Q2 Mobile Start-Ups

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In this report, senior executives from five start-ups, ranging from beta-stage groundbreakers to multimillion-dollar darlings of venture capital, offer insights on the shape of things to come in mobile marketing.

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  • 1. Q2Mobile Start-Upsto Watch 2011 Q2
  • 2. Introduction: The Mobile AgeDigital innovation takes nerve, verve and an undaunted entrepreneurial spirit. In this report,we talk with senior executives of five gutsy upstarts (and maybe even the next Twitter) at theforefront of mobile. Though their companies are developing distinctly different technologies,they all share a common vision of a not-so-distant future where mobile serves as a powerfulnexus of the online and offline world for consumers and a critical driver of brand success.Major brands are finally if fitfully beginning to embrace mobile marketing. Though ApplesiAd mobile advertising network and Googles acquisition of AdMob have given mainstreamcredibility to mobile ads, the strategies of many marketing organizations can still becharacterized as cautious experimentation and one-off campaigns. Jeff Hilimire President and Chief DigitalFrom casual gaming to group messaging to SMS-based payments, the insights from these Officer, Engaugestart-ups suggest that mobile platforms present valuable opportunities for forward-thinkingbrands today. Those options continue to expand with new and emerging technologies. Inparticular, anticipation in the tech community runs high for near field communication (NFC),the wireless technology that will turn next-generation iPhones and Android phones into mobilewallets, allowing consumers to tap-and-pay at checkout lanes and retail kiosks.These start-ups offer a compelling perspective on how consumers will connect with brands onmobile devices assuming marketers are ready to meet them there.
  • 3. 04 Kiip Real-world Rewards for Mobile Gamers How did a teenage whiz kid win the support of major brands? A conversation with Founder and CEO Brian Wong.08 Yobongo Group Messaging for Sociable Strangers Could this early stage start-up be the next Twitter? A conversation with Co-Founder Caleb Elston.12 BOKU Leading the Race to Monetize Mobile Can telcos and texts compete with credit cards? A conversation with VP of Business Development Kurt Davis.16 Immersive Labs Intelligent Signage Observes Shoppers and Optimizes Ads Is mobile the missing link to revolutionize in-store displays? A conversation with CEO Jason Sosa.20 Scoutmob Flash Commerce for the Locally Inquisitive Why is GPS the next big thing in group deals? A conversation with Co-Founder Michael Tavani.
  • 4. 4 | Start-ups to Watch Q2Real-world Rewards for Mobile GamersHow did a teenage whiz kid win the support of major brands?As anybody whos overcome an addiction to Angry Birds and Fruit Ninja can certainly attest,mobile games have an uncanny ability to claim inordinate amounts of our time and attentionin return for the most ephemeral, fleeting rewards. Thanks to Kiip, players can now supple-ment their virtual achievements with real-world loot ranging from free flowers to a free burgerto a free Sony tablet computer.Kiip (pronounced keep) is a rewards network that provides redemption offers from majorbrands to players who reach an achievement in mobile games, such as clearing a level or A conversation with Founder andsetting a high score. This cleverly conceived start-up is the brainchild of Brian Wong, a techie CEO Brian Wong.wunderkind who skipped years of high school and landed a job at Digg at age 18, only to be www.kiip.melaid off the following year. Now 19, hes attracted $4 million in venture capital and a strongshowing of brand partners. Kiip debuted in April 2011, and its network of 15 mobile gamesalready reaches an estimated 15 million players.
  • 5. Q: What is Kiip and how does it work?A: Kiip is a rewards network. We are creating what we believe is a new category in mobile advertising that is based on a completely different perception of how people pay attention to and interact with their devices. Right now, with the current mobile ad model, we have banner ads that are being ported to a smaller screen. Banner ads are just getting smaller and more annoying, arguably. Ninety pixels on your mobile screen are now taken up by something you really dont care about. Brian Wong In gaming, when you level up and attain top scores, the moment when you hit that Founder and CEO, Kiip achievement is actually a very powerful one where you feel like youve accomplished something significant. So instead of putting a banner ad there, which would be a major buzz kill, we decided, what if a brand was there to provide you with actual, tangible rewards? In gaming, when youQ: Youve attracted interest and participation from brands such as Sony, Carls Jr., Dr. level up and attain top Pepper, GNC, Homerun.com, popchips, Sephora and 1-800-Flowers. Whats in it for advertisers? scores, the moment when you hit thatA: They realize that there are a lot of people playing these games and reaching them is very achievement is actually difficult to do. Our value proposition is very simple. Our model allows them to reach an engaged audience a truly engaged audience which is the holy grail for marketers. a very powerful one... Kiip
  • 6. 6 | Start-ups to Watch Q2Q: A player in a game succeeds in getting to the next level, then the game pauses for a brand interaction. What are the actual mechanics of that experience and how the rewards are redeemed?A: We are trying to be as frictionless and non-interruptive as possible. When you hit that moment, theres a natural break in play. We show a small interstitial ad that says, if youre interested in this real reward from this brand, feel free to tap, and if they tap, a screen comes up describing what theyve won. They enter their email address, we send them an Mobile devices are email with the redemption information, which they can review when the game is over. We never take them out of the game. And if they dont tap on the ad, it goes away and they severely misunderstood. go right back to playing. People think of them asQ: Why is mobile gaming the first focus? handicapped because the screens are small.A: Because mobile devices are severely misunderstood. People think of them as But there are a lot more handicapped because the screens are small. But there are a lot more opportunities beyond what the eye can see. opportunities beyond what And also because of the general competitive landscape. In social, you have Zynga the eye can see. and everybody else its skewed. If you want to do something in social games, you have to have a partnership with Zynga. And it has to apply to their scale, which can be dangerous. Companies like appssavvy and SocialVibe are essentially tied to Zynga, and its a bit unfortunate. In mobile, the field is more distributed. You can work with more game developers who have a very large audience. There are 15 or 20 we can work with.
  • 7. Q: Youre coming out of seven months of stealth mode. What did you learn while in beta?A: We did as much as we could to make it as complete as possible before we began talking with partners. They made it even better. We heard a lot of great ideas and the product evolved. A lot of the brands weve worked with had a good hand in shaping the service as it grew.Q: What demographic groups are the Kiip advertisements currently reaching?A: Its all across the board. Mobile gaming has become quite ubiquitous and appeals to a great Were trying to variety of people. preserve the sacrosanctQ: Theres a question of what rewards people are really seeking when they play games