GOAT: Paul Bowen on Ad Network Wars & Future of UA

Hello. Hello. So we are in another uh podcast gaming on air today and we call it as goats and we invite goats. So here we have today uh Paul Bowen and he's another uh person that actually does not need intro at all. Uh we know him from stream elements right now but also like uh he is in the industry like since I think 2000 like literally. So uh guys be careful. Welcome Paul. Hi. Oh my good to be here. Very glad to be here. So concept wise uh I would like to know more about yourself like fully out of curiosity. You know it's been actually more than uh 20 years in the industry like how how was the uh beginning for you and how was it shaping up? Could you like you know uh picture it? Yeah, I mean I was very lucky to get into digital and and online relatively

early, I guess you could say. Um, so I started working for a online media buying agency back in 2002, uh, which was just after the com crash. Things were starting to rebuild after the com crash. And I kind of luckily got got into one of the only digital uh, media buying agencies in London. did that for a year, decided that I didn't really like the the marketing side of things, the buy side, uh, and then switched over to the sell side. Everything at that point was was desktop. All all advertising was kind of in digital was really web marketing. There was no mobile at that point. So yeah, I kind of found this new world of digital advertising. It really wasn't anything like it looks like today. Everything was very nent. Although some of the networks that still that exist are still around today. I mean obviously Google probably the most the most notable but you know there was no Facebook there was no Tik Tok at that point that was before all those networks

and um my career has been one of mainly working for kind of ad networks I guess you can say so first firstly um web ad networks so I've worked at three or four of those and then in 2010 I made the switch over to mobile which was a just very opportune time to do that because the iPhone launched I think it was in 2008. I think the app store launched in 2009. So a year after kind of the app store launched um game devs were building fast very in a very quick way building games for the the app store and there was just this burgeoning ecosystem of new content that was available to to be monetized and new eyeballs. I'd say kind of the the stroke of luck for my career if I look back at it was kind of pivoting from from web to mobile very very early on and making a lucky bet I guess guess you could say on that platform because I don't think everyone at that point knew how big mobile was

going to get back in 2010. Yeah. And then since 2010 I've worked at various ad networks. So Unity Bungle Liftoff and now stream elements. Um I my original role in mobile was at Tapjoy. I was the uh I I started the European office of of Tapjoy who are now, you know, part of Unity and have fallen a little bit from where they were back in in the early 2010s. They were they were a real force in in user acquisition on mobile. Anyway, that's a a brief summary of my career, but uh yeah, happy to dive in on on any any kind of specific area. Yeah, that's that's solid. And actually like concept wise in the podcast before diving in like specifically to a hot topic. I also would like to know a bit about you like especially for the audience as well like when we see you everywhere but like actually who is Paul like what are you doing like you know overall? Yeah. So I live in Seattle. I have a wife and three kids. Most of my time is spent either working or looking after my kids. Outside those two uh I do

quite a bit of yoga. I'm I'm pretty much into that. Yeah. I mean that's that's kind of me. I study maths at university 25 years ago and I'd say that kind of informed a lot of how I view how I turn up to work every day. So I'm kind of very data driven and very logical in my thinking. Um although the every role that I've done has kind of been a revenue role. So working on that kind of the person personable side of things is is kind of where I've been focusing my attention over my career. just making sure that I am, you know, have the brand as well as the the uh rigorous thinking behind kind of owning a revenue team. But yeah, that's kind of that's kind of in a in a brief note who I am. Yeah, that's that's cool. like getting back to uh specific shots like you actually well depicted how like it transitioned from web to today but actually we saw so many major things like I'm not even talking about mergers from applovin unity and

like today's world we have been seeing this rewarded user acquisition networks rise especially we were kind of close with you on that hot topic as well and many more things are happening like what would you say like first about the transition in like these let's say last 5 to 10 years and second one would be coming to today and you know getting the flow free shot yeah I mean so if we talk about mobile and kind of the trends that we've we've seen there I mean there was emergence of a bunch of different types type of um well firstly different types of content I guess so different types of games and they've matured quite a bit and actually what we've seen is quite a convergence towards a number of different game types. Although I think more recently we're seeing more innovation in game types mainly driven by the removal of IDFA from iOS. I think that has really allowed new content types to thrive. But on the network

