Agency network funds mobile rewards provider co-founded by Canadian
Success may be it’s own reward, but nothing says a startup is on the right track like US$11 million in funding – particularly if a portion is coming from one of the world’s largest marketing communications firms.
San Francisco-based mobile rewards company Kiip disclosed Wednesday that Interpublic Group of Companies (IPG) was among a group of investors that contributed to the company in a funding round last summer.
Speaking with Marketing, Kiip’s Canadian co-founder and CEO Brian Wong called the holding company’s undisclosed investment a “massive vote of confidence” in both Kiip and the mobile marketing ecosystem.
“It’s hard to not notice that IPG’s last investment was Facebook,” said Wong, who co-founded Kiip two-and-a-half years ago. “Obviously the amount of money we’re talking about is different, but the validation is very positive.
“Everybody now knows that there’s something serious to be paying attention to.”
Kiip (pronounced “keep”) is a mobile rewards program that rewards app users when they achieve an accomplishment, such as completing a game level or a to-do list. Wong refers to them as “own-able moments,” and said that the Kiip network served up 1 billion such occasions in 2012, and 280 million in the past 30 days.
The brands fund the rewards while Kiip shares revenues with the app’s developer to provide them with an incentive to include the Kiip system.
“It is tying positive emotion and this notion of reciprocity with a brand,” said Wong, who said that Kiip completed 100 campaigns for 75 brands including Pepsi, American Express and AB InBev last year. “It’s something that allows them to tie their brand to happiness very consistently.”
Kiip served an estimated 200 million rewards in 2012 said Wong. While he wouldn’t disclose how many of those rewards were redeemed (redemption rates range from 10% to 25%), he did say that one of the top games produced one million reward redemptions throughout North America.
IPG’s investment hasn’t prevented Kiip from working with other non-IPG agencies, said Wong, but it does strengthen a relationship that had already seen the company work with IPG-owned agencies Initiative and Ansible.
“In no way is this relationship an exclusive one – that wouldn’t have done any good for the ecosystem,” he said. “This is a learning play for both of us. Everybody’s trying to cut through the clutter of mobile right now and figure out optimal solutions for their clients.
“Even clients themselves don’t know what they want, so a lot of this back-and-forth allows that idea generation to happen. It’s much more effective when there’s a working relationship that’s close like this. It’s signaling to the rest of the industry that it’s worth paying attention to models like this.”
Wong said that the volume of “moments” in Canada has grown almost 200% in the past two months.
Canada, he said, continues to be a “focus area” for the company since Canadians’ smartphone behaviour so closely mimics that of the U.S.
Kiip’s Canadian campaigns included work with the Michelob Ultra brand, which saw song downloads issued as rewards, as well as pre-holiday partnership with Cineplex.
The Gaming Opportunity
While games naturally lend themselves to what Wong calls “achievement moments,” much of the company’s recent growth has come from areas like fitness, utility and food/recipe.
“Imagine a beverage brand owning every sports moment, or a food brand owning every health and wellness moment,” said Wong. “These are moments that we’ve been able to categorize.”
The Kiip network currently spans about 700 mobile apps, approximately 70% of which are games.
One of the hallmarks of the games that Kiip is involved with is their staying power, said Wong. It’s less an emphasis on traditional shoot-‘em-up games, but rather games that reward and encourage frequent use, like Sodoku or solitaire.
Wong said that the most recent round of funding ensures that Kiip will be “comfortable” for the next 12-24 months, but said that the goal is to make the company even more ubiquitous.