Companies around the globe are creating apps that allow users to shop, play games, connect, manage bank accounts, share photos or watch videos on their mobile devices.
Kochava, a Sandpoint company launched in 2011, is a fast-growing provider of a key part of that app-driven economy: It tells companies and advertisers how many people download apps, and then what they do with them afterward.
The company’s name means “star” in Hebrew. It has 26 employees, nearly all of them in Sandpoint. A year ago the headcount in Sandpoint was just eight.
CEO Charles Manning said he expects Kochava to keep growing rapidly and gaining customers, ranging from big spenders such as the Walt Disney Co. to smaller app makers.
A key product feature his company offers, he said, is a real-time dashboard of data on the activity of customers using a company’s app.
One of Kochava’s customers is Machine Zone, the maker of the online Game of War series. Like many other companies looking to reach customers, it advertises its products and apps on Facebook. But it also has numerous other online ads.
“It’s become incredibly important for them (Machine Zone) to know who’s spending money after the app is installed, and where they come from,” Manning said.
Such app tracking has acquired a buzzword among online marketers: LTV, for lifetime value.
Scott Bauer, a director at Idle Games in San Francisco, said Facebook accounts for more than half of the company’s spending on advertising.
“Without the insights that Kochava provides we would not get a true understanding of the value of the users who come from Facebook,” Bauer said.
Manning said Kochava provides valuable summaries about how users behave on Facebook, and Facebook wants advertisers to get that guidance to make it easier for them to create advertising that actually reaches their target customers.
Kochava’s increase in business can be measured just by the volume of information Kochava is collecting and storing in several data centers.
“Every day we are adding about 16 gigabytes of data,” Manning said. That’s about the same as the volume of information found on four full-length movie DVDs.
Previously, companies tracked customers through their web browsers using “cookies” — small text files loaded onto websites — or code that logged user activity on a web page.
Those methods were mildly successful in tracking where users went, but not what they did.
Mobile apps are generally much smaller software programs, but they’re coded to send back gobs of information to the servers of companies that developed them or to ad networks.
It’s now routine for apps to reveal when and how often they’re used, where the user first found and downloaded the app, and the type of device the user owns. They often also report the specific geographic location where an app is being used.
Kochava’s focus is entirely on tracking mobile devices, Manning said, because that’s the hottest area for marketing and customer development.
CEO once worked for Oracle
Manning’s career brought him to Sandpoint in 2006. A decade earlier he had been living in San Francisco and had left Oracle to form his own network-analytics company.
That earlier business was acquired by a Washington, D.C., company, and Manning moved his family to the East Coast. They stayed there for five years, then returned to the West Coast, choosing Sandpoint because it was within a few hours of an airport and provided a quiet and unpretentious lifestyle.
In 2006, a few years before the advent of mobile computing, Manning started PlayXpert to develop software that allows video gamers to chat and text with others while playing. The product drew customer interest, and Manning began recruiting employees to Sandpoint to complete the job.
In 2008, as he was set to deliver the first commercial version, the recession hit, leading to layoffs and the decision to find an alternate source of sales.
“We buckled down and did consulting services for other companies. Basically we just rode out the storm,” he said.
By 2010 the mobile marketplace was growing, and Manning got deals to develop a few mobile apps for early versions of the iPod Touch.
One customer also asked him to find out how popular the app was and how often people used it.
Manning realized that was something other companies would want as well. In 2011 he launched Kochava, and the company has been profitable ever since.
Manning said North Idaho’s scenic lakefront and unhurried lifestyle have helped him recruit workers to the office in downtown Sandpoint.
Kochava is in the data-tracking industry and Manning recognizes that customer information and personal privacy are hotly debated topics.
Two corporate competitors that had worked with Facebook as app-data trackers recently lost their accounts with the world’s dominant social network. They were booted after audits determined the companies were not adhering to guidelines on protecting user data.
Kochava has seen an instant increase in business as a result of that change, and Manning said he’s not going to let the same thing happen to Kochava.
“We take privacy seriously,” he said.
How well or how badly privacy is protected is something government leaders will need to address within the next several years, he said.
“We’re at a tipping point in terms of how much people share information online” and its impact on society, Manning said. “Instead of needing ‘cookies’ to see what people do, now we have apps in our pocket 24/7.”
Joe Stockwell, a Silicon Valley investor and technology consultant, has known Manning for two decades and agreed to serve on Kochava’s board.
Stockwell is convinced Manning will keep Kochava growing and firmly focused on data security.
“Mobile is still in its infancy, and we will need to address the (privacy) question at some point,” Stockwell said.
He can see customers eventually insisting that any data being tracked by firms like Kochava belongs to them, not the advertisers.
“I do feel you will see a point where companies will empower customers to claim their own private data, and they (customers) can decide to sell it and make money on it,” Stockwell said.
“If that happens, we’ll be ready for it.”