4 Ways Color Can Make Money

Group photo-sharing app Color is the talk of the tech world after nabbing $41 million in venture financing without a launched product or any revenue. The mobile application allows people in the same vicinity to swap photos. In the breathless words of TechCrunch, this translates into “reinvent social interaction.” High expectation for an app doesn’t guarantee success, of course. While Color is experiencing a bumpy debut due to kinks in the service, it also has quite a bit of potential. If Color catches on with users — and that is the $41 million if — here are four ways it could make money.

 “If Color remains a way to see photos in your immediate vicinity, the cool factor will wear off fast.” said David Berkowitz, senior director of emerging media and innovation at digital agency 360i. “If Color quickly adapts and scales to new ways to share and consume content based on what’s happening in your immediate surroundings, there could be a much bigger market.”

Brand Accounts: It’s old hat by this point, but the notion of charging a brand for color.com/brand seems logical. A brand could just broadcast content, but Color could allow for real time conversation and interaction in local hubs by posing questions, challenges, and sharing events.

Contextual Advertising: In its current form, Color lacks any way to tag pictures or openly browse buckets.Color galleries are visible on device and on the web through a simple link. With the ability to continue conversation on these images and share the archives as well, standard banner advertising wouldn’t be surprising. Imagine what the contextual advertising cost of #SuperbowlXLVI or #NYE2011 would fetch. Twitter has already seen success with its promoted trends. It’s reasonable to think Color could do the same.

Real-time Location Ads: While Foursquare lets you see what locations have the most checkins when you’re figuring out where to go, Color could give you insight into just how much fun everyone is having. Venues could take full advantage of this, by encouraging their patrons to use the app allowing the consumer the ability to take home a crowd-sourced photo album for the night. Replace that old Bar Texts screen on the wall, and there are now three locations to place advertisements: bucket, wall, and web.

Filters and Frames: People love photo filters. Look at the success of Instagram and Hipstamatic. Color could easily go in this direction with the product, then add brands to the mix. Imagine users opting for a Pepsi branded filter created by an artist.

Color’s biggest worry isn’t getting the right ad model. It’s not getting to the scale where an ad model can even be attempted. Its attention-grabbing launch was marred by complaints about the clunky user experience and the inevitable privacy concerns. An anchor on CNN this weekend termed Color “seriously creepy,” a tag that won’t help its mainstream adoption if it catches on. The big risk, of course, is Color goes down as yet another overhyped Silicon Valley launch that went nowhere with regular people — remember the “Google killer” Cuil?

“It feels a bit like the RockMelt launch last year,” said Mike Duda, managing partner of Consigliere. “Lots of attention driven by the in-the-know investor/early adopter crowd, but does it have the ability to stay relevant post trial and spread into the world of the normals?”