1 Billion Served: A Conversation With Poynt

Last week, I had the chance to catch up with the team at Poynt about new acquisitions, usage milestones, intellectual property and general directions. The short version: There’s a lot happening up there in Calgary.

First, the company announced on Friday that it has reached 1 billion user actions. That includes search queries as well as click to call, click to browse or map views. Additionally it’s grown to 6.4 million unique users, including 30,000 new users in February alone.

Also, something we failed to cover last month, Poynt acquired the ad serving division of Go2 Media. I was reminded of this earlier in the week when XAd acquired Go2’s remaining assets consisting of its publisher network.

For Poynt, Go2 will connect the dots to become a broader ad network. So in addition to positioning ads within its own flagship mobile apps for BlackBerry, Android, Win7 and iPhone, it will place ads for other publishers and app developers.

On the advertiser side, it already pulls in ads for local media companies like yp.com and SuperMedia. And on the publisher end, it’s putting together a series of partners that collectively account for several hundred million impressions according to Tony Bristol, senior VP of business development.

This ad network will focus on premium local inventory whose contextual and geographic relevance is known to boost performance. In that sense it joins XAd, Chitika, Where and a few others going after the local premium ad market.

Poynt is confident that the combination of Go2 and its recently acquired patent can achieve eCPMs that far outperform run of network advertising on more broadly defined ad networks like AdMob.

It’s so confident in fact that it is betting its margins on it. It will employ an interesting arbitrage strategy where it shares ad revenues with publisher partners (for placement) on a CPM basis, but splits ad revenues with ad partners (for distribution) on a CPC basis.

This “CPM in/CPC out,” as Bristol calls it, is an opportune strategy in environments where higher ad performance can be achieved. Given the above assets and performance benchmarks for mobile local ads, this is a smart bet.

This is also imperative in such a value chain where multiple distribution points (read: rev sharing) compress margins rather quickly. It requires both clever arbitrage and scale — both of which are top priorities for Poynt.

Scale-wise, the company is also breaking international boundaries by blitzing local media partners (sources of content on the ad side) throughout North America and Western Europe.

It already works with AT&T, SuperMedia and CityGrid in the U.S., and with Thomson Local, Sensis and other top local media outfits in their respective overseas markets.

The biggest challenge, according to Bristol, is getting these partners to give it more ad content to distribute. Margin compression of course compels these sources to hold third party distribution to certain levels.

There are many other directions Poynt is moving to further beef up the ad network inventory. These include new ad formats that are in line with mobile user intent, immediacy, and calls to action.

I can’t talk about those yet but will report back as soon as I can. Meanwhile, join us at ILM East in a week and a half when we’ll have Poynt CEO Andrew Osis on stage to dive deeper on all of the above. Hope to see you there.

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