side, you know, we had the traditional ad networks like Quattro and iPads um and a lot of those have now either been acquired or or or been um gone out of business. Apple stopped offering IAD and now offer Apple search. But I think if you look over the last five years, most of what's driven the change has really been um well two things. One, consolidation on the ad network side and then to the removal of IDFA. Um and I think that has led to a significant amount of consolidation in the more traditional ad format. So ad app is effectively in monopoly right now on mobile. There it is obviously Facebook and Google they have their wall gardens and and Tik Tok as well but if you look at kind of the ad network side there's apploving and then more more recently we have this reemergence I guess of this incentivized space which I find particularly interesting and I find probably one of the biggest areas for for kind of innovation within the ecosystem that we see. Yeah. So I think

that's kind of some of the trends that I'm seeing and really it's been driven by a lot of consolidation. Yeah. and mainly really driven by AppLeven's success on on its mediation platform. They were just incredibly successful and that has led to a lot of companies either closing their doors or or being acquired because they can't compete in that space. Um so yeah, I think we're kind of left left with I really see three three areas of innovation right now in in mobile UA. One is kind of the ad network side, one is um well one is kind of the traditional ad formats, one is like the OEM space which is you know mainly on and Android and then lastly is kind of the incentivized space. Yeah, that's how how I characterize the last maybe 5 years of of mobile user acquisition and uh basically we still keep up this current trend for 25 as well. Obviously like there looks like no uh major change for now, right? Yeah. Yeah, I mean I think the next, you know, as I when I

was kind of describing my career, I think the big change for gaming really was like the mobile platform. Web gaming had been existing for quite a long time. You know, there was downloadable games. They were they were the big thing in kind of like the the mid9s through to 2010. There was 15 years of web games, but they didn't really explode like they did on mobile. I I think the question for game developers is what what's the next platform? And I don't think we know quite what that looks like yet. I don't think it's clear that there is another platform um that will emerge anytime soon. You know, the mobile devices is especially unique you carry around with you all the time that people spend ridiculous amount of hours on every day. I'm just not clear that there's another platform that will ever exceed that level of kind of engagement. And if it is, it'll be plugged into our brains or something like that. Yeah. So, I think if we think about

what's going to happen to the mobile ecosystem, I mean, you know, the past few years, game developers have been exploring going back to web just because there's more of a blue ocean there than the red ocean of mobile. And that includes kind of payments. So an emerging emerging segment of kind of the ecosystem is web payments and web distribution and things like that. But I don't think it's clear what's going to happen to mobile. I think it's it's a very mature market right now. Uh and I think I don't think it's clear um apart from game developers continuing to innovate on content and game type. Not sure what's going to happen in terms of real kind of exponential growth again. I think we're in kind of singledigit growth a year. not you know double digit and more growth a year at this point. Yeah. So so true actually especially since the beginning of last year we have always been hearing this let's call it just CPI issues like everyone is

complaining and you cannot cover that much from the admonization aspect as well. So like same issue for everyone excluding like big IP games like Supercell, Dream Games because they like basically broke broke it via APS but when we come to UA it's anyway expensive. So actually I wanted to like ask you a bit deeper about this incentivized networks or like rewarded platforms because the transition has been big over there and today it's even like evolving. I won't call maybe every week but every month we see some uh like some change. How do you feel especially for the last I don't know six months maybe? Especially yeah I mean incentivize has been around for a long long time. I think it started in Korea on web. I used to I used to work for a company called Super Awards that did incentivize ads on Facebook canvas back in 2009 and that was really centered around virtual currency. So play playing

