Over the years, as initially free apps reach the point where they need to monetize, many have gone the simplest path of in-app advertisements. For users to continue using the app this means either paying for the add-free version or viewing the ads for free. However, with the rising negative user sentiment about disturbing advertisements and no apparent signs from developer side of fixing the issue, ads have eventually become a tool of converting free users into paid ones.
There are at least two dissatisfied parties in the game, though. For one, the annoyed free users who do not convert to the paid version for whatever reason spread their discontent around the net. What is more, the in-app advertisers are left with an unrewarding audience consisting of exactly those users. On many occasions, free users are forced to click on the ad for it to go away, while the bluntest developers go as far as directly asking their free users to click on some ads in order to keep the service free.
In 2013, a team of Latvian developers and marketers has come together in Kurzeme business incubator aiming to solve the problem. What emerged out of this, is PhoneAd – an app that allows users to select the advertising content they see, choose where the ad banner appears and get paid for viewing it.
The idea in itself is not new – there have been efforts to develop a similar program for desktop a decade ago but they failed due to eventual emergence of third-party programs that allowed users to cheat and get paid without viewing the ads. According to PhoneAd, mobile environment gives more control to developers and allows to prevent similar cheating.
PhoneAd uses a simple registration to get the app running. The wizard asks to provide basic user information and then allows the user to save their ad viewing preferences by category of interest and the way the ad appears. There are three ways – ads displayed on incoming calls, ads displayed on unlocks and ads displayed on the phone background.
PhoneAd rewards are transmitted through PayPal and besides earning and redeeming the money, users also have the option to donate it to their charity of choice. There are also additional rewards for inviting friends to join the app.
The team has an ambitious aim to return the good face to in-app advertising by maximally targeting ad content to ensure that it is welcome by users. On a side note, they also aim to turn the expense of using their cell phone into income. Theoretically, it could allow a part of free users annoyed by the ads finally switch to paid versions.
The startup has already raised €50,000 to pursue their goals, has users from 10 countries, and is available for Android. According to PhoneAd developer team, the iOS version will be released by the end of this year.
Marija Odineca is passionate about Baltic startup scene, visiting interesting Baltic startups and gathering their stories. She also coordinates the Entrepreneurship Support Centre at Stockholm School of Economics in Riga and Global Entrepreneurship Week in Latvia.