twitter's MoPub 'marketplaces are what mediate the advertising platforms,' says AppLovin CEO
AppLovin Founder and CEO Adam Foroughi join Yahoo Finance Live to discuss the mobile developer's revenue growth in app development, software and advertising, as it hopes to acquire Twitter's MoPub publishing platform.
Video Transcript
- The company Applovin went public earlier this year in April, had an initial dip, but since then has rallied quite a bit. Helped in part by earnings that beat estimates last week. The company also in early October announced a deal to buy Twitter's MoPub business for about a billion dollars.
Adam Foroughi the Applovin founder and CEO is joining us now. Adam, thanks for being here. First of all, as Brian Sozzi mentioned going to break, for folks who are not familiar with Applovin, describe to us, give us sort of, you know, the 100,000 foot view of what you guys do.
ADAM FOROUGHI: Yeah, thanks for having me on here. So we're an advertising company for mobile app developers that really create any type of application. And we're a two sided marketplace. So whether they want to find users who are going to engage with their app, they would come advertise to our platform.
And if they want to monetize their audience with advertising, they would use a number of the tools that we built over the last decade plus or that we've acquired. And one of those tools, as you mentioned, was MoPub. And we're really excited about that transaction as well.
- And Adam, you guys also own games yourselves in addition to having all of these ad services that you were just talking about. And in reaction to that earnings report that just came out, I saw some commentary that sort of having both sides of it has helped insulate you to some extent from things like the privacy changes to Apple. Talk to me about that. If that's having any effect on you all, and how you're navigating through it?
ADAM FOROUGHI: Yeah, over the years, we were growing really quickly with just the advertising business. But we wanted to go bigger. And part of that strategy in 2018 was to get into games. And the market, and really even a lot of investors didn't understand what we were trying to do. Were we trying to become a games company with our audience or what?
And now it's becoming very evident what the strategy was. Which was get an audience playing our games, which now we have 200 million a month engaging with our games, but utilize the data from that audience, resell it through our marketing platform for the benefit of all of our clients. And that part's really important. We were able to grow our software business after the IDFA changes this past quarter to $193 million this quarter.
And last year, we did $200 million of software revenue in an entire year. So we did almost that amount in just the quarter. And at the moment, we're one of the fastest growing software companies on the planet because of that.
- Adam, how big is that MoPub business?
ADAM FOROUGHI: The MoPub business is a big marketplace. And these marketplaces are what really mediate the advertising platforms in this ad auction. So it's very similar business model to the New York Stock Exchange. Whereas a marketing platform ourselves, we sit on that exchange to trade media. And around us are Facebook, Google, and a lot of other companies that are also trying to monetize the user through an ad.
And they are the marketplace. We also have a very fast growing marketplace called Max. And bringing the two together, we think we'll create the biggest and fastest growing solution for app developers. And really since the beginning, our philosophy has been give the best tools to the developer, and that'll help them make more money from their audience, which they can then reinvest into growth and also better app development which helps them make better experiences for the consumer.
- How do you see Applovin playing in the Metaverse?
ADAM FOROUGHI: A common question these days. And really there's two parts to this. There's the content and then there's the economy and ownership. And as we go into these virtual worlds that are even more immersive, what we're excited about is we've got a pre-existing audience of the 200 million playing our games. We've got app developers that are making games for us. And then all of our partners, and then a huge audience of a couple billion playing games that engage with our advertising platform every single month.
And then we've got expertise across team on building software. And the part of the Metaverse that we're most engaged with is the play to earn ecosystem. We look at gaming today as really fun for the user. But users are spending a lot of dollars, over $100 billion a year engaging with games one directionally. It's an investment in and nothing back to them.
And we think if there is an economy that gets built where the user can invest in and make an earnings out by owning digital assets and trading them, it could become a huge business. And so we're really interested in where that goes and develops. And we think the ramifications for our business are very positive.
- And Adam, forgive me, I'm going to come back to the Apple question again. Because I'm not quite understanding how you guys are avoiding. Because if you own these games but also have clients in among other tech companies, and you have customers who are saying, don't track me across apps. How does what you're doing sort of avoid that?
ADAM FOROUGHI: Well, we don't avoid that. So we have a business model where we've got an audience data set that comes from our first party games. And the Apple changes in any privacy regulation has to do with third party sharing data with first parties. And in this case, it's all about cross-app tracking. Just because a user opts out of cross-app tracking doesn't mean you can't serve them an advertisement that's interesting to them within an app. If someone's engaging with one of our apps, let's say a word scapes, we know that audience because they're on our property.
If they're on another property, let's say some solitaire app, well, they're engaging with that solitaire app. And that tells our system something about them. And with contextual relevancy, we're able to serve them something that is engaging still to them. And really the key in this privacy safe world is give the user choice, but then as a technology company, we still want to deliver high quality content. And it's important because it drives discovery, and it drives more user consumption. And we're in the business of doing that.
- Gottcha. all right, now I get it. Adam Foroughi, Applovin founder and CEO. Thanks for being here. I hope to see you again. Take care.
