The high cost of mobile data is a pain point for many smartphone users. Meanwhile, mobile advertisers struggle to get users to engage with their content. Now a new startup says it has created a way to solve both problems at once, by rewarding users who engage with brand content on their cellphones with mobile Internet minutes.
Boston-based startup Aquto has unveiled Kickbit, an app that enables mobile users who watch ads, take surveys, purchase items or download and try out new apps to get rewards of additional free mobile data minutes from their participating carrier. The app will be downloadable from Android and iOS app stores or through third party publisher sites or apps.
The company says it is in talks with a major U.S. carrier to launch Kickbit in August, and has been beta testing it with Vodafone in Europe, which has launched it in Portugal and plans to roll it out in other European countries in coming months.
“Mobile advertisers have a tough time keeping users engaged. Mobiles have a small footprint and it’s hard to get users to pay attention,” says Susie Kim Riley, founder and chief executive (CEO) of Aquto.
But while brands in the past rewarded mobile users with things like Amazon gift cards in exchange for engagement, getting the reward was sometimes not worth the effort because it involved filling out complicated forms, for example. “High friction is the biggest challenge. It has to be something that users value and can receive easily,” Riley says.
Aquto hit on mobile data as an ideal reward. “Mobile data is the underlying oxygen that apps need to function,” says Riley. But many mobile operators have moved away from offering users unlimited data because it costs them too much to deploy, while users are at the limits of what they can afford or are willing to pay, with typical data overage fees of $10 to $20 a month. And smartphone users, a majority of whom are between 18 and 35, represent a target audience that advertisers covet.
According to Riley, Aquto seeks to bring all that together to benefit carrier, consumer and advertiser. Marketers can either work directly with the startup or ‘Aquto enable’ their campaign through the startup’s ad network partners. The advertisers or ad networks pay Aquto, which in turn pays some of that to the participating mobile carriers. The only officially announced agency thus far is Madrid-based Mobext/Havas Media.
In a recent survey of 1,000 Verizon & AT&T smartphone and tablet users with data limits, Riley notes, 66 percent of users said they were curbing their use of data due to its high cost and 70 percent said they were on a limited data plan, in which users get throttled after a certain threshold. More than half of those surveyed said they would engage with advertisers to get data.
Providing mobile data also addresses the friction problem because participating carriers automatically offer it to their users when they take certain actions. When the users engage with advertisers, the operator sends them a text message that they have received a mobile data reward. “Users don’t have to fill out 20 forms to get this reward. It’s instant gratification,” says Riley.
Founded in October 2012, Aquto received $8 million in funding from North Bridge Venture Partners and Matrix Partners, where CEO Riley was a former entrepreneur in residence. She previously founded a telecommunications startup called Camiant, which according to reports from the Wall Street Journal was sold to network signaling company Tekelec in 2010 for $135 million. That company was subsequently sold to enterprise software company Oracle in March.
Riley claims her new startup has no real competitors. “Although operators could implement such a system themselves, advertisers are interested in scale so they are more attracted to a model that is not linked to one carrier,” she says.
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Mary Lisbeth D'Amico is a freelance writer based in Jersey City who frequently covers digital marketing, social media, tech startups, and venture capital. She has contributed to a wide range of publications including The Wall Street Journal, Business Week, Red Herring, and Real Deals. Find her on Twitter at @mldamico.