In-game advertising has never reached the spending levels that bullish analysts and purveyors were predicting in the mid-2000s.
In fact, last year Microsoft veered sharply away from the business when it shut down Massive Inc., despite spending more than $200 million to acquire the company.
So what are venture capitalists thinking when they give a teenager $4 million in funding to launch an in-game ad product for mobile games, where the screens are smaller and the millions paying to play Angry Birds have already demonstrated that ads are not particularly welcome?
Brian Wong, the 19-year-old Canadian brains behind the startup Klip.me—which just received $4 million from Hummer Windblad, True Ventures, Crosslink Capital and others—claims to have an innovative solution to mobile games, which will not alienate players and still appeal to major brands like McDonald's. He just won’t say much about what that solution is until the company's official coming-out party at Ad:tech San Francisco next week.
The brash Wong did tell Adweek a little bit about what he doesn't want Kiip.me to be about.
"I know a lot of people have a bitter taste in their mouths over Massive," Wong said. "But that was more about the failure of the acquirer. We're nothing like Massive. We're about in-game engagement. We're really coming out of nowhere with a new category.
"We're not about sticking banners in games," Wong added. "That's a great way to annoy a lot of people. A lot of mobile advertising right now is very Web 1.0, and it's about taking a piece of your screen. That's an attention exchange. We are trying to provide a value exchange. And we want brands to be part of that exchange."
But that sounds like what companies including WildTangent, Tapjoy and SocialVibe are doing in social games—i.e., asking gamers to sit through ads in exchange for virtual goods or game advancement.
Not even close, said Wong, who previously worked in business development at Digg. While he respects what WildTangent has built with its BrandBoost platform, "those are old companies that won't be able to change," he said. "Those are incentive-based models, which don't create genuine impressions. Value exchange is really what we stand for."
What sort of value exchange? We'll find out next week when Wong reveals what Kiip.me is all about. Meanwhile, he's using some of his funding to staff up the company, bringing on former Digg East Coast sales head Chris Kobran to serve as vp of sales and former EA Mobile staffer Dan Silberberger to serve as vp of business development.
Starting next week, Wong says he will attempt to simply revolutionize mobile advertising. "We want to come at this like a raging pit bull," he said.