An SEC filing indicates that previous backers Foundry Group and DFJ Gotham have reinvested in the company. And CEO Eric Litman says he brought in new investors as well, but he won’t identify them.

He would offer up some basic metrics on his firm’s growth, though: Medialets now has 70 employees, who are working on mobile ad campaigns that average around $150,000 per buy. Most of that comes from “in-app” ads that run on Apple’s iOS and Google’s Android platforms, but there is increasing interest in mobile Web advertising as well, Litman says.

Speaking of that: What’s his take on Adobe’s move away from its Flash standard for mobile devices? “I think it’s an awesome opportunity for Adobe to make lots of money getting lots of people to upgrade their tools,” Litman says.

Is he being flip? Nope, he says — he figures that developers who have been building for Flash will simply move to Adobe’s upcoming Edge standard. “When Adobe comes out with new tools, and it’s a reasonable facsimile of what Flash used to do, all those same developers are going to go out and buy it.”

Here’s an example of what Medialets is selling — a Dunkin’ Donuts ad that ran on an EA Scrabble app for the iPhone:

These come from mobile ad start-up Medialets, which put together a highlight reel at my request. The video doesn’t quite do these things justice, because you really have to see them on Apple’s tablet to appreciate them. But take a look, anyway–it’s probably best if you view these in full-screen mode–and I’ll try to tease them out for you afterward:

Here’s what you just saw:

• FedEx ad, designed for Newsweek app.
• Visa ad, designed for NPR app with help from AKQA, Visa’s regular digital agency. Features e-commerce possibilities, without leaving the app, via Fandango.com and Broadway.com
• Toyota Prius ad, designed for Weather Channel Max app; allows users to “draw” images incorporated into video.

Again, the market for this stuff is so new that shops like Medialets are essentially starting from scratch each time they put together a tablet ad. And that means there’s no reason for these things not to be interesting–you’ve never seen them before.

But eventually some of this stuff will become more standardized, just as most Web ads are. And that will make it harder to stand out.

Latest example: A $6 million B round for Medialets, a two-year-old New York company best known for making “in-app” ads for Apple’s (AAPL) iPhone platform, as well as for Google’s (GOOG) Android, etc.

Existing investor Foundry Group, which led a $4 million A round a year ago, leads this one as well. DFJ Gotham is also in again, and new money includes Dave McClure’s 500 Startups incubator and Chris Saridakis, who until recently was Gannett’s (GCI) chief digital officer.

A good chunk of this deal already closed months ago and leaked out via a Series D filing; I assume that new investors have joined the round since then, but I don’t have details.

August 10, 2010: NEW YORK, NY – Medialets, the most widely deployed cross-platform rich media advertising provider for mobile, today announced the closing of a $6 million Series B financing round led by investor Foundry Group, with participation from DFJ Gotham, 500 Startups and Chris Saridakis. Medialets will use the funds to expand the capabilities of its mobile rich media ad platform and supporting tools in order to bring rich media ads to the broadest range of advertisers possible.

“Medialets was founded in 2008 on the understanding that mobile would unleash a powerful engagement opportunity for advertisers,” said Medialets CEO Eric Litman. “Since then, not only has Medialets enabled the industry’s most compelling mobile rich media for premier publishers, agencies and brands, we’ve also built out a one-of-a-kind cross-platform infrastructure that brings greater efficiency and scale to mobile rich media campaigns. This Series B funding allows us to continue to evolve the Medialets’ platform to meet the phenomenal demand for high-value mobile rich media.”

Since its inception in June 2008, Medialets has pioneered the creation, delivery and measurement of the most highly engaging rich media ad formats for mobile. In 2009, Medialets created and served the world’s first rich media ad for mobile apps. Earlier this year Medialets followed up on the release of its Universal SDK for iPhone and iPad with the launch of Android advertising support, making Medialets the first provider of cross-platform rich media ads for mobile apps. More recently, Medialets introduced Medialets Enrichä, a partner program that significantly reduces the complexity of mobile advertising for buyers by enabling them to deliver and measure the same creative campaign on different mobile platforms and across Medialets’ partner ad networks, mediators and ad servers.

“Medialets has set the standard for creative and technological innovation in mobile rich media,” said Seth Levine, Managing Director of Foundry Group, Medialets lead investor. “By providing a scalable platform that uniquely addresses the challenges of mobile for both publishers and brands, Medialets has staked out its position as market leader early in the game and will continue to be a driving force in the rapidly growing mobile advertising market.”

