Adknowledge, the largest online advertising network, today acquired Super Rewards, a fast growing startup that uses virtual cash to engage people with advertisers. The value of the deal was not disclosed.
“I’m very excited about the promise of virtual cash,” Brett Brewer, president of Adknowledge, told SVW. ” We wanted to acquire the leader in this space because we think that growth is going to be very fast. And we can scale the Super Rewards technology across our entire business. We also have offices in many countries and can bring in country specific advertisers.”
Mr Brewer said that Adknowledge annual revenues are about $250 million. But display advertising is becoming less effective. “We think virtual cash is going to be very big. Instead of bombarding consumers with more ads, Super Rewards allows people to engage with advertisers, it gives people a choice.”
Virtual cash is a big business in the online gaming world and it is now also being used in social networking sites.
Super Rewards pays people in virtual currencies of their choice in return for specific tasks such as if they sign up for a Netflix account or apply for an insurance quote.
Super Rewards buys the virtual currencies and in turn is paid by companies as part of regular affiliate sales commision. It makes its money on the difference between the money it earns from the affiliate sales and the cost of the virtual cash.
Affiliate marketing was initially popularized by Amazon, which pays a percentage of sales to “associates” who bring in customers. Super Rewards has affiliate sales relationships with about 4,000 companies.
Mr Brewer sees applications for virtual cash beyond gaming and social network sites. Virtual cash could be used by newspapers. “I’ve spoken with some newspaper groups and they are very open to exploring this market.”
Mr Brewer says Adknowledge has relationships with large advertisers such as Dell, and Expedia. And that they are interested in virtual currencies.
Mr Brewer is the co-founder of Intermix Media, which created MySpace.
