A Kansas City-based online advertising network has jumped into the world of virtual currency with its latest acquisition.
Adknowledge Inc. acquired KITN Media, which owns the Super Rewards platform.
Super Rewards helps developers of online games and social network applications generate real money from the vitural money used in the games.
Gamers can buy the virtual money with real money, and earn it by clicking on ads at the site. Advertisers, in turn, pay for clicks.
For example, players of a new Twitter-based game called 140 Mafia need points to hire mobsters, regain health and the like. They can earn points playing the game, buy points with a credit card or gain them by clicking on advertising-based offers.
Super Rewards’ virtual currency platform also is used in other online games, such as YoVille, a game on Facebook.
Adknowledge’s tools help online sites select and post the kinds of ads a particular viewer is likely to respond to. It already works with more than 1,200 developers to post banner ads on their social network sites.
Combined, the companies said they work with more than 80 percent of the top developers on leading social networks such as Twitter, Facebook and MySpace.
The companies did not reveal terms of the purchase, though Adknowledge said it is the company’s largest acquisition to date in terms of price and revenues.
Adknowledge’s revenues will exceed $250 million this year with the addition of Super Rewards revenues for the rest of the year.
Jason Bailey, chief executive and co-founder of Super Rewards, will continue to run it under the Adknowledge umbrella. The businesses would not say whether he has a continuing ownership stake.
Scott Lynn, chief executive of Adknowledge, said the purchase became attractive because of the response rates for online ads tied to games’ virtual currencies.
For example, a standard banner ad placed at a game site might draw clicks from fewer than one in a thousand gamers, Lynn said.
But an ad that brings the gamer virtual currency for the game often attracts more than 25 percent of the users, he said.
“This is really why we believed that we needed to acquire Super Rewards,” Lynn said. “Even though we were showing 700 million graphic ads on Facebook every single day, we were still losing out from a monetization perspective with the virtual currency platform that Super Rewards had built.”
Lynn said game developers also like the virtual currency model because it is providing upwards of 90 percent of their advertising revenue.
Super Rewards said it was attracted by Adknowledge’s international operations, ad targeting technology and collection of advertisers.
Brett Brewer, president of Adknowledge, said he sees other applications for the virtual currency concept beyond games.
For example, he said newspapers could decide to require online readers to have credits to read the full text of articles. Readers could earn credits by clicking on ads, perhaps enough credits to read all the articles for two weeks, he said.
“Super Rewards has literally just started talking to newspaper businesses in the last month,” Brewer said.
Adknowledge began in 2004 and has grown to 230 employees, including 110 at 4600 Madison Ave. in Kansas City.
Its other acquisitions include MIVA in March. MIVA is an online advertising network whose brands include Espotting and Findwhat.com.
Last year, Adknowledge acquired Adonomics, which provides Facebook analytics and developer services, and Lookery, which displays ads on social network sites.
