We just had coffee with Lars Albright, co-founder of Quattro Wireless (bought by Apple for $275 million in 2009) and former director of publisher partnerships at Apple (iAd sales, basically) to hear about his new venture, SessionM.
The company is dedicated to improving engagement in mobile advertising by rewarding consumers for sticking with apps.
The problem with apps — particularly from the point of view of advertisers who want the eyeballs in that medium — is that the generation that grew up with mobile devices is also incredibly distracted and fickle.
"Digital natives," as Abright calls them, can switch media 27 times an hour. Even if they download an app, they're likely to abandon them within days or weeks. (Think of how many unused apps there are on your phone.)
SessionM's solution to this is reward-based advertising, in which users accumulate "mPoints" by repeatedly using an app, completing levels in a game, or otherwise increasing their engagement with it. The rewards come in the form of giftcards, credit for movie tickets, etc. Users are offered a choice of rewards, until SessionM's software figures out what types of reward you like best.
So far Albright has accumulated 20 to 30 advertising clients, including Adidas, Ford and McDonald's, to run campaigns in front of an audience of about 20 million people. He has about 40 employees, and, obviously, his business is still scaling up (after taking a $20 million round of funding in May).
His company thus illustrates an interesting split that's taking place in the mobile ad business: Those companies who are betting on traditional display ads served from exchanges, networks and real-time bidding platforms (like Millenial Media and Apple's iAd), and those who think that ads and apps can be game-ified so that consumers are rewarded for sticking with them (another such company is Brian Wong's Kiip).
But Albright demurs. "We're incremental to iAd or Millennial Media. We're not replacing banners." Rather, he argues, SessionM's reward ads reach a consumer when they're already engaged in an app, and the action is taking a natural break (such as a reload between levels).
That, he says, solves the main problem with mobile display banners of the type served in the iAd environment: While the branded content that iAds trigger may be incredibly rich, they're limited by the small, unappealing size of the initial iAd banner that users must click to generate them.
"The limitation is the entry-point," Albright says of the medium he pioneered. "It's not going to provide engagement, it's not going to provide rewards."
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