Odeeo has raised $5 million in funding to create audio ads for mobile games that don’t disrupt mobile gameplay.
The Tel Aviv company gives advertisers a chance to be able to connect with gamers via non-disruptive, personalized audio messages in mobile games.
Mobile ads often pop up in the middle of gameplay and interrupt a player’s flow, or engaged concentration. That’s not good for engagement and can lead to players churning out of a game. Odeeo president Elad Stern said in an interview with GamesBeat that in-game audio represents a non-intrusive way of reaching players without the annoyance of pop-ups.
As an advocate for audio for a long time, it’s been a long road. There were days when people didn’t understand what podcasts were, or know the significance of audio ads. But over time, players have tired of the ads that have become more intrusive as companies get more desperate for revenue.
Join us for GamesBeat Next!
GamesBeat Next is connecting the next generation of video game leaders. And you can join us, coming up October 28th and 29th in San Francisco! Take advantage of our buy one, get one free pass offer. Sale ends this Friday, August 16th. Join us by registering here.
“A lot of mobile users don’t see themselves as gamers, but they are gamers. Everybody is playing. For us, we are bringing audio ads to this table and educating the brands and agencies about the power of gaming and how what we bring is less intrusive as a solution. It really is a mission for us,” Stern said.
Thanks to the innovative approach to audio ads, Odeeo is reaching 15 million daily active users.
Atinum Investments, one of Korea’s largest early stage investment funds, led the round with participation from existing Odeeo investors Play Ventures and Anton Gauffin to help supercharge Odeeo’s global expansion.
This strategic investment is timed to coincide with Odeeo’s expansion in key markets, primarily in North America, where Odeeo is growing its U.S. team ad operations. Stern, cofounder, relocated from Tel Aviv to New York to join Dan Feldstein, vice president of marketing; James Kowan, commercial lead; and Kathleen Verdugo, agency sales lead.
This news comes hot off the heels of Odeeo’s announced expansion into the Middle East/North Africa (MENA) through a strategic partnership with Evolution Media Group. Odeeo will also partner with Atinum on greater presence in Asian territories including Korea and Vietnam in addition to existing partnerships in Japan.
“In-game audio has become much more mainstream in the past two years, and nowhere is more critical to adoption than the US market,” Stern said. “I’m very excited to be moving to New York to open Odeeo’s first full American office and work with the US team to champion in-game audio solutions to the world’s biggest advertisers and agencies, many of whom are already partners of ours. We have tremendous leadership in place in the states, and we anticipate investing even more to educate the market and champion in-game audio in the coming months.”
Fast growth
The Tel Aviv-based company also saw 566% net revenue growth in 2023 and 260% year-on-year daily active user growth. Year-on-year impression growth was 400% and ad requests increased 10 times to 100 billion. At the start of 2024, the Odeeo software development kit (SDK) was live across 800 game titles (more than double 2022), and 2023 was Odeeo’s third year in a row of double-digit growth.
Many of the companies on the game side are leading casual and hypercasual game developers, on both the supply side and the demand side. That means they’re both advertisers and the beneficiaries of the ads.
“We are working with big players in the digital audio space who are testing this new marketing channel as a new breed in game advertisements,” Stern said.
Ads typically last 10 seconds to 50 seconds. If a user has the volume of a device turned off, the ad won’t play. And players will listen more if it’s relevant to them.
The company managed to achieve this growth and establish the new ad format even though it has had employees in the war zones of both Israel and Ukraine, Stern said. During this time, engineers and others have had to leave the company to serve in the armed forces.
All told, Odeeo has raised $15 million to date. Previously, Odeeo raised $9 million in June 2022 in a round led by Play Ventures, the early-stage gaming VC and Global, a media and entertainment group and Europe’s largest radio company. Odeeo also raised $1 million in 2021 in funding from Play Ventures, Eric Seufert, Chris Calderon and Michail Katkoff. Odeeo has grown to 40 people.
“Atinum prides itself on unearthing companies with high growth potential. Odeeo has the intrinsic value a VC seeks in its investments. Odeeo has the magic combination of technology, people, traction and scalability and it perfectly complements our portfolio,” said Sang-Ho Park, managing director of Atinum Investments, in a statement.
“We are delighted to welcome Atinum Investments to the Odeeo family, and we’re excited that they share our vision for how the power of audio can evolve the gaming industry. Their expertise in gaming and tech, as well as their strong presence in one of gaming’s largest markets, will be critical to helping Odeeo meet the worldwide demand for our offerings,” said Amit Monheit, Odeeo CEO, in a staetment.
