Be persistent: Success is a trade that is earned

ayeT-Studios is a mobile advertising focused DSP

Please introduce yourself and your startup ayeT-Studios to our readers!
I am Pascal Ludynia, CEO and co-founder of ayeT-Studios. I founded the company together with Florian Brede in 2014. In 2015 we were able to score a big win hiring David Heuer. He came in as additional CEO and is a former Zalando employee and made his PhD in Marketing and Data Analysis.

ayeT-Studios is a mobile advertising focused DSP. Our goal is to enable app developers and brands to reach their marketing objectives at every stage of their product’s life cycle. We can help you launch your app as well as grow or retain your user base. In addition we can help you acquire visitors and leads for your website or ecommerce shop. On top you can compare marketing spend across multiple mobile channels to make sure you get the best possible user for your ad spend.

How did you get the idea to ayeT-Studios?
I’d say the idea rather came to us. In addition, we got a lot of customer feedback over time that shaped our ideas into which direction we want to evolve.

Back in 2014 Florian and I still worked at our old company energieheld. It was a company we co-founded. Florian was in charge of the tech, I was in marketing. At the time I was setting up campaigns in AdWords and Facebook and also looked into Criteo to acquire users for our Website.
Florian developed apps in his spare time. One of the games he had developed was “SketchIt”, a game technically much more advanced than its competitor “Draw Something”, a company that eventually got acquired by Zynga for 200 Mio. USD. So I did, what all good friends would have done, I made fun of him that he had built a great app but was hardly making any money with it.

He never actually thought about monetization when first developing his app. He also never invested in marketing. For monetization we figured that buying a special color, pen or sticker would have been a good way to monetize SketchIt. So users would get premium content via In-App-Purchases or through virtual currency. We looked into it a little bit and found that there were companies like Tapjoy and Fyber that offered rewarded monetization solutions (i.e. offerwalls) for app developers. On the other hand they offered incentivized app install campaigns for all developers that wanted to grow their user base. So they built an ecosystem in which the tasks completed by users in the monetization solution were sold as app install campaigns to advertisers.

We thus decided to try to tackle the monetization challenge Florian had first encountered with his app. Agreed on building an app, where monetizing users would be our primary goal. We would build an app where users can scroll through a list of apps or tasks (called offerwall), download those apps and get a small reward in return. What we basically did is passing a major part of the commission we got for each install to our users. Once our users collected enough money, they were able to trade those in for a PayPal payout or a gift card from Amazon, the Play Store or similar. So in the end, the users earned us money and we rewarded them in return. We named the app CashPirate.

Soon after, app developers, who were users of CashPirate initially, asked us whether they were able to buy downloads for their apps from us directly. Apparently, there was an increasing demand for incentivized installs. Back then the Play Store algorithm still heavily ranked apps based on the number of daily downloads. So we eventually decided to build a platform around CashPirate to sell our ad space directly – ayeT-Studios was born.

How difficult was the start and what challenges you had to overcome?
We can’t complain about the start. Our initial idea took off right away. Demand was huge due to the fact that Play Store ranking was easy to influence that way and we were able to offer ad space at very competitive prices since no intermediaries (e.g. ad networks) were involved in the process. These intermediaries manage ad delivery to end publishers and take a certain share of the advertising budget. Specifically, smaller indie developers bought our service for the fact that with improved Play Store ranking, more organic installs would be drawn to the app with rather low advertising budgets involved.

The first challenge hit us when ad fraud rose. Scammers started to build platforms similar to ours but used bots that downloaded the apps instead of real users. Uneducated app developers looking for app installs couldn’t tell the difference and bought at those companies for much lower prices per download compared to our platform. Sure, those companies didn’t have to pay any user, that way they were able to offer much lower prices. Some scammers even copied our whole website and dashboard layout, using the exact same wording and pictures. One especially didn’t even manage to change the imprint. We started counter-measures by improving our platform step-by-step. The first step was to integrate third-party tracking providers like Appsflyer to show developers that we are trustworthy and that they were buying downloads from real users.

We also communicated more heavily to advertisers that user acquisition is not only about an app’s ranking but about the user engagement you get from paid downloads. In the end it’s about finding the channels that provide you with customers generating revenue for your app business at the lowest possible cost.

The second challenge came up when Google changed the algorithm for ranking apps in the Play Store. It was never our goal to sell a service that creates value through tricking Google by improving ranking. History in influencing desktop ranking by i.e. buying huge amounts of backlinks has shown that trying to trick Google is never a sustainable approach. So those where actually news we were very happy about, since we had an edge to all the companies selling bot installs. We expected Google to take measures like that and therefore started to work on diversifying our portfolio of services by taking steps to develop a full-fledged demand side platform offering access to various traffic channels and ad formats to enable advertisers to optimize their campaigns by finding the channel-format-combination that yields the highest return on ad spend.

