IAC’s first mobile hatchling, Blu Trumpet, takes flight

IAC (s iaci) introduced its mobile incubator program Hatch Labs in March, calling it a technology sandbox where innovative mobile ideas can be prototyped. The first graduate, Blu Trumpet, is now launching to the public and is taking on the problem of app monetization for publishers and developers and app distribution for advertisers.

The in-app ad network offers an app wall that is built into the strip of tabs along the bottom of an app, allowing users to find other interesting apps to download. The app wall is meant to be a nonintrusive way for people to discover apps. Advertisers pay per install for every time a user downloads an app. But users are not incentivized to install an app, a key point of distinction because Apple banned the practice (s appl) of offering virtual goods or currency in return for downloads, because it apparently gamed the App Store ranking system.

The app walls are easy to install for publishers and are a simple way to add monetization to their apps. For advertisers, it’s designed to be a friendly way to drive downloads without pushing users with pop-up or display ads. And it gives them a better sense of their return on investment for securing users.

Blu Trumpet CEO Nina Sodhi, who was formerly COO at BumpTop before it was bought by Google, said she talked to IAC properties about what they were looking for, and many said they were interested in a good alternative to banner ads. Advertisers, she said, wanted more transparency and a way to push downloads:

People are getting bored with display advertising on mobile screens. It comes with a cost to real estate and then with user reaction. We do think what we need is a new presentation layer and performance based advertising. The math works out because it takes away a lot of the ambiguity around advertising.

Blu Trumpet has started with IAC apps like College Humor and Daily Beast, and it has already seen 1 million impressions. The install rate after people view the app wall is at about 10 percent. Sodhi said she is talking to Urban Spoon, Match.com and other IAC properties, but the goal is to be a provider for all apps. Working with IAC, however, has allowed Blu Trumpet to prove its concept on some big apps, and the advertiser queue is backlogged, Sodhi said.

But what incentive will users have to keep checking the app wall? Sodhi said consumers will hopefully be drawn to the idea of finding new apps. And she said Blu Trumpet will use an algorithm to surface more app suggestions that have been successful on specific apps. Blu Trumpet will also look at using the wall to remind users to reopen apps that they may have installed but have not used in a while to help boost engagement. Ultimately, Blu Trumpet is looking at expanding the wall to include books and videos, and it should be moving beyond iPhone apps to iPad and Android(s goog), said Sodhi.

The launch of Blu Trumpet will just be the first of many startups to come out of Hatch Labs, which is a joint venture with Xtreme Labs. The incubator has a couple of other projects that will emerge later this year and next year. App developers and publishers still want to push downloads and are looking for ways to gain app users without running into Apple’s ban. Blu Trumpet gets a head start by being part of IAC, but it will need to show that its early success can work for more publishers and advertisers.