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This article was published on August 15, 2011

AppAddictive: The next big platform for brands and social media?

AppAddictive: The next big platform for brands and social media?
Courtney Boyd Myers
Story by

Courtney Boyd Myers

Courtney Boyd Myers is the founder of audience.io, a transatlantic company designed to help New York and London based technology startups gr Courtney Boyd Myers is the founder of audience.io, a transatlantic company designed to help New York and London based technology startups grow internationally. Previously, she was the Features Editor and East Coast Editor of TNW covering New York City startups and digital innovation. She loves magnets + reading on a Kindle. You can follow her on Facebook, Twitter @CBM and .

If you were a consumer-facing business 15 years ago, you needed to have a website. Now, you need to have Facebook, Twitter, LinkedIn and mobile presence. But you can’t just have these accounts and sit back on your haunches. To be successful, you need to be special and demand attention by standing out with beautiful design and engaging content.

AppAddictive is a New York City startup that has built a social and mobile app geared towards publishing and advertising. The team has just launched out of DreamIt Ventures’ first New York City class and is raising $1 million dollars for its free platform, which helps businesses of all sizes to publish apps without coding. CEO and founder Mike Onghai says he’s already raised $250,000 and is looking for strategic partnerships.

Onghai began his undergraduate studies at UCLA when he was just 16 years old, after moving from the Philippines. Upon graduating, he was the 3rd employee at Geocities, one of the first Internet companies. He later moved to New York City and worked for several years at a hedge fund. When Facebook launched its API in 2007, he started to play with it on the weekends, writing Facebook apps that overtime accrued over 50 million users. As he learned to code with the Facebook API, he saw trend-based parallels to when the web browser was first invented. In fact, Onghai draws several comparisons between his company AppAddictive and companies like Razorfish, Geocities or Go Daddy that made headlines in the late 90s.

In 2010, he asked himself: “What do I really do with this?” The idea for AppAddictive came to him and he decided to apply to DreamIt to validate the business model. “I had to leave my cushy hedge fund job, which was hard. But just as Peter Thiel left his hedge fund to start PayPal, I think I have something here. I consider it a once in a lifetime opportunity because this market is going to be very big,” says Onghai. Big indeed. Just this week, Buddy Media, a social media management software platform for eight of the world’s top 10 global advertisers, announced that it has raised $54 million in Series D funding. According to Onghai, by 2015, social media advertising will be a 50 billion dollar market.

AppAddictive is a primarily a marketing platform that allows brands to manage their content, advertisements and analytics. Anyone who has a Facebook business page can use it to engage with users through mini-apps like quizzes, contests, image galleries, video galleries and F-Commerce storefronts. It’s a tool that could benefit big businesses as well as bands, bloggers, marketers, lawyers, doctors and investor relations professionals. Currently, over 5,500 businesses, including The National Guard are using AppAddictive, generating 30 million ad impressions per month from the 50 million users who’ve tried out the apps.

I particularly like the fact that you can use the app to load your Vimeo or Flickr onto your Facebook page in a beautiful way. Check out my Facebook author page here with my The Next Web Interview Flickr set uploaded:

For brands, Facebook’s social graph has driven down the price of customer acquisition. In the past when someone would acquire a first user, the second user would cost nearly the same amount. But now, with referrals spreading at the speed of a re-tweet and a Like, it’s been disrupted in brands’ favor. And Onghai thinks AppAddictive can disrupt it even further. In fact, he believes he can reduce the cost of customer acquisition by about 70% for one dating company that currently shells out $36 a head.

Onghai believes ad targeting will be replaced with social graph targeting, trading out current forms of SEO for Likes, +s, and RTs. This way, when people search for you on Facebook, the more fans you have will equate to a higher ranking in search results.

AppAddictive will have its own network of publishers who use its advertising API so that when a brand creates a quiz on AppAddictive’s platform, it will be deployed to other publisher’s websites who are part of the network. In the past every publisher had to embed a code on their web page and give 100% of their inventory to one ad network. Now, with the beauty of APIs, Onghai says you can always choose to use someone else’s API code depending on the highest paying rate for that moment in time. Onghai will monetize AppAddiction with a revenue model of performance based advertising and premium pricing for advanced features.

When AOL tried to maximize dial up revenue and eschewed free content strategies, Yahoo! came in and blew past AOL. But when Yahoo! ignored the power of search, Google dominated the scene. Now, Facebook has built up the social graph and Google is crawling hand over foot to keep up. In a time when many brands and businesses are using Facebook instead of traditional websites, a company like AppAddictive is a powerful business model to explore. Is this space ready for disruption of this kind? And if so, will AppAddictive be the next big thing?

For related news, check out:

The inside story of DreamIt Ventures’ first New York City accelerator

Proximity-based social networking tips for businesses.

The top SEO tips for social media profiles.

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