No One Likes Banner Ads. So Why Do Advertisers Buy Them?

At 19 years of age, Brian Wong was one of the youngest people to ever receive venture capital funding. He co-founded Kiip, a unique mobile advertising platform that rewards people when they've achieved certain milestones in games, fitness apps, or even mundane tasks like driving a car.

This new way of doing things has attracted attention from the likes of Verizon (NYSE: VZ  ) , which is both an investor in Kiip, and a client.

Our roving reporter talked with Brian at the 2014 International Consumer Electronics Show in Las Vegas. In this video, Brian talks about the potential of mobile advertising, and how changing the game has worked to advertisers' advantage.

A full transcript follows the video.

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Rex Moore: As you look at the advertising market, what kind of potential do we see there in mobile advertising? It's still in its infancy.

Brian Wong: Yes. I like to start off by saying there's a common truth, which is no one likes to intentionally click on banner ads. I've never met a human being who's like, "I love it." That truth being said, that means that there's actually a lot of room for improvement. Really, people are looking for an alternative.

When I ask people, "Why are you still buying these banner ads, if you know people don't like them?"

They're like, "Well, there's no other choice."

We're simply here to provide that other choice, and realize that the other choice doesn't actually have to be based on old thinking. The old thinking was, "Hey, it's a billboard that's now really tiny."

I was like, "Well, the phone is actually when people are feeling happy. Why not look at it as a reciprocity equation, rather than simply taking your attention all the time?" That's where we think the big potential is.

I think the other thing is, when you look at the way the phone has become so intimate in our lives, it's actually very good at telling a brand what our current activities are.

When we look at fitness moments -- we talk about them as "moments," so fitness moments and productivity moments and food moments -- there's a collection of the moments that we look at and actually reward. People actually feel happy when that happens, and that's the type of equation we want to help continue to make very popular.

Moore: The advertiser wants to associate with that feeling of happiness.

Wong: They do. They want to ride that feeling. But then, I like to say that, yes, you can ride it, but then you can also really abuse it.

With great power comes great responsibility, in this case, so we said we need to be disciplined. We need to make the rewards scarce, in many ways, so we've frequency capped them. We make sure that people actually feel like it is truly a reward.

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Rex Moore

Rex Moore spent his formative years in Texas, and fought beside Davy Crockett at the Alamo. He currently travels the globe for TMF, bringing back video reports on conferences and companies that matter for investors.

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