Origins
Adtech veterans Monheit and Stern, who worked together at IronSource, started Odeeo in 2021 in the midst of COVID with the goal of empowering audio advertisers to reach audiences at scale. This coincided with a slowdown in mobile advertising with Apple’s focus on privacy over targeted ads. At IronSource, the pair were among the top 50 people at the company and the saw it grow to more than 2,000. Unity bought the company for $4.4 billion in 2022.
“I like to build things, to really dig in and I saw there was potential here to create something new and really disrupt the monetization space,” Stern said. “There was also a way to bring in brands that weren’t in the mobile ecosystem. So we decided to build a bridge between the digital audio brands of the world to the mobile gaming space.”
Stern added, “We realized the value of audio. Audio is like your best companion. You can walk, you can run, you can cook while listening to audio. So why not playing a game? And listening to an audio ad is not visual and so it is not interpreting the game. For us, it was a no brainer.”
As for Apple’s focus on privacy over targeted ads, Stern said it represents a challenge. “But that’s why innovation is so important in our space. You don’t see enough innovation and that’s exactly why we are bringing in something that works for everybody,” he said. “Brands are accepting and want to buy it. Users understand it, and the big players need to understand they have a place to grow.”
Ad results
In partnership with Adswizz, Odeeo worked with Hyundai, Havas Media and Innocean to build brand awareness and increase test drives for the Ioniq 6 EV car. The ads drove in-game audio to test drive conversions of 1.3%. The banner click through rate (CTR) was 6.3%, and they generated more than 8,000 leads.
Overall, Stern said the average CTR is around 1-1.5%, which is significantly higher than other audio formats. Spotify’s audio benchmark CTR is .06%. Not only is Odeeo’s CTR much more competitive, it is also backed up by the post-click results clients have seen; one travel client reported 17% post-click engagement, Stern said.
The company also achieved scale with a CPM 50% below streaming audio ad rates with a major fast-food brand to raise awareness around a seasonal launch by reaching diners through popular games. The campaign saw 15 times the industry average CTR for banners.
Meanwhile, a fitness ad for a U.S. subscription-based company worked with Odeeo. The spent went to 25% of the audio budget in three months. Orders increased 40%, web visits were up 50% and CPA efficience was up 18%.
And the British telco brand EE wanted to drive awareness metrics for its in-home broadband service. After working with Odeeo, EE saw 10% increase in brand awareness, 14% increase in brand perception, 10% increase in purchase intent, and 59% of the audience felt audio ads were better suited to gaming than other formats. And 69% of the audience enjoyed that they could still play while listening to the ad.
“In the past, there was a lot of concerns about brand safety, but we assure them and we show them global gaming is a brand safe environment with diverse audiences,” he said. “The mission is bringing in more brands and agencies to understand the power of advertising within games.”
That’s part of why Stern moved to New York and it is adding more people in the U.S. Overall, the company is tackling the global market for audio ads. So far, different brands have seen a positive lift.
“We want to make sure everybody is aware of this solution,” Stern said.
Operating in war zones
As for the wars in Israel and Ukraine, employees were affected indirectly or directly as they had to go into the reserves or otherwise join the armed forces.
“This is when humanity steps up, and this is still a very delicate time in which we put a lot of effort into making sure people have what they need with their family before the company,” he said.
One reason the company is setting up in New York is that it’s hard for many of employees to travel. In Ukraine, men cannot leave the country for extended periods of time.
Regarding the tough times for games, Stern said, “Gaming has hit a bit of a rough patch, a lot of it having to do with outside economic factors, but it remains the biggest form of entertainment globally and a huge opportunity for innovation around advertising.”
He added, “When Amit and I started Odeeo we did it because we believe that gaming is the best industry to be in, and that there’s untapped potential that can be unlocked with new and creative approaches to monetization. After over a decade, big brand advertisers are finally seeing the potential in mobile gaming, and there’s a lot of room for growth still. I’m optimistic that we’ll start to see a speedier recovery for gaming in 2025.”
Stern said he is grateful that “people are really stepping up and taking more sensibility, making sure things that are happening and really working together. We have gotten a lot of support as a company in two war zones. Let me tell you it is unbelievable and overwhelming, and we’re still getting the support.”
Rivals include Audiomob, and Stern said it is healthy to have competition in its space. His firm focuses on assuring the brands that the gaming space is safe and powerful when it comes to involving advertising in gaming. He said there is a brand lift that happens from the audio ads. Stern also noted many people on the team have 15 years of experience in advertising.
As for pioneering a new type of audio ad, Stern said, “It’s a challenge at the end of the day. We invented a new channel. It takes time to understand. You need to commit as a company to this change, coming from the tech and advertising space. For us, it’s 15 years. It isn’t done in a day. It’s a marathon and we understand that and we are taking the right calculated steps with our investors and advisers. I wish we didn’t have the challenges back at home. But besides that, the [opportunity] is amazing.”
Source link