Farmville on Facebook you can earn virtual currency. So this model has been around for for quite a while. I think the emergence of misplay and the model of playing games for gift card completely changed the game for this kind of space. It kind of removed quite a few barriers that existed in kind of the virtual currency reward space. So you didn't necessarily need to work with third party publishers to to gain supply. You could gain supply by doing user acquisition on Facebook and Google and you could kind of gain an audience through that that and so what we see is a lot of companies trying to copy misplay. The good news for those companies is it's not that hard to copy misplay. Um, you know, you can you can connect yourself to a gift card API, onboard a bunch of advertisers through, you know, there are a bunch of third party services that offer advertisers offers through API. You basically spin up a business within a couple of weeks. And that's what we've been seeing happening. A bunch of companies just getting funded or just doing it bootstrap. The low barrier to entry has

seen a bunch of entrance in this space. very similar to kind of what we saw early in mobile with a bunch of ad networks getting early into kind of monetization and UA. Um I think this space is less defense even less defensible than that space. I think the gift card reward space is is a tough space to be in. I think it's a great space because it's growing right now. But um my sense is there's only a certain number of players who are willing to uh play games in exchange for gift cards or or or that that's their primary motivation. You know, I don't know how many the total addressable market for like people who are prepared to respond to an ad on Facebook saying earn gift cards. I know that wouldn't be that wouldn't be kind of my you know the primary reason why I wanted to play play a game. So I think that's kind of my concern on the space. I think it has to mature quite a bit. Um potentially different um use cases for where you apply these offer walls. I guess you could say there was a virtual currency

one originally. I'm sure there's lots of different types of way of gaining customer loyalty or or gifting money in some way that that you could apply this business model to, but the gift card reward model doesn't feel to me like a particularly defensible one on its own. But yeah, it's a very it's a very interesting space because we've just seen so many companies emerge in this in this space over the last couple of years. And actually like for current uh markets over there, how would you you know summarize with maybe one word kind of like not sustainable or maybe already consolidated, you know, how do you see for the future of it? Yeah, I think we're going to see significant consolidations in this space. I think I think there are significant questions about the incrementality of a lot of these networks. As I mentioned, the audience of people especially in the US, but let's say tier one countries who are interested in playing games in exchange for gift

cards. I don't think that's I don't think that's you know hundreds of millions. And I think so my question is like who are doing these who who are who are actually engaging with these apps? um and are they just moving from one to the next and therefore is this are these installs incremental or are they duplicate these are also reasonably savvy people the people who are engaging with these products they kind of understand that um you know you can go from one to the next you can obiscate your IP address and you can keep doing the same offer on multiple platforms if you go on Reddit you see a bunch of people discussing kind of how you can farm farm money from these gift card rewards So my sense is there's going to be considerable consolidation across these platforms. Um and as I said, I think probably the next step is where else does this model apply? I mean for stream elements, we we allow users to support their favorite creator in exchange for taking offers. They also get paid paid an amount as well in gift

cards. So we do a little bit of the gift card side but the main motivation for us is for the users is earning uh you know supporting their favorite creator. So like that's one application. Um you know loyalty schemes are another application. So you know you know my uh Chase points could I earn Chase points by taking offers? So these are kind of other applications. I don't think they're as scalable or as quickly scalable as the gift card reward space. So I think we're going to see we're going to see continued competition in that space and consolidation and then at that point maybe some companies will start investing real resources in going outside this kind of gift card reward space. But it's a very interesting one for now and I I still think there's innovation even on the product side in this space over the next couple of years. Actually while chatting with you Paul I just realized that there are similarities between like the transition of rewarded networks like incentivized networks and hyper casual to hid casual.

You know in the beginning it was hey golden era everyone should do hyper casual very quick just double your money invest in like so many players so many publishers studios etc. focus on there and the competition going up and up and consolidation was there and basically they found new ways to change it to as we chatted like hibbit casual etc. So I think we will see many more of those maybe M&As or new trends, right? Yeah, I think they they both had I think the commonality between Hyper Casual and and this and this um play and earn gift card reward space is the low barrier to entry. Hyper casual it was just a very very simple game. The low barrier to entry meant that anyone with a any game developer with a Unity account could spin up a Hyper Casual game within a couple of days. And it's very similar on the on this gift card reward side. Um so yeah I I think playing mature is going to be different but yeah both spaces well hype casual has already matured

into hybrid casual and I think ultimately there's kind of pipeline there from players from hype casual to hybrid casual to casual and I think we'll see something similar on the on the incentivized space side as well for sure. That's that's actually a clear answer and I actually want to like since uh you are um expert more on the ad network ad tech side I actually would like to again out of curiosity first question could you check the latest updates on applin yesterday and today the the news um yeah I mean I think I think um well firstly if you're a short seller if you're trying to so the news is that App Levin was accused of committing fraud um of autod downloading apps onto the device which is impossible to do on iOS. There is kind of a there's kind of a way to do it on Android but you still need a user still needs to prompt the download. Um I

