Two years into their existing partnership, ad holding company Interpublic Group is making an unspecified investment in Kiip, a company that promises to connect marketers and consumers through the use of "unexpected" targeted rewards to mobile app users and gamers.
Apart from help in continuing to build the San Francisco startup, Kiip co-founder and CEO Brian Wong tells AdExchanger that the investment signifies a higher level of partnership between the company and IPG.
"Usually, when we're working with the major ad holding companies, we're not sitting on the same side of the table, working toward the same goal," Wong says. "This investment represents a new way to unlock the opportunities of mobile, which have largely been limited to placing a small strip at the bottom of the screen that doesn't do much to inspire or connect brands and consumers."
Kiip (pronounced "Keep") may seem like just another "incentive based" marketing tool. But it's premise is that instead of getting users to spare a marketer or game some attention, a Kiip offer will be presented to a consumer after they've "achieved" something within an app or game that they're already using or playing. For example, a seemingly random message could pop up congratulating a user after reaching a new high score in a mobile game or after they've shared a recipe through Twitter, Facebook or email.
"I despise the word 'incentive,' it's just another form of bribery that does little to grab a users' attention," Wong says. "If you have to bribe someone to accept your message, clearly they're not that interested and are probably just going through the motions to get a prize. They really want to get back to what they're doing and in most cases, are just putting up with you."
For one thing, by introducing a "serendipitous" marketing message when users aren't necessarily expecting it -- plus, by doing it when they've completed some function that they've intended all along, and therefore, being only minimally interruptive --Kiip says it can tap users' attention when they're at their most happy and comfortable and receptive.
Kiip's ability to keep track of users' activity and opt-in interests could eventually have wider applications than mobile coupons or virtual goods that it rewards users with. No matter how it evolves, Wong sees mobile as central to whatever Kiip does.
"We'll always use mobile as a hub," he says. "As we grow, we can see our offers on bigger screens, even in a car, because more and more, everything a person does gets connected to their phone."
That's something that IPG Mediabrands and the IPG Media Lab hope to figure out. Nevertheless, Wong says that despite the financial backing, the relationship with IPG isn't exclusive and he expects to continue working more with other major ad holding companies, Publicis, Omnicom and WPP. Still, he expects that the IPG investment will have them both exploring the parameters of mobile marketing a bit more deeply.
"At the IPG Media Lab, we identify the best and most innovative companies with whom we and our clients can partner. Kiip's approach to engaging a brand's customers and rewarding them when it is most effective is particularly compelling," said Chad Stoller, managing Partner, IPG Media Lab
The investment by IPG was a part of Kiip’s most recent round of funding which took place at the end of 2012 and included additional investments from Relay Ventures, Hummer Winblad, True Ventures, and Digital Garage, totaling $11 million. Since opening its doors a little more than two years ago, Kiip has raised $15.5 million to date.
In terms of growth, Wong says that Kiip gave users 1 billion "moments" in 2012 and has connected with users 300 million times in the past three months, alone. But when it comes to translating that into actual revenues, it's probably a bit too soon. After all, mobile ad revenues will account for 2.4% of total ad spending, and will rise to 11% by 2016, eMarketer forecast last month. But growth from 2011’s $1.5 billion in revenue is now expected to be 180 percent. In other words, the rise of mobile is impressive, even if the actual dollars are set to materialize only over time. But Wong, and by extension, IPG, is patient and hopeful about those possibilities.
"As a startup, it wasn't lost on us that one of IPG's most notable investments was early on in Facebook's history," Wong says. "Who knows what's next?"