Kiip’s Plan to Mesh Gaming, Rewards and Ads

Mobile advertising still leaves much to be desired. Even iAds can seem like glorified banners. A new startup just out of stealth mode aims to change that by rewarding consumers.
Kiip (pronounced “keep”) is an ad network that gives players of mobile games tangible goods in reward for virtual achievements. Let’s say someone gets to a new level in Angry Birds, Kiip would present a coupon for six bags of free Popchips. For the marketer, it’s a way to acquire a new customer.
“Gifting creates an imbalance,” said Brian Wong, the 19-year-old founder and CEO of Kiip, which recently raised $5 million in venture capital financing. “We’re trying to take that as a layer and apply it to the moment of achievement in the game.”
Popchips, Sephora, 1-800-FLOWERS, and GNC have signed on as advertisers. Kiip will focus on gaming apps. Wong isn’t revealing what games are in the network. The network works on a cost per engagement model, charging advertisers between 25 cents and $3.
Tim Hanlon, managing director of Velociter, the Interpublic Group investment arm, heralded the time we’re entering in to with services like Kiip, a “renaissance of promotional marketing.”
The larger effect, he said, might be bringing the virtual world of gaming closer to the real world of brands. Last summer, Zynga launched a campaign with 7Eleven that provided Farmville points for every Slurpee purchased.
“It’s another version of buying a gift card.” Hanlon noted, “but nowhere did Zynga return the favor to 7-Eleven. It would have been more interesting or more compelling. Too bad you couldn’t use your farm-building skills to get a big gulp at 7-Eleven.”
“Arguably we’re in a post-digital world,” he said. “The distinction between the things that are digital, mobile, or physical are kind of collapsing before our very eyes.”
The system depends on developers to weight achievements in their games and to provide demographic data of their users via third parties like mobile analytics provider Flurry. Developers are given a limited number of weight that they can distribute between the different achievements in their game.  There’s currently a high level of involvement in approving apps that will make it hard for the network to scale, but it will guarantee the quality of the apps available for advertising. Each game has a limited number of Kiip achievements, meaning that inventory is scarce, thus more valuable.
Right now the rewards are all for redemption of items or significant discounts, which are needed as Kiip doesn’t provide the brand with the email address of the user that signs up for the reward. Instead Kiip sends the reward email, but allows the brand to put additional action items on the email to incentivize the user to join their mailing list. But considering that the user has to engage directly with the brand to redeem the reward, they’ll have that information if the engagement is complete.
Wong said there would be some really interesting new deals in the next few months focusing on entertainment and travel, so it will be interesting to see what they can bring to the table besides free stuff.
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