A world-class executive team, assembled within the past year, has spearheaded Medialets’ tremendous growth. Keith Gelles, co-founder of PointRoll, joined Medialets as Chief Technology Officer joined the team in July and Aaron Mittman, a former executive at Panther Express and DoubleClick, joined the team in September as Vice President, Global Sales. More recently, Andrew Eisele, formerly of TargetSpot, joined Medialets as the company’s first Chief Financial Officer. The executive team is supported by an advisory board that includes Greg Tagaris, former CIO DoubleClick, Andy Ellenthal, CEO Peer39, Ari Paparo, VP Digital at Nielsen and former Group Director of Advertiser Products at Google, Shervin Pishevar, Chairman SGN, and Colin Crawford, former CEO MacWorld/PC World.

In the case of Apple (AAPL), that means reading the new 45-page privacy policy that comes with the iOS 4 update and finding the section about cookies.

Actually, you don’t have to do that–iLounge already highlighted it for us:

Apple and its partners use cookies and other technologies in mobile advertising services to control the number of times you see a given ad, deliver ads that relate to your interests, and measure the effectiveness of ad campaigns. If you do not want to receive ads with this level of relevance on your mobile device, you can opt out by accessing the following link on your device: http://oo.apple.com. If you opt out, you will continue to receive the same number of mobile ads, but they may be less relevant because they will not be based on your interests. You may still see ads related to the content on a web page or in an application or based on other non-personal information. This opt-out applies only to Apple advertising services and does not affect interest-based advertising from other advertising networks.

So that’s pretty much the same tack that Google (GOOG), Yahoo (YHOO) and other big Web ad players (not Facebook, though) have taken to ad targeting and privacy: If you don’t want to see targeted ads, you don’t have to see targeted ads. But you’re still going to see ads. And figuring out how to opt out of targeting will take a little bit of doing (here are the opt-out pages for Google and Yahoo, which they describe as ad “managers”).

Note that this deals only with Apple’s homegrown ad network, not third-party outfits like Medialets or Millenial Media. Then again, Apple isn’t giving the biggest mobile ad network, Google’s AdMob, access to targeting data at all.

As others have noted, Apple’s same privacy policy doesn’t give iPhone users any choice when it comes to location data on their phones–it is tracking their location and reserves the right to share it with “partners and licensees.”

Whether or not that creeps you out likely depends on your attitude toward services like Facebook, Foursquare and Twitter: If you spend your time broadcasting your status to the world, it’s hard to get riled up about Apple keeping tabs on you, too.

But if you’re a private soul, Apple offers this promise: “This location data is collected anonymously in a form that does not personally identify you and is used by Apple and our partners and licensees to provide and improve location-based products and services.”

Feel better? Okay, how about this–Steve Jobs at D8, promising to protect users’ privacy:

We’ve always had a very different view of privacy than some of our colleagues in the Valley. We take privacy extremely seriously. That’s one of the reasons we have the curated apps store. We have rejected a lot of apps that want to take a lot of your personal data and suck it up into the cloud.

Privacy means people know what they’re signing up for. In plain English, and repeatedly, that’s what it means. Ask them. Ask them every time. Make them tell you to stop asking if they get tired of your asking them. Let them know precisely what you’re going to do with their data.

That’s a pretty straightforward, simple proposition, much more so than Apple’s confusing legalese. If Apple really wants to appease privacy worriers, the company ought to update its policy with words that sound like the ones Jobs spoke earlier this month.

Full text of AdMob boss Omar Hamoui’s response is below. But there’s not a lot more to it than that. What else can he say?

Hamoui notes, correctly, that Apple’s policy will limit the choices of the developers it is trying to woo to its platform: They’ll be able to use Apple’s iAds and ads from independent ad networks, but not from the biggest player in the market.

And since the point of iAds, per Apple (AAPL), is to make money for its developers–Steve Jobs says the ad business won’t be meaningful for his company’s P&L–then you’d think he would want as much choice as possible. But as I’ve noted before, Apple has repeatedly limited choice–and revenue–in pursuit of other goals. So this can’t be a total shock.

Apple’s new policy may also dampen investment in the mobile-ad business, or at least parts of it. Since Apple is allowing only “independent” ad companies to transmit data, it makes it a lot harder for those companies–Greystripe, Millenial, and Medialets, for starters–to sell themselves to big mobile players like Microsoft (MSFT), Research In Motion (RIMM), Palm (PALM)/Hewlett-Packard (HPQ), etc.

