Its Eye on Real Social Cash, Adknowledge Buys Virtual Currency Platform

  |  July 22, 2009   |  Comments

Virtual currency can be provided to users who sign up for advertising offers.

Performance-based ad network Adknowledge is broadening its social network marketing ability by acquiring KITN Media, the owner of the Super Rewards "virtual currency" platform.

Officials with the companies said Super Rewards will remain intact as a platform but will benefit from Adknowledge's technology know-how, financial strength and global reach. They said Adknowledge's existing customers will gain access to one of the most successful forms of social network advertising.

"Today, Adknowledge is the largest independent ad network, with $250 million in revenue," said Adknowledge CEO Scott Lynn. He said the company's been focusing on more traditional forms of social network marketing, such as banners, and was looking for a viable way to better take advantage of the huge popularity of Facebook, MySpace, Twitter and others.

Super Rewards appeared to be the answer. The platform allows developers of social network applications and online games to offer users virtual currency they can be redeemed for online goods and services, such as points and power in games.

The virtual currency can be provided to users who sign up for advertising offers. For example, players of a game might be offered valuable player points if they agree to sign-up for movie rentals from Netflix. Netflix would then pay a fee for every person that joins. "For the game developer putting our platform into their game, it doesn't matter to them if somebody pays through PayPal or if it was Netflix that gave us $20 on their behalf," explained Super Rewards founder and CEO Jason Bailey.

He said social network advertising generally has "been a game of get as many eyeballs as you can, show them some ads and make a few cents off each," adding that CPM rates "haven't been great over the last few years." However, Bailey claims Super Rewards has enjoyed rapid growth and is now the largest virtual currency monetization platform for online games and social network apps. The platform was recently expanded into iPhone apps and Twitter games.

In announcing the acquisition, Adknowledge said it is currently partnered with more than 1,200 developers to deliver banner ads on social networks, and that it will work with more than 80 percent of the top social network application developers now that it is merged with Super Rewards.

Bailey said Super Rewards differs from other virtual revenue platforms in that it can handle just about any form of payment. "If there is any way to get a dime out of somebody's pocket...we're on top of it," he joked.

In a statement, Adknowledge President Brett Brewer, co-founder of MySpace creator Intermix Media, said social network applications and virtual currency "weren't even on the map" back in 2003 when Intermix launched MySpace. At the time, he and his colleagues figured traditional banner advertising would drive ad revenue, Brewer said. "Super Rewards has proven that virtual currency provides significantly more revenue than traditional banners for game developers, and increased engagement for consumers."

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