With more than 730,000 mobile applications available for download from Apple's App Store, it's more challenging and expensive than ever for developers to grab consumer attention. W3i, a developer monetization and distribution network, reports that the average cost of acquiring new iPhone and iPad users grew in the first half of 2012 from 59 cents to 92 cents per install--a 56 percent leap in just six months. W3i credits the hike in part to increasing promotional efforts from deep-pocketed players like Japanese social gaming giantDeNA--companies with marketing muscle that small, independent developers simply can't match.
Chartboost thinks it has the answer to the dilemma small developers face. The San Francisco-based startup's platform enables developers to cross-promote their mobile games via interstitials (customizable, full-screen ads that pop up at launch or between game-play sessions), integrated into other titles in their catalog or into higher-profile games built by other firms. Chartboost users can cross-promote their own games for free. Each interstitial is seamlessly integrated and designed to minimize disruption of the user experience.
"We're a technology for developers to own their distribution power and use it across their games," says Chartboost co-founder and CEO Maria Alegre. "Now you can leverage your portfolio of games every time you launch a new game. You can have Zynga's reach even if you're just two guys in a garage."
Alegre and CTO Sean Fannan launched Chartboost in 2011 after a stint at Tapulous, the developer behind the iPhone music-discovery game series Tap Tap Revenge (acquired in 2010 by The Walt Disney Company). The original Tap Tap Revenge was one of the App Store's earliest breakout hits, spinning off licensed sequels spotlighting Justin Bieber, Katy Perry and Lady Gaga. Tapulous leveraged each title to promote other games in the franchise, an approach that directly inspired the Chartboost model.
"Once we discovered the power of [Tap Tap Revenge], we started getting amazing artists and amazing music," Alegre says. "We were able to manage our distribution power and connect all these games in one network."
Not all Chartboost clients have large game catalogs--those just getting off the ground can connect with other publishers via Chartboost's Direct Deals Marketplace, which plays matchmaker for developers looking to buy and sell interstitial inventory. Publishers can specify the location and frequency of each interstitial campaign and filter out games they don't wish to promote; Chartboost also supplies analytics that detail impressions, clicks and installs.
Developers bill Chartboost advertiser partners on a cost-per-click or cost-per-install basis, determine the terms of each Direct Deals agreement and collect 100 percent of the proceeds on inventory sales. Separate from Direct Deals Marketplace, Chartboost also helps publishers sell their remaining inventory, claiming 30 percent of revenue.
"Chartboost is not a mobile ad network--we don't do advertisements from consumer brands," Alegre explains. "We're about games using other games to promote their products."
There are now 7,000 mobile games across the Chartboost platform, reaching 105 million unique users in 100 countries and serving 4 billion game sessions per month. Publisher partners include Gameloft, Kabam, Booyah and TinyCo. In October 2011 Chartboost (which has been profitable since last year) raised $2 million in Series A financing from investors including TransLink Capital, SK telecom ventures and XG Ventures.