But it may be hard for Google (GOOG) and AdMob to get to worked up about Apple’s policy, since Apple has already done them a huge solid. The company’s entry into the ad market helped persuade federal regulators to bless Google’s $750 million purchase of the mobile ad network, a deal that appeared to be in jeopardy for quite some time. Steve Jobs giveth, and Steve Jobs taketh.

Mobile advertising and the iPhone
June 9th, 2010

Apple proposed new developer terms on Monday that, if enforced as written, would prohibit app developers from using AdMob and Google’s advertising solutions on the iPhone. These advertising related terms both target companies with competitive mobile technologies (such as Google), as well as any company whose primary business is not serving mobile ads. This change threatens to decrease–or even eliminate–revenue that helps to support tens of thousands of developers. The terms hurt both large and small developers by severely limiting their choice of how best to make money. And because advertising funds a huge number of free and low cost apps, these terms are bad for consumers as well.

Let’s be clear. This change is not in the best interests of users or developers. In the history of technology and innovation, it’s clear that competition delivers the best outcome. Artificial barriers to competition hurt users and developers and, in the long run, stall technological progress.

Since I started AdMob in 2006, I have watched competition in mobile advertising help drive incredible growth and innovation in the overall ecosystem. We’ve worked to help developers make money, regardless of platform–iPhone, Android, Palm Pre, Blackberry, Windows, and others. In the past four years, AdMob has helped tens of thousands of developers make money and build real businesses across multiple operating systems.

I’ve personally worked with many iPhone app developers around the world, including one who created a fun and simple game in the early days of the App Store. He built the app because he was interested in the challenge. He built this single app into a multi-million dollar advertising revenue stream with AdMob, hired a whole team, and turned a hobby into a real business.

We see these stories all the time.  We want to help make more of them, so we’ll be speaking to Apple to express our concerns about the impact of these terms.

Omar

Backstory: Apple’s original license agreement, released in April, appeared to effectively ban third-party ad networks from selling “in-app” ads on its gadgets by crippling their ability to track user data. In the absence of any clarification from Apple (AAPL), it seemed to me (and others) that the company was set on locking up its platform from advertising competition.

But last week at the D8 conference, Jobs either changed his stance or spelled it out, depending on your perspective: Apple wasn’t interested in banning rivals to its iAd platform, he said, it just wanted to cripple third-party analytics companies like Flurry.

And yesterday, Apple changed its legal language to reflect Jobs’s words. Here’s the revised language for section 3.3.9 of Apple’s developer agreement, concerning the use of data collection:

3.3.9 You and Your Applications may not collect, use, or disclose to any third party, user or device data without prior user consent, and then only under the following conditions:

- The collection, use or disclosure is necessary in order to provide a service or function that is directly relevant to the use of the Application. For example, without Apple’s prior written consent, You may not use third party analytics software in Your Application to collect and send device data to a third party for aggregation, processing, or analysis.

- The collection, use or disclosure is for the purpose of serving advertising to Your Application; is provided to an independent advertising service provider whose primary business is serving mobile ads (for example, an advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple would not qualify as independent); and the disclosure is limited to UDID, user location data, and other data specifically designated by Apple as available for advertising purposes.

If you compare and contrast to Apple’s earlier version, you’ll see the message is clear: It’s okay to collect user data to help sell ads–though you will need to get Apple’s permission to do so.

UPDATE: One important caveat here: It appears as if Apple may still be limiting its biggest potential rival–Google’s AdMob. Note the language about only allowing “independent” ad-serving companies to collect data: “For example, an advertising service provider owned by or affiliated with a developer or distributor of mobile devices, mobile operating systems or development environments other than Apple would not qualify as independent.”

Google (GOOG) certainly qualifies as a developer/distributor of mobile operating systems, right? The language also appears to disqualify potential rivals–if, for instance, Microsoft (MSFT) tried entering the mobile display market. I’ve asked Apple for comment, but I’m not expecting any.

Meantime, Apple’s language does appear to be good news for smaller competitors like Greystripe, Millenial Media and Medialets–though it may make them less attractive to potential acquirers

Here are Jobs’s own words on the topic last week at the D8 conference.

]]> http://allthingsd.com/20100608/apple-makes-good-on-steve-jobs-promise-invites-other-advertisers/feed/ 0 http://allthingsd.com/20100317/another-iphone-ad-that-asks-you-shake-it-up/ http://allthingsd.com/20100317/another-iphone-ad-that-asks-you-shake-it-up/#comments Wed, 17 Mar 2010 14:21:07 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=17487 Mobile advertising is growing fast, but it’s still a small business. Even if you use your smartphone a lot, you may not encounter a whole lot of ads. And even fewer interesting ones.

