Anyone can serve an ad to a consumer, but how to get that consumer to click through—or even better, to actively engage with the brand—is one of the central struggles of digital advertising.
But a California startup founded by a former Red Bull marketer and a friend from college thinks it has hit on a surefire way to lure its gamer audience to engage with its ads—by rewarding them for that engagement with the potential to win free, carefully targeted products.
Freeway is a mobile platform available as an app on iPhone and Android. It sells space on the platform to brands for a set fee for a given period of time, and users of the app are enticed to engage with specific products based on demographics and known interests, paired with the chance to win them for free. “We see ourselves as matchmakers, creating an environment that helps foster the initial connection between consumers and brands,” said Freeway co-founder Bryan Hawkins. “Our goal is to provide users with an entertaining means of discovering new products while also helping our partners break through the clutter and gain exposure.”
The app reached 1 million plays within the first month of its launch, Hawkins said, adding that this validated many of the founders’ initial assumptions. “Each one of these plays was a three-to-five second engagement for our brands, rather than a simple ad impression,” he said.
In addition, Hawkins said several brand partners “have noticed higher purchase conversion rates when compared to the display campaigns they are running.” Two of Freeway’s clients confirmed they are seeing these results.
One of these clients is HeadBlade, a niche men’s grooming company centered on head-shaving products that targets males ages 25 and older. “We continuously run retargeting display campaigns to drive online orders on our site,” said HeadBlade marketing director Lee Richardson. “In July, our conversion rate, through to purchase, for these display campaigns was .02 percent. With the Freeway app, we are seeing an overall purchase conversion rate of .7 percent.”
Sunglasses manufacturer William Painter has seen similarly promising results, according to co-founder and partner Matt DeCelles. “If we equalize ad spend in July with Freeway compared to our display campaigns for the month, we are seeing a [five-fold] increase in purchase conversions on Freeway,” he said. “As a smaller brand, it’s tough to compete in the crowded digital space. We have to be smart with the dollars we spend on digital advertising, so we make it a priority to get creative. We feel that the gamified ads leave a lasting impression.”
Also encouraging DeCelles and company to pursue this unusual platform was its mobile utility. “We obviously have been following the growth of mobile and know—from our own behavior as well as our customers’—that people are spending more and more time on their phones,” he said.
Freeway’s ideal brand partner “has a unique, visually appealing product that is not widely known by the average consumer,” Hawkins said.
A ‘Winning’ Idea
Like all startups, Freeway began with the seed of an idea. Hawkins frequently heard a commercial for the California Lottery on his way to work, and it got him thinking about the human psyche.
“I was intrigued by the amount people spent each year, hoping for a chance to win,” said Hawkins, who worked on digital apps and games while at Red Bull. “I wanted to use a similar model to attract potential customers for advertisers.”
He focused the Freeway concept around the idea that the “moment of excitement” that accompanies a chance of winning something—especially a well-targeted product—would be so intoxicating for consumers that they would willingly engage with the advertiser.
But data collection is a major part of Freeway's business model. In a world beset by online risk and highly publicized data privacy breaches, how many consumers are really OK with handing sensitive personal data such as mailing addresses and phone numbers to a gaming platform? You may be surprised. Hawkins said 72 percent of Freeway’s registered users consented to providing this information.
“Consumers today are definitely wary of data collection,” he said. “I believe the keys to success here come down to making data collection mutually beneficial and opt-in. ...We plan to be fully transparent and allow users to engage with advertisements in a way that is neither deceptive nor accidental, but rather, because they want to. If we can accomplish this, then I believe the level of data collection involved will not be an issue.”
Hawkins said the company’s biggest challenge to date was making the jump from partnerships based solely on in-kind agreements to paid advertising partnerships. “The start was somewhat of a chicken-and-egg situation; we needed a significant user base to start charging advertisers, and we also needed a large number of products to attract users,” he said. “We overcame this challenge by starting with product donation deals.”
Freeway pulled in 20 initial partners, which supplied $30K in products for free giveaways before the app launched a couple of months ago.