Today Web advertising network AdKnowledge announced that it had acquired KITN Media, parent company of leading ad offer network Super Rewards. AdKnowledge will contribute its international presence and technology resources to Super Rewards in the future, allowing the platform to grow to greater scale and to better serve the needs of apps that draw users from outside the US.
"On any given day, consumers are earning hundreds of thousands of dollars in virtual currency by signing up for advertising offers," said Scott Lynn, CEO of AdKnowledge. "Super Rewards is the leader in the space and they clearly offer the best solution for developers. This is our fifth acquisition in the last two years in the social media space and we’re excited about maintaining a leadership position."
While Super Rewards is probably well-known to any long-term reader of this site, AdKnowledge is making its first entry into virtual currency monetization. The company was founded in 2004 and ordinarily focuses on serving various types of Web ads from over 50,000 advertising partners to over 1200 partner developers in English-speaking companies. AdKnowledge maintains ad operations in the US, United Kingdom, and Australia, giving it more international reach than most ad server networks.
Right now the company generates over 700 million impressions a day and serves ads to Facebook, MySpace, and other social networks. It is the top provider of alternatives to Google and Yahoo's search-driven ads and the largest independent cost-per-click network working in the field. AdKnowledge's focus on social media began in 2007, when it began a run of acquisitions that focused on social media advertising specialists like Cubics. Other acquistions from this period include MIVA, Lookery, Mediarun, and Adnomics.
Virtual Currency And Social Advertising
AdKnowledge President Brett Brewer cites Super Rewards's virtual currency monetization model as holding the key to solving the problem of advertising on social media sites. While users tend to enjoy spending time there, they tend not to actually click through ads displayed on the site. Virtual currency changes that by letting users engage with ads in return for tools they can use in a favorite app or game. Once the ad offer market established itself, Brewer says that AdKnowledge decided it would either become the leader in the space or acquire the current leader.
"[Super Rewards CEO] Jason Bailey likes to say that the Super Rewards model is more of an opt-in model where users pick which advertisers to interact with," said Brewer. "To me that model is so far superior to previous social advertising solutions that we needed to make sure AdKnowledge was in that space. We'll always have a banner product, but if you just look at the economics of it, I think the vast majority of social media owners are going to weave virtual currency and virtual goods into their environments."
AdKnowledge and Super Rewards stand to become a potent combination. Between them, the two companies deal with 80% of the top social networking apps and expect to generate $250 million in revenue this year. The 50,000 advertisers that partner with AdKnowledge can immediately be added to Super Rewards's current network of 3000 advertisers. There are also plans to have AdKnowledge's international sales offices in London and Sydney begin working to support Super Rewards's network with more offers specific to those markets.
The Future Of Ad Offers
Bailey, who will remain with the company after the acquisition, also hopes to leverage AdKnowledge's scale to help bring virtual currency monetization to the console market. Most consoles use virtual currency now to let users directly download complete games, add-ons, and other entertainment content. Bailey thinks those console users would be interested in accepting offers in order earn more Microsoft or Nintendo Points. In time, he expects freemium games to begin appearing on consoles, too.
"You name any major video game manufacturer in the world and we're likely deep in discussions with them. That meant we were looking at issues like scalability and being able to manage customers of that size," said Bailey. "We look at this not so much as a sale but as a partnership that allows us to grow and expand at lightning speed. We were working hard at setting up an office in London, and now boom, poof, we have an office and sales guys in London."
The acquisition of Super Rewards marks the beginning of what may be a transformative quarter for the ad offer networks. This announcement comes just a day after heavyweight payment solutions platform TrialPay opted to enter the ad offer space, bringing with it significant ecommerce experience and a library of mainstream "blue chip" brand advertisers. While Super Rewards could be safely described as the industry leader for now, there's no guarantee this will last into next year or even next week.