Nevertheless, the Google update took off momentum from incentivized installs for our main customer base resulting in a market decline for incent campaigns and a slight pressure on our revenue as well. Revenue is crucial to us since we are fully bootstrapped.

At this stage we are still in the challenge mode, but are setting all up for future growth again. Our platform has a solid foundation and is only 3 to 6 months short of reaching a stage at which we will have added features that make us swim alongside the big mobile ad networks out there.

Who is the  target audience of ayeT-Studuios?
So far most of our clients are small to medium sized app developing studios. But brands and ecommerce players as well as larger app publishers are going to be more important in the future as they combine most of the spending power in the market. We currently look to build first ties with these players and have seen some first promising partnerships recently.

Also work together with quite a few marketing agencies buying media for their clients. We believe that agencies will play a crucial role in our growth strategy. Thus we offer a multitude of different options for them to suit their needs.

We generally target companies advertising in the mobile space and seeking to ultimately optimize their advertising campaigns. We provide the technological edge as well as the reach to conduct this in an efficient manner.

What is the USP of ayeT-Studios?
Our USP has always been our publisher assets. With CashPirate and now our second app GiftPanda, we have been able to sell our own ad space directly to our customers. This is a very cost-effective way for advertisers and additionally, it enables us to gather a lot of information about our users that help us improve targeting for future campaigns. Targeting capabilities as well as direct access to users are key factors to improve efficiency of marketing campaigns for our clients and this is what gives us a great position. The revenue of CashPirate funded the development of our platform for the last couple of years but is limited in terms of user value.

Therefore we also started GiftPanda, a reward based shopping app. It is an app that enables users to find the best deal when shopping for clothes, grocery and other products. It will be extended to offline shopping in the future, to help our users find the best deal for their money at any given moment at any given location. That way we will be able to create long time user value and unchallenged advertising opportunities for our customers.

Can you describe a typical workday of you?
I am not the person getting up early, so usually I hit the road around 9am. I am taking my bike to work.
Once I am in the office I say hi to everyone and get a coffee. Next I am checking emails and a few KPIs. After that I usually plan my tasks for the day. Most of the time there are things left to do from the day before, so I try to prioritize.

I am in charge of Finance, HR, our Publisher Asset and Inbound Advertiser Acquisition. So I usually work on one of those things.
I have a meeting with my team in marketing once a week and usually talk with our tech team in charge of building GiftPanda once a day. Plus I really read a lot. Not only about the mobile ad market, but also about startups and bigger companies with products that might influence our business sooner or later.

Aside from that, David, Florian and I just really talk a lot about the industry, our next projects and tasks and where to get new talents for our team from.

Where do you see yourself and your startup ayeT-Studios in five years?
I am not a fan of making any bold predictions. We are focused on building services that create real value for our customers. If we are able to do that, we will be a solid company in five years from. The ad tech market is heavily growing and at the same time consolidating right now, so we seek to find our place in the ecosystem and grow the business to a solid size.

What 3 tips would you give other Start-up founders on the way?
Work on your product first, not on PR:
It doesn’t make sense to try to get the press to talk about something that is not there yet or not quite working as your customers would expect it to. As long as your customers are not signaling you that they love your product and recommend it to their friends, colleagues or business partners, you are not there yet and would waste time and energy on trying to get press coverage.

Hire experience:
You can’t build your company solely on the back of interns and working students. Trying to get people into your team who worked in a similar setup and on similar tasks for two to four years might seem more expensive at first but will most likely create much more value for your company. One employee with experience might create as much as four times the value of a non-experienced employee.

Be persistent:
Success is a trade that is earned. In every company there are up and down cycles. Sometimes in order to hit growth stage for just a year, building a fundament to set it all up will take you much much longer. So just keep your head down and stay focused on improving your product. Not every “No” from a big customer or investor means that you have failed. Keep on working on your long term vision and you will ultimately succeed.

Picture Source: Daniel Möller

More information you will find here

Thank you Pascal Ludynia for the Interview

Statements of the author and the interviewee do not necessarily represent the editors and the publisher opinion again.

Sabine Elsässer

Sabine Elsässer is founder and chief editor of the StartupValleyNews Magazine. She started her career at several international direct sale companys. Since 2007 she works main time as a journalist. While that time she learned more about the Startup Scene, what made her start her own Startup Magazine the StartupValleyNews.

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