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Monday, March 16, 2015 4:16 PM ET
Mobile ad platform rewards users who engage with advertisers
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As more companies look to emerging markets in Asia for growth, one mobile advertising startup says it has a winning formula to attract and retain consumers in India and elsewhere.

Airloyal Pte. Ltd., which is headquartered in Singapore and operates out of Chennai, India, achieves this by sharing some of the advertising dollars it collects with consumers. The more users engage with companies through Airloyal's Ladooo mobile ad platform, the more they get back in additional mobile time or other incentives.

Since the launch of its Ladooo app in February 2014, Airloyal says it has delivered more than 5 million engagements for its advertisers. Ladooo offers its users rewards for discovering, installing and engaging with various apps. Consumers then use these rewards to recharge their mobile service or direct-to-home TV services.

Paying it forward

Explaining the company's incentivized marketing approach, Airloyal co-founder and CEO Raja Hussain told SNL Kagan that with shrinking devices and user attention spans, it is not enough to give consumers good content and exciting products.

"We have to include them in the value chain. The [Airloyal] model is essentially time is money for the users," Hussain said.

"We have realized that for India, or any of the emerging markets, the biggest issue for a huge take-up of any of these [Web] services is the affordability of mobile data," he added.

Hussain believes that if some of the advertiser's dollars are diverted to consumers to pay for the costs of the mobile data needed to access the apps, this can result in a powerful cycle that keeps rewarding users who then can afford to use more mobile data and try out more new apps and services.

In just over a year of its launch, the Ladooo app has seen more than 3.5 million users. Of the over 100,000 reviews on Google Inc.'s app store, Google Play, over 80% gave the app a 4 or 5 rating. The company has used its app to promote over 200 other apps or products, 70 of which are from direct customers with the rest coming from mobile ad networks like NativeX. Airloyal's direct and indirect clients include e-commerce giants such as Amazon.com Inc. and Flipkart.com, Internet streaming services such as BoxTV and Ditto TV, and gaming app developers as well as telecom companies that are targeting Indian consumers.

However, one common challenge most apps face is sustaining user interest over the long term. Hussain is confident that Ladooo's model is well-positioned to keep interest high.

"[Users] spend very little time on a particular app or service [in the mobile ad platform] and if they don't get what they want, and if it is not fun, they leave," he said.

As for Ladooo itself, Hussain said that 30% of the app's original users are still using the service, even without any artificial triggers such as notifications reminding them to return to the app.

"People who joined us last February are still using the service. The number of new users joining us has increased every month," he said.

However, he believes that it is not just the incentives that keep Ladooo users coming back.

"People actually come here to discover a lot of new products and offers that they otherwise would not have," he said.

Airloyal uses various targeted advertising tools to collect user data, which could be as general as age group, gender, and geography to as specific as the type of phones used, apps downloaded and whether a user has a credit card to help businesses target ads to the right users, Hussain said. He stressed that the company does not compromise user privacy, however.

Apart from its consumer-oriented app Ladooo, Airloyal offers businesses services such as getinstalls.in, which helps businesses get a large number of app installs, and it is working to launch a new survey/feedback platform called GetInsights. Once a business subscribes its app to getinstalls.in, Airloyal pushes a campaign on Ladooo for its users to discover, install and use the apps and collect incentives.

For instance, Australian telecom company Ziptel, which is in the process of launching a Viber-like mobile app called Zipt in India, recently approached Airloyal to get 10,000 Indian smartphone users to install the app, which works in 2G, to make local and international calls, and then answer a quick feedback survey. This helped the telecom company collect initial user feedback prior to launching the app on Google Play.

GetInsights is aimed at helping clients conduct quick surveys over a large sample of a target group based on age, gender or other preferences on issues ranging from the design of a product to political matters, with feedback received within hours. Airloyal is currently in talks with fast-moving consumer goods companies, media research companies and a number of other organizations about GetInsights, Hussain said.

Dissecting the model

Anindya Ghose, co-director of the Center for Business Analytics and professor of IT and Marketing at New York University's Stern School of Business, said that Airloyal's business model "has lots of potential, especially as there is growing discussion about how users can benefit from giving firms access to their data, and the monetary revenue sharing possibilities between users and advertisers in return for giving firms access to their data."

However, he cautioned that the model may face friction in markets like U.S. and Western Europe, where consumers have significant concerns about their interactions with ads and the data that firms capture about them through those interactions.

"My general finding has been that data privacy via smartphones is relatively less of an issue for consumers in Asia," Ghose said. "That said, as crowd sourcing of tasks by companies becomes even more prevalent … services offered by Airloyal, such as market research and surveys, will have some great potential, both in the U.S. and elsewhere," he added.

For 2015, Airloyal is expecting 20 million downloads of its flagship app. It is also looking to expand operations to 6 to 10 other Southeast Asian countries with similar characteristics to India by the end of the year.

While Airloyal currently has no plans to expand its services to the U.S., Hussain said its clients include U.S. companies that are targeting Indian consumers.

"We generate a huge number of acquisitions for Amazon on a daily basis, but we are a small company, a team of 10. … So we leverage sales teams of the ad networks," Hussain said.

He added that Ladooo stands out among services that offer incentives to customers because unlike perceived Indian competitors such as Paytm and Freecharge, Ladooo does not require users to have a credit card.

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