The Interpublic Group, which owns venerable ad agencies such as DraftFCB, Deutsch, McCann and R/GA, has taken a stake in Kiip, the mobile game ad network founded by 21-year-old Brian Wong.The move is validation of the simple but brilliant insight that Wong had about the best way to advertise on mobile phones: Most people ignore mobile ads because they’re either irrelevant or served in such a way that interrupts what you’re doing in an app. Kiip ads, however, offer rewards to game players — like a coupon or a discount — once they win a level on a mobile game. Gameplay isn’t interrupted, players are incentivized to keep playing the game, and advertisers get branded content AND a way to instantly measure the ROI of the buy.
The move — no details were released — is the second major mobile ad deal done by an international holding company recently. (Omnicom made an alliance with Amobee in 2012.) Holding companies have generally been loathe to get involved with mobile ad networks because they don’t want to pay for the tech development side, and because tech startups tend to be overvalued as acquisition targets. (Plus, tech vendors often don’t have the key relationship with a client’s chief marketer, which agencies regard as their territory.)
IPG however, has a bit of an impressive track record at identifying tech investments. It famously took a 0.4% stake in Facebook in 2006, for $5 million — which ended up being worth $270 million at the last count.
Kiip had previously worked with IPG and its clients, Wong tells us:
We’ve had a great working relationship with Interpublic agencies, namely with Initiative (under IPG Mediabrands) and Ansible Mobile. I remember being on stage at Cannes Lions with the CMO of Dr Pepper (Jim Trebilcock) and the CEO of Initiative (Nick Pahade) and being able to talk about our successes working together.
AdExchanger notes that Kiip has taken $15.5 million in funding to date:
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.
Prior to the IPG deal, there was a propensity among some to dismiss Kiip because of Wong’s age (even though he already booked Pepsi, Best Buy, Carls Jr, Popchips and Disney as clients). Now, with access to IPG’s massive client roster, he must be taken seriously.
He tells us:
It’s really exciting to have such a massive vote of confidence from one of the biggest players in the space. As time goes on and the noise levels go up, there will be a greater need in the agency world for a clear way to help their brands build better relationships with their consumers. While the rest of the ad world is concerned about how limiting and tiny the mobile screen is, we realise that the personal nature of smartphone will help brands create even more personal connections with their consumers than ever before. We believe the right way to create these connections are through reciprocity and acknowledging the user: it needs to be meaningful.
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