Everywhere you look these days, people are playing games on their mobile devices. Business travelers at the airport, kids on the bus, restaurant patrons waiting for meals –– they all seem to be gaming in 5-10 minute spurts.
Meanwhile, as is the case with all types of original content, creating all those cool (free) games is an expensive proposition, so the same problem plaguing all types of digital media hangs over the gaming industry –– how to pay for it all?
Brian Wong thinks he may have found an answer. The 19-year-old founder of the advertising startup Kiip (pronounced Keep), unveiled his unique approach earlier this week.
It can be summarized in Kiip's tagline: "Real Rewards for virtual achievements."
The idea is this: Whenever someone playing a game succeeds at reaching the next level, or gaining an achievement, Kiip proposes to offer the player a voucher good for a reward from the real world from any number of hand-picked brands, like Sephora, 1-800-Flowers, Carl's Jr., or Dr. Pepper.
Wong calls these "perfect engagement moments," when people are feeling proud of themselves and wouldn't mind being congratulated as well. But, as he also notes, the current advertising option -- banner ads -- "are intrusive and annoy the crap out of people. They really are sort of a buzzkill."
Part of the issue here is that most advertisers have been more or less trying to port the banner ad model over to mobile devices, but the real estate on mobile is so limited that those ads simply don't fit in.
"Game developers don't want to wreck the experience they spent so much time and money on creating," says Wong. "So we say –– 'no, no, no, keep the real estate, and simply let us offer the gamer a reward at that moment of accomplishment instead.'"
Wong says the makers of the 15 games they have partnered with so far are excited by this new monetization strategy. "They are saying, 'Oh my God, where have you been until now? Why didn't anyone think of this until now?'"
Wong says the answer to those questions is simple. "Only now is the timing right. We have reached a rapid inflection point for mobile games. Plus major brands are opening up to rewards, thanks to Foursquare, and to deals, thanks to Groupon. So there's finally the critical mass to do what we are doing right now."
What Kiip offers advertisers is essentially the opportunity to forge an emotional connection with consumers, as opposed to pitching them on a direct sale. Right?
"Absolutely," says Wong. "The startup community, especially in the valley, is so focused on the technology itself that we sometimes overlook the ways technology impacts our lives. And a big piece of what brands tend to forget about is the emotional connection you have to make with consumers over the long term.
"What we are focused on is the emotional ROI [return on investment] for these brand partners of ours."
And, as he adds, "The rise and fall of emotional ROI will over time affect a company's fate."
He cites an example from his own past. "I used to be a Sony-whore, I had all of their products. But then they began to mix up their messages and seemed to be all over the place and they lost their connection with me, and also with a lot of consumers."
Maybe that will change, as Sony is one of the brands that has joined Kiip's "Rewards Network" to try and regain whatever emotional connection it may have lost.
By the way, the name Kiip is a play on words, referencing the game platform Wii, and capable of yielding useful marketing campaign slogans like "Kiip on playing," or "Kiip them happy," etc. One version of the company's logo looks like a badge and is based on a Sim card.
Despite his youth, Wong is not just another brilliant college dropout, but a graduate of the University of British Columbia who skipped four grades of school along the way. After college, he worked at Digg, but was laid off, which is when he started laying the groundwork for Kiip.
The venture, which operates from offices at Fourth and Brannan Streets, has raised over $4 million in funding from angels and VCs.