mean they were accused of fraud by short sellers have a motivation to try and drop drop the stock price. I think I think there are valid questions to ask any ad network around how they leverage attribution which was a part of part of the accusation as well. I think I've seen over my career attribution being used quite liberally in terms of when you fire a different um well normally the click through the click for an event. So you know often networks will fire that when when a user views a views an ad versus when they click on the ad. We've been through this many times on mobile. This is not the first sign that uh this question of when when are different um attribution events being fired by networks. If app 11 are doing it, they're not the only ones. I've been at multiple networks that have been more liberal, I guess you could say, with with attribution. I don't think it will impact um apploven over the long term. I don't it doesn't look like the authors of the of the report think fuzzy panda research. Fundamentally, I don't think they understand the apploving business

or mobile UA. um you know there is an incentive for user acquisition managers to be liberal with attribution. They want to claim credit for their camp as much credit as they can for their campaign. So there's this tension between making sure attribution accurately reflect the performance of the campaign with the fact that user acquisition managers want to make sure that they can claim as much credit as they can for for their work. So yeah, there are tools out there that measure incrementality. They're not as widely used as they should be. I don't think most game devs are are currently only really using their MMP attribution as their methodology for understanding attribution. And I think this is a another good wakeup call that more developers should be using incrementality measurement to be able to understand the true value of their of their um of their campaigns. I think you know app loving will be fine. This is not this is a storm in a key teacup uh

as we say. Yeah. And I I think um it's fundamentally a misunderstanding of of what what the mobile UAE ecosystem is. And you know, we were talking we were talking about kind of this gift card space and relating it to that. You know, I'm not sure how much how incremental some of these solutions are on top of each other. Now, you could say, well, it's um, you know, a user churning through different products and and taking the same offer on five different products is fraud. I mean, they just don't have they don't have visibility into what people are doing on other platforms. So, it's not it's not it's not fraud. It's just um an incomplete ecosystem. It's an ecosystem that continues to need to mature, but no measurement is perfect and no and no solution provider is perfect either. very well depicted actually like the conversations discussions were going

on hot today and like I checked almost all LinkedIn posts also like major news from big media companies and like what I realized it separated the ecosystem to two basically like one view is hey yeah like it is like all the ad networks are the same and like uh this shady thing is always same like one one side is that and the another side is hey guys like use MMP check it and make it solid like uh and it's over there as long as it's like keeping things open for you trying to do transparent things should be just fine so that that was actually very interesting because as you mentioned not every developer or studio is aware of it and I think like MMP is literally a must over there. Yeah, I think I think the truth between those two positions is kind of in between that um definitely the networks try to be as aggressive as claim for claiming credit for their uh for their traffic, I guess you could

say. Also on the on the buy side, I think um I always think buyer buyer beware. the I think the user acquisition managers have to ask the right questions and I think making sure that they understand exactly what they're doing on every network is is crucial. So yeah, I think the truth is somewhere in between and as long as as long as the buyer is clear on kind of what they're getting and then two parties that have a contract then I think it it doesn't really m you like I don't think the short seller really understands whether the buyer knows what they're getting or not. They're just telling they're just telling the market this is wrong. But you know if the buyer agrees to what they're getting then there's nothing wrong about it. Exactly. It's kind of like when back then when I was first in the industry like I was questioning okay like when we use for example max mediation they are kind of prioritizing their ad network. How is it? Wow how does it look? I was trying to like understand where can I see their

algorithm you know like basically the code which one is first etc and actually most of the answers are not available to you it's like not not that open so then I just stopped questioning it yeah I mean I I was reading an article on on someone who wanted to understand how applovin's axon worked because they wanted to essentially verify it these are blackbox algorithms they are incredibly sophisticated the engine the ML the data scientists who create them don't even really know how they work expecting them to publish something that a human could understand ultimately you put your money in as long as your kind of attribution is set up right if you get out the results that you want then you kind of have to be okay with that you can't they're not going to give you an explanation of how an algorithm works and I think I think buyers are now more comfortable with that I mean Google and Facebook have been doing this for years no one's asking Google and Facebook to to to explain their algorithm to anyone. I think it's these small smaller

