Group Messaging Searches for a Business Model

For app developers, the how-do-we-make-money learning curve is getting shorter and shorter.

Take the newly launched GroupedIn, one of a several group messaging and texting apps that has suddenly popped up like mushrooms after a rain storm. iPhone users who downloaded the GroupedIn app when it launched at South by Southwest Interactive this week not only gained the ability to create small groups from among their contacts, they also became part of several sponsored groups.
Runtex, a small Austin-based chain of running supply stores that organizes races across Texas, uses its sponsored group to provide tips on outdoor activities. Because the app is location-aware, when members walk into one of the chain’s stores, they can receive offers, make purchases through the app and accrue loyalty points. Runtex can offer incentives for group members to persuade others to join in.
Brian Magierski, president and CEO of Appconomy, GroupedIn’s developer, said the company is working with Runtex to increase the functionality to the retailer and that some of the features are still in a private beta version.
“We’re building them an app that is a commerce engine,” he said.
The sponsored groups approach is a bet that such communication services aren’t ideal for typical ad units. Such an approach has an advantage at a time when advertisers are looking for more innovative methods of reaching consumers. The downside is custom ad vehicles are notoriously difficult to sell.
Other GroupedIn sponsored groups come from a local TV affiliate and CW Austin.
GroupedIn is trying to stand out in a crowded field. It offers the same functionality, more or less, as GroupMe (which has a bit of a head start on the rest of the pack), Beluga (recently purchased by Facebook), TextPlus and Fast Society, to name only a few. The idea behind all of the apps in the field is that users can create small groups and send everyone in those groups text messages. There are some big bets this will take off. GroupMe closed a $10.6 million funding round that was billed as a “competition” among venture capitalists. Of course, it’s anybody’s guess who might win the group messaging app wars — and if the services really take off with large numbers of users.

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