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In a World of Constantly Deleted Apps, This Mobile Player Uses Cash to Keep Folks Coming Back

2 million people open it almost every day

Ibotta rewards people when they shop for packaged goods like cough syrup. Photo: Getty Images

Mobile apps are deleted at rates that dishearten marketers everywhere. After all, some studies show that more than 80 percent of consumers—after being lured in by often-expensive acquisition campaigns—get rid of an app after using it only twice.

Twice. Yikes.

Ibotta, a shopping-driven player with 2 million monthly active users, seems to have solved the viewer-retention dilemma: It pays people. The Denver company shared exclusive data with Adweek, showing that more than half of its users opened the app an impressive 25 times in January. Through purchase-required rebates, video ad watches, poll clicks and other brand-related actions, users have collectively earned $20 million during the app's nearly two-and-a-half-year existence. They've also watched videos for marketing clients like Coca-Cola, Perrier and Unilever more than 130 million times.

Bryan Leach, Ibotta CEO, estimates his core user base spent $1.5 billion on consumer packaged goods last year in the larger U.S. marketplace, a number that probably interests brands that want to access consumers' smartphones any way they can.

"That's a lot of money changing hands," he said. "Brands can see how many people are watching their video on our app while tracking customers to the point of sale."

At first glance, his tech firm, which partners with dozens of retail chains like Walmart, Safeway, Target, CVS and Whole Foods, may seem a bit like a gimmicky competitor to digital rewards marketers Shopkick or Belly, or online coupons, notably Coupons.com. But what helps distinguish it is that it offers the chance to earn cash that can be spent anywhere that accepts digital payments.

Here is how Ibotta works: If you download the app, start looking at CVS' items and tap on Robitussin (hey, it's that time of year), you'll be offered the opportunity to complete an action, such as watching a clip or reading a "Learn a Fact" section. If you complete the action and then redeem a coupon for 50 cents off cough syrup at the pharmacy, $1—or 50 cents for each action—can be uploaded to a PayPal or Venmo account and then spent at the consumer's discretion. Once you have enough digital dough, you can buy a gift card at Starbucks.com, as one example, or deposit the money in your bank account.

Millennial moms evidently are into these kinds of kickbacks as they regularly shop for diapers, food, households, etc. More than 10 percent speak Spanish in their household.

"You are talking about a millennial audience that's 70 percent female," Leach explained. "Sixty percent of our users describe themselves as either rarely or never using coupons. They don't read the newspaper or cut out coupons."

The CEO added, "And as we've more recently teamed up with retailers like Best Buy, Cabela's and Sports Authority, we've gotten more men on the app."

Lauren Tucker, who this week launched data company Cooler Heads Intelligence after leading insights for The Martin Agency, said Ibotta's gamification strategy can generate "the type of behavioral data that will help marketers close the gap between business strategy and marketing execution."

To her point, Ibotta strikes revenue-sharing deals with retailers. When users of the free app scan a receipt for Robitussin after visiting a CVS—to stay with that theoretical example—Leach's company gets a cut of the sale. (Leach wouldn't disclose financial specifics.)

"What we're building here is the world's largest offline affiliate program," he said. "Online affiliate programs have existed for 15 years. Through smartphones, we are bringing it to the bricks-and-mortar world."

Leach wouldn't comment on whether his young operation was profitable, but pointed to a $20 million investment from Internet legend James Clark—who co-founded Web browser pioneer Netscape with Marc Andreessen in the 1990s—as proof his company had a formidable business model.

While 2 million users are unusually active on the app, Ibotta actually has gotten 6.3 million people to download it primarily thanks to ads on Facebook, Twitter and Pandora as well as organic content marketing on deals blogs. The exact number of people who have Ibotta on their phones wasn't revealed, but an Ibotta rep said 66 percent of them have opened the app in the last 90 days. In other words, many of the folks who have tried the app aren't overly active on it.

So even the "stickiest" apps have issues staying on consumers' radar in a marketplace filled with digital options. While Tucker described Ibotta's data as lucrative for brand marketing partners, she also said it "is part of a deluge of shopping and point-of-sale apps" for consumers to choose from.

But for Leach, cutting though the clutter is pretty simple: show them the money.

"When people see they can earn $100 or $200 a year for items that are already on their shopping list," he said, "I think that is the core value proposition that attracts users and has led to more and more retailers wanting to work with us."

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