Global advertising firm
The Interpublic Group of Companies, Inc.
) recently formed a strategic partnership with Kiip, the world's
first mobile rewards network, to tap new markets and augment its
revenue. The investment of an undisclosed sum by the advertising
behemoth in the mobile and gaming advertising platform is likely
to unlock value and offer more incentives for brands to better
connect with consumers.
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IPG Media Lab division of IPG Mediabrands will lead the
partnership that would strive to introduce leading marketers to
Kiip consumers. Kiip has pioneered a reward network model for
various applications in its mobile and gaming advertising
platform, which rewards users for their in-app "moments of
achievement". This in turn enables brands to better communicate
with consumers and draw more attention compared to a mundane,
small strip of advertisement message at the bottom of the screen.
The advertising companies could also have a deeper understanding
of consumer demographics by tracking user activity and opt-in
interest to redesign its products and/or marketing messages.
Consequently, these companies can monetize mobiles to augment the
quality of their promotional content. The investment, therefore,
by Interpublic is likely to reap huge benefits for it as well as
for its clients in the long run.
On the other hand, by teaming up with Interpublic, Kiip expects
to propagate its unique business model, which is just over a year
old, and attract a larger pie of global top-tier marketers who
are willing to engage more with mobile customers. Kiip presently
has a tie-up with over 45 premier consumer brands, and over 670
iOS (operating software of iPhone) and Android applications. The
latest investment by Interpublic is among a series of such
transactions since year-end 2012, by virtue of which Kiip has
raised $11 million in its kitty.
Interpublic is the third largest advertising agency in the world,
offering a range of advertising and marketing communication
services. The company competes with the likes of
Omnicom Group Inc.
Publicis Groupe SA
We maintain our long-term Neutral recommendation on the stock,
which currently has a Zacks Rank #3 (Hold).