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Quattro veterans launch Adelphic with $2 million and visions of delivering more relevant mobile advertising

Posted by Scott Kirsner  March 13, 2012 08:01 AM

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Can mobile advertising be redeemed?

Most people have gotten pretty good at tuning out the ads that intrude on apps and mobile websites, in part because they're not well-matched to what you're doing. (Unlike, say, Google's textual ads that use your search terms to try to intuit what's on your mind.) A new Lexington start-up, Adelphic Mobile, hopes to try to grab your attention — and make mobile ads more valuable for publishers, marketers, and app developers — by delivering more relevant messages.

The company is coming out of stealth mode today with $2 million in funding from Waltham-based Matrix Partners, and a trio of veterans of Quattro Wireless on its team. That company was bought by Apple in 2010, and its product became Apple's iAd system, which delivers ads to many apps distributed through the iTunes Store.

"We're living through the hangover from the first generation of mobile advertising," says Jennifer Lum, Adelphic's co-founder and CEO. "The device is personal, and it's location-aware, but if you look at the click-through rates of mobile advertising and the performance stats, it's not where it needs to be." Lum's co-founder, Changfeng Wang, is also a Quattro veteran, and earlier in his career he worked for Enpocket, a mobile marketing start-up acquired by Nokia, and Engage, an Internet advertising company that was part of the CMGI empire in Andover. "What's missing in the mobile advertising space is so clear," Wang says. "Advertising is about sending the right message to the right audience at the right time, and that's not really happening in mobile." The third Quattro alum at Adelphic is Joe Grabmeier, the company's chief financial officer.

The company hopes to make mobile ad inventory more valuable for publishers and app developers, in part by better understanding the user's recent activity, the device they're using, where they are, and the content they're currently interacting with. "Right now, it's very hard to purchase advertising at scale that let's you reach, say, males carrying an iPhone 4S at 9 a.m. in the morning, in a major metro area," Lum says. Mobile advertising availability — what those in the industry call "inventory" — is growing at "explosive rates," Lum says. "But the agencies and marketers buying that inventory need to be able to do so in a way that makes sense."

"For each ad impression, we know who the user is and what he's looking for, and we make real-time decisions in serving the right ad," says Wang, adding that the decision-making process for marketers would include how much the publisher or app developer is charging for that particular impression, and whether that price makes sense relative to what others are charging. Wang notes that the same cookie mechanisms that work for tracking users on the web for the purpose of delivering ads don't work with mobile ads. "We see a lot of the big ad networks putting a lot of resources into solving this problem, but few are getting traction," Wang says. "It's a very hard problem to solve."

The company began a private beta test last year, and is now beginning to promote its Predictive Data Platform more broadly to advertisers, agencies, and media owners. Lum says Adelphic's employee base is still in the single digits.

Antonio Rodriguez from Matrix is joining Adelphic's board. "I met Jen after she left Apple. This was an idea that checks all of my boxes: technology is at the core of it, and it's a company that can be built in Boston. We did a seed round last May, and they've been heads-down since then, not to create buzz or be in stealth, but just to finish the plaftorm."

In addition to Matrix, Adelphic's backers include Project 11 Ventures and MocoSpace co-founder Justin Siegel.

Lum has been busy since leaving Apple: she's not just running Adelphic, but also making angel investments (as Apricot Capital), and planning tech community parties like Ruby Riot and Boston Boogie.

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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