When we met with Brian Wong, the CEO of mobile-advertising startup Kiip, to hear about the $11 million funding round he planned to announce Tuesday morning, we found him dealing with a pressing issue that had his team in a vigorous debate.The question at hand: How best to mock Kiip’s business-development guy, Yong-Soo Chung, for his propensity for dour expressions.
They settled on urging Chung to “turn that frown upside down.”
He complied by taking a picture of himself and rotating his permanent-seeming grimace into a semblance of a smile.
That’s a fair metaphor for what Wong is trying to do with the advertising world: taking the fear and loathing around poorly performing mobile ads and upending it with a clever technical solution.
By rethinking ads as “rewards” that show up at opportune moments in the midst of ordinary app usage—levelling up in a game, going for a run, reading a news article—Wong thinks Kiip can fix what’s broken about mobile advertising for app developers, marketers, and users.
The results so far: Kiip’s offers, embedded in some 400 apps, reach 40 million unique visitors a month. That audience experiences 100 million moments a month. A moment might be finishing a level in a game, or completing a run with a fitness app like MapMyRun.
To that audience, Kiip serves up 400,000 rewards—for example, a free bag of PopChips—a day. If you do the maths, you’ll note that users only see rewards for every 1 in 8 moments.
“In advertising, tonnage has been the model,” says Wong. That scarcity is intentional, he explains—a way of preserving serendipity. The result: 18 to 22 per cent of first-time Kiip users engage with an offer, typically by entering their email address to have it sent to them. For subsequent rewards, the engagement rate is 50 per cent.
His investors seem to like those numbers. Relay Ventures, a mobile-focused Canadian firm based in Toronto, is leading the $11 million financing, with existing Kiip backers Hummer Winblad and True Ventures also participating. Wong told us that he also secured a strategic investment from an unnamed Japanese advertising conglomerate on a recent trip through Asia.
Tying up the paperwork on the latter investment, by the way, is why Wong kept mum despite rumours last month that Kiip had raised $8 million to $10 million. In fact, according to VCExperts.com, Kiip filed new articles of incorporation in May authorizing the issuance of $11.9 million in shares—and Wong managed to raise almost the full amount.
Where’s the money going? Hiring, primarily. Kiip has about 30 employees now, and Wong plans to take that to 50 in short order. The goal for the expanded team will be to broaden Kiip’s distribution beyond games, where it’s concentrated today, and get the word out to marketers about Kiip’s products.
There’s no room in Kiip’s current digs near the Caltrain station in San Francisco. So Wong took Business Insider on a tour of Kiip’s new office space at 5th and Folsom, a still-gritty part of San Francisco’s SoMa neighbourhood.
Wedged between a sex shop and an auto-repair outfit, the 5,500-sq.-ft. space will be a highly visible showcase for Kiip’s brand, which Wong intends to make far more prominent by inviting marketers and app developers over for events.
“In advertising, you need to be the hot girl,” says Wong.
Turn that frown upside down.
Business Insider Emails & Alerts
Site highlights each day to your inbox.