From AppLovin to CRAFTSMAN+: Alex Merutka on Building the Future of Mobile Advertising

Full analysis

Alex Merutka, founder and CEO of CRAFTSMAN+, walked away from AppLovin's IPO to bet that creative, not targeting, is the last durable edge in mobile advertising. His argument to Signal & Noise hosts Brett House and Rio Longacre: as everyone taps the same targeting models, the winner is whoever makes the best ad unit and hands control back to the brand.

The decision this poses for an operator: how much budget and roadmap to move from targeting and data toward creative production, and whether gamified, interactive ad units are a real format shift or a gaming-only quirk. Type 2, easy to reverse. Nobody's betting the company on a creative pilot. The forcing function is soft: signal loss from Apple's ATT (the pop-up that lets iPhone users block app tracking) and state privacy laws keep eroding the behavioral data that made targeting the whole game.

One thing to keep front of mind: every claim Merutka makes argues for the product he sells. That doesn't make him wrong. It means we check.

The Market Analyst. The commoditization thesis is directionally right and already visible in public numbers. AppLovin's whole story is Axon 2.0, a targeting model so good the market repriced the company from its 2021 IPO to a far larger business. Merutka's own claim that MAX carries 70 to 80% of mobile ad requests tells you the auction layer is concentrating, not differentiating. When one house clears most of the volume, the edge migrates to whatever the house can't standardize. For a non-specialist: when everyone shops at the same auction with the same smart buyer, the only way to stand out is a better-looking product on the shelf. That's creative. The trade is a picks-and-shovels one, and the shovels are creative tooling.

The Skeptic. Steelman the case against. "Creative is the moat" has been the pitch of every creative-tech vendor for a decade, and the category is still a rounding error next to targeting spend. Merutka concedes the tell himself: Adam Foroughi told him there was only one billion-dollar creative company, Adobe, and that was circa 2019. If creative were the durable moat, that number wouldn't have sat at one for so long. AppLovin's brand-budget gap, by his own account, is about not going to Cannes and not owning a yacht. That's distribution, not product. If the real barrier is relationships, creative AI doesn't fix it. For the non-specialist: the problem might be who you know, not what you make.

The Operator. Try to run this Tuesday morning. Collapsing designer, PM, and engineer into AI-augmented multi-function people, the way Merutka describes his own shop, is a startup luxury, not a plan for a 200-person media org with union-adjacent creative teams and brand-approval chains. His COO rebuilt a CRM from scratch to replace Salesforce. Great for a lean team, a nightmare to govern at scale. The pre-click signal idea, capturing touch and interaction inside the ad before any click, is the genuinely useful thread here. It gives you a first-party behavioral signal you own, right when ATT is taking the old ones away. But capturing it means instrumenting interactive units, and most of your inventory isn't interactive today.

The Customer / End User. Two customers, opposite reactions. The performance advertiser buying installs already lives in this world and wants more playable units yesterday. The brand advertiser is the holdout, and Merutka admits it: non-gaming brands have been slow on gamified formats. There's a reason. A playable ad for a car or a bank can read as gimmicky, and the DoubleVerify certification gap he flags matters more to a CMO than to a mobile-game buyer. For the non-specialist: the game companies want interactive ads; the Fortune 500 brand-safety desk still wants to know exactly where its ad ran and who checked.

The CFO. Creative production is a cost center that Merutka wants reframed as the growth lever, and the economics only work if AI genuinely takes the per-asset cost toward zero. His productivity range, 50% to 100x depending on the person, is not a number you can budget against. Plan on the low end. The real return isn't cheaper ads, it's the pre-click data you accumulate as a proprietary asset that survives the next privacy rule. That compounds. Cheaper banners don't.

Tensions. Three real disagreements. First, Market Analyst versus Skeptic: is targeting actually commoditizing, or is AppLovin's Axon proof that a better model still wins and creative is a consolation prize? Second, Skeptic versus Operator: is the brand-budget gap a distribution problem that creative tooling can't solve, or a product problem it can? Third, Customer versus everyone: gaming advertisers are sold, brand advertisers aren't, and the whole thesis needs the brands to move.

Synthesis. This hinges on two beliefs. One, that targeting models genuinely converge so that creative becomes the swing variable. The public evidence cuts both ways: concentration in MAX supports it, but Axon's results suggest model quality still separates winners. Two, that interactive formats cross from gaming into brand budgets. That one is unproven and is the bet's weak point. The council leans toward acting on the narrow, defensible piece, pre-click signal capture inside interactive units, because it produces first-party data you own as ATT keeps eroding the alternatives, and away from the grand "creative is the last moat" framing, which conveniently describes the product Merutka sells. Before committing real budget, verify the DoubleVerify status yourself rather than trusting a claim that dates to his 2019 tenure, and run one interactive unit with a non-gaming brand to see if the format travels.

Prediction: In its next quarterly earnings report (expected early November 2026), AppLovin will again post advertising revenue growth above 60% year over year, showing its targeting model, not creative, is still driving the business.

Confidence: Medium. Axon's compounding results and MAX's auction concentration keep the growth engine on targeting.

Why: Merutka's thesis needs targeting to be commoditizing, but AppLovin's own trajectory since its 2021 IPO is a story of a targeting model getting better and repricing the whole company upward. The signal in this very episode, that 70 to 80% of mobile ad requests clear through MAX, means AppLovin sits on the data flywheel that makes Axon improve faster than rivals, so its growth stays targeting-led into the next print. The opposite outcome, growth stalling as targeting commoditizes on schedule, would require that convergence to show up in a single quarter, and there's no sign in the numbers that it has started.

Revisit by 2026-11-15: We're right if AppLovin's next earnings shows ad revenue up more than 60% year over year. We're wrong if ad growth drops below 60% or the company attributes the quarter's gains primarily to creative or new formats rather than its targeting model.