networks, smaller in in kind of air quotes because app's huge now. But um when they transferred to kind of more manual bidding to more algorithmic bidding, everyone wanted an explanation for it. I I remember it back at Unity in like 2016 17 when I was there. you know there's no real explanation that you can give that will well firstly there's no explanation you can give and even if you could give one it doesn't really matter because really m what really what matters is the outcomes that really is how you how you're uh graded yeah especially when I was like chatting with so many publishers mostly from Turkey I was asking like are you testing the mediations how's it going etc like the answer was always yeah we tested and like the ones actually most of them like are using the max already and like basically the answer as you mentioned hey like we are using MMP and as long as it's uh profitable and solid we don't care much and yeah

the uh move from waterfall from the waterfall mediation to kind of the header bidding solution has has kind of taken all of those conversations away like there's a there's very little you can do in terms of management now so it's it's almost just set it and forget it now and and so we're not really having that conversation And I think we're there on the on the UA side as well. The the algorithm has won and humans are just kind of just set it and forget it kind of thing. Yeah, I think the question that this app report was questioning was more really on kind of the attribution side a little bit and then also on this they were accused of directly downloading apps onto the device which as as I mentioned that's that's not even possible. So um yeah anyway and like basically I of course we we should also wrap it up slowly but like I I would love to finalize it connecting it to you know earlier we were chatting about applian monopoly in the current market and like now we saw this report how would you you know like just bring them together and maybe comment about this year how how would it

shape up the close future how how would I what are the so the question what are the trends for the rest of the this exactly including what we see in this report would it affect and how is the appliven monopoly and like yeah I think appli will continue so I don't think this report will affect apploven at all I think appli's own uh I mean monopoly it's not really a monopoly because Facebook and Google are out there and as long as they're out there and and Tik Tok I guess you could say to a lesser extent um then there are yeah it's not a monopoly but it definitely is a monopoly for kind of or it feels like more of a monopoly a monopoly for third party monetized content which is obviously what what appli focus on. I can see appli continuing to take well firstly they'll continue to dominate the mediation side of things which gives you all the data you need to own the user acquisition side of things if you have the right algorithm. Looks like they have that. So I could I I see them continuing to take share from Unity and

and from others and and continue to win in kind of the the mobile the gaming UA space. I think there are questions about what they do on the ecom side. But I think the question for publishing publishers is is what Appli's dominance in in kind of the the monetization space. What does that mean for their earnings? because Appli now has an incentive to grow their revenue. So will they continue to take more and more margin? So I think that's one of the questions. One, what happens to the other networks that are in the Max mediation? And two, what does it mean for game pub gaming publishers who are monetized through Max? I think more and more ecom in in the space is going to be great but do margins decrease because apply needs to grow first piece and then yeah I think I'm especially interested on the the rewarded incentivized rewarded side of things that we were discussing. I'm very curious to see what happens with misplay

the they're the launching an iOS product what that's going to look like what's going to happen with the other companies that are kind of competing at the top of the incentivized space. um incredibly interested to see what happens with measurement and attribution in this space, fraud. Um so yeah, I think that's for me that's the other big question of this year on kind of the ad network side and then yeah, I'm just very excited to see what happens on the content side. We're seeing lots of or emerging genres I could I guess you could say coming out of more of the casual side of things. So I think it's nice to see a little bit more innovation on the gaming content side as well. Yeah. Yeah. So, I think that's they're kind of some of the trends for the rest of this year. That's that's very well said, Paul. Like this podcast has been even my expectations were super high and like it's still above my expectations. So, like really happy to make this conversation with you. What would you say uh to the industry? Final words. I'd say keep innovating. I think we went

through I think up till I think we were in a period there of of a lack of innovation coming up until kind of co and I'm excited to see now we have kind of version two of mobile and gaming and and I'm excited to see kind of what what what what AI especially does for innovation. I think the barrier to entry on all tech has been lowered with with kind of the AI that we have now available. I think we're going to see a lot more exciting and new innovation in the space. So, keep innovating. Keep innovating.