Chicago-based Tap.Me, a startup focusing on in-game advertising, announced a $3.2 million round of funding led by Hyde Park Venture Partners this week, which will go towards helping the company extend its reach to more mobile users. Tap.Me, originally founded in 2009 as a mobile gaming company, switched gears in 2010 to focus on game-specific mobile advertising, using an approach it terms “brand enhancements.”
Tap.Me’s approach is designed to work in tandem with the games in which its ads appear, instead of being an incongruous part of the overall experience. Tap.Me CEO Matt Spiegel, who joined the company in 2011, explained the idea in an interview. “The core of how Tap.Me was founded is that there is a way to marry the ad experience and the game experience,” Spiegel said. “if you did that well, you’re actually going to create an experience that benefits everyone involved: the developers, the players and the brands.”
Spiegel said that what Tap.Me offers is a way for advertisers and brands to step in and essentially pay the cost of in-game improvements and add-ons in exchange for some exposure. In other words, it’s like freemium but instead of paying real money for, say, a power-up, Coca-Cola might sponsor an item that provides a temporary energy increase for your in-game character.
The addition of Spiegel also prompted a slight change in focus for Tap.Me. He explained that the company had previously focused on targeting independent developers with what was a self-service platform, but said that now, they’re going after bigger fish with a more service-oriented approach. “We have approximately 25 game developers live with the platform, some with more than one game,” Spiegel said. “We are very confidently projecting that we’ll reach over 25 million gamers by mid-year.”
Tap.Me will still have to face stiff competition, however, and there are a number of other players tackling alternative ways to market in-game on mobile platforms. Kiip, for instance, offers gamers rewards for in-app engagement, and SessionM, Quattro-wireless co-founder Lars Albright’s new startup, aims to do the same by offering gamers points attached to sponsors in exchange for engagement and download activity.
“From a game development perspective, I think [our approach and theirs] are very complementary,” Spiegel said when asked about the competition. “Their product runs at the end of the experience and offers players a reward to players for playing, and our experience comes really at the beginning and while you’re playing and has brands help you play more, play better and win faster.” He thinks Tap.Me’s approach offers brands more opportunity to tie their products to specific experiences, while Kiip looks at providing promotions and giveaways after the fact, and he said that both models can likely coexist in harmony.
One thing remains certain: with the popularity of mobile gaming experiences, and in particular the success of free games on the growing Android platform, in-game advertising will continue to be big business. Tap.Me also adds some big names to its board of directors as part of the deal, including Jeffrey Lapin, a former Atari CEO. If any company can help brands access that audience in a way that offers higher return on investment, you can bet bigger players like Google and Apple, as well as brand advertisers and content publishers, will pay close attention.