How does Kiip make money?

Kiip gets paid on a cost-per-engagement basis, earning between $10M and $20M in revenue

Given the amount of time of we now spend on the Internet, which is even more of a problem thanks to the rise of smartphones, it definitely starts to feel like it's a bit of a waste of time after a while. I mean, how many minutes of your day can you really spend checking Facebook? A lot, actually. 

So we should all be thankful for companies like mobile ad/reward network Kiip, which provides rewards for in-app achievements. If you're going to be on your phone all day, you might as well get something out of it!

Launched as a mobile gaming ad network by the then 19 year old CEO Brian Wong, Kiip made a name for itself by strategically offering gamers branded rewards right at the moment of achievement, when the user makes it to the next level or trounces his or her opponent. 

In the last couple of years, the San Francisco-based Kiip has increasingly begun moving beyond in-game rewards, opening up its network to developers who have experimented with applying the mobile rewards system to other apps, such as fitness apps, education apps, content apps, social apps, and more. 

The rewards, averaging $5 in value, are fairly simple. They include things like a $5 gift card to American Apparel or a sample from Bath & Body Works. The company has a network of 1,000 brands, 150 of which are actively running rewards, and it through those partnerships that the company makes its money.  

Kiip gets paid on a cost-per-engagement (CPE) basis, such as when a user submits an e-mail address to claim a reward, which 25 million have done so far. Earlier this week the company introduced a new way for users to earn rewards: by watching 15 second branded video inside a game.

The company typically earns 30 cents to $3 per CPE and splits the fee 50-50 with developers. While the amount per engagement might seem small, it certainly adds up, generating between $10 million and $20 million in revenue for Kiip.

Some of the brands that are currently on the Kiip platform include P&G, McDonalds, Pepsi, Unilever, Skittles and Ford. Kiip is now over 2,500 apps and games, including RunKeeper, Cut the Rope, Better Homes & Gardens Must-Have Recipes, AllRecipes Dinner Spinner, and Any.do.

Kiip has raised at least $15.3 million in funding, as well as an undisclosed amount from American Express Ventures in August of last year. Other investors include Hummer Winblad Venture Partners, Crosslink Capital, True Ventures and Relay Ventures.

(Image source: kiip.me)