So here’s one that just started running: A campaign for AMC’s “Breaking Bad” series that’s running on iPhone apps for CNN and NPR.

The video below should give you some clue about how the ad, produced by mobile marketing start-up Medialets, works. But in case you can’t tell, the idea is that you click on a small banner ad, which turns into a mini-app that lets you “mix your own chemicals” and eventually lets you watch a trailer for the series (about a chemistry teacher turned meth dealer) or buy an episode via Apple’s (AAPL) iTunes.

If you follow mobile marketing, this might seem familiar. Last year, Medialets rolled out a campaign for Dockers that asked users to shake the ads. And earlier this year, the firm rolled out a campaign for Vampire Weekend’s new album that asked users to shake the ads. At some point, the novelty factor for this stuff will wear off.

Meantime, it’s still going to be new for most users. If you’re really into this stuff and you live in New York, stop by Apple’s Soho store Friday, where the show’s creator will be promoting the show and the app ads.

]]> http://allthingsd.com/20100317/another-iphone-ad-that-asks-you-shake-it-up/feed/ 0 http://allthingsd.com/20090624/1-million-palm-pre-apps-downloaded/ http://allthingsd.com/20090624/1-million-palm-pre-apps-downloaded/#comments Wed, 24 Jun 2009 18:28:49 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=20169 Well, here’s a nice data point to consider in advance of Palm’s earnings tomorrow. The company’s Pre App Catalog, which has been widely criticized for its paltry selection, just reached one million downloads.

Not bad for an app store that launched with just 18 applications and currently boasts only 30. Think of how many more downloads there might have been, if the company wasn’t so maniacally selective in its distribution of the WebOS SDK.

“Just 18 days after the launch of the Palm Pre, their App Catalog has hit its first major milestone, 1 million downloads,” reports mobile analytics outfit Medialets. “On launch day, Palm sold 50k devices and their App Catalog experienced 100k downloads–that’s an average of 2 apps downloaded per device and 5,500 downloads per app (with a low of 600 and a high of 20k). 18 days later and they’ve tripled the user base to 150k units, averaging 6+ apps downloaded per device and 33.3k downloads per app (with a low of 2.4k and a high of 114k).”

Now, granted, Palm’s (PALM) one million downloads in 18 days doesn’t even begin to approach the performance of Apple’s (AAPL) iTunes App Store, which reached a similar milestone in about a day. But as Medialets notes, it’s not really fair to compare the two. “The App Store hit the 1 million download point about 17 days earlier than the App Catalog, housing more than 16x the amount of apps and was accessible by more than 26x the number of devices than the App Catalog,” the firm says. “Still comparing at the 1 million mark, the average Palm Pre user had downloaded 26x the number of apps that iPhone users had, and the average app in the App Catalog experienced 16x the number of downloads that apps in the App Store had experienced.”

]]> http://allthingsd.com/20090624/1-million-palm-pre-apps-downloaded/feed/ 1 http://allthingsd.com/20090512/7278/ http://allthingsd.com/20090512/7278/#comments Tue, 12 May 2009 09:00:35 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=7278 Apple iPhone and iPod Touch users have downloaded one billion apps for their devices in nine months. Someone other than Steve Jobs and co. ought to be able to make money from that, right?

That’s more or less the logic behind Medialets, a start-up that serves up ads on Apple’s (AAPL) mobile applications, and to a lesser degree, programs designed for Google’s (GOOG) Android mobile platform. The New York-based company, founded last June, is announcing a $4 million Series A round led by Foundry Group. DFJ Gotham and angel investor Bobby Yazdani also participated.

Medialets also provides free analytics services for mobile applications. But its revenue comes from its mobile ad platform, which specializes in serving up iPhone and Android app users.

Given that mobile ads in general are in their infancy, this is a nascent market at best. Medialets CEO Eric Litman figures that the market for mobile display ads tops out at perhaps $300 million, and that ads for iPhone and Android apps can’t be more than $100 million.

But he figures that number will shoot up rapidly, of course, and perhaps hit $400 million within four years. He’s also betting that the majority of apps, and the majority of apps downloaded, will be free, advertising-supported ones.

In order for that to happen, both apps and the ads that run on them will have to move past the novelty stage. This Medialets-produced ad for Dockers, shown here running on SGN’s iBowl game, is sort of interesting. But it seems more like a proof of concept than anything else.

Still, it’s a start:

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