Veteran advertising executive Adam Greenhood’s “Mad Man” strategy of getting advertisers to pay consumers to listen to their ads is making an impressive splash.
Greenhood’s Albuquerque startup, AdWallet LLC, reaped $800,000 in advertising revenue since launching locally last summer, about $400,000 of which was paid out to consumers for listening to ads from local and national companies using the AdWallet service. The other $400,000 represents AdWallet sales income.
The startup has 40,000 New Mexico-based consumers using its app, and 250 marketing firms, nonprofits and others promoting products and services on AdWallet.
“August will be our first month in the black,” Greenhood said. “We’re excited as a startup to be at that point in just 12 months.”
The company is raising money from private investors to finance expansion next year into other cities and states, starting with Denver. To date, AdWallet has received about $1.4 million in private equity.
“We’re looking to expand next year, definitely to Denver and possibly to a few other cities,” Greenhood said. “It depends on how much we raise. We have proof of concept now, so we’re talking with potential institutional partners.”
The AdWallet concept is fairly simple, but potentially disruptive in the advertising world. Marketers pay consumers 50 cents for every 30-second ad they watch on smartphones or mobile devices, something Greenhood calls “Paid Attention.”
Consumers log onto AdWallet.com to download a user app. After answering a few questions to match users with commercials most likely to appeal to them, ads start flowing via text messages.
If users watch a commercial, accurately answer a question to make sure they paid attention and rate the commercial, 50 cents is automatically credited to their account. If users share the ad on social media, they earn another 25 cents.
After accumulating $10 in credits, users can transfer the earnings to their bank account, exchange it for a gift card or donate it to charity. AdWallet earns 50 cents from its marketing clients for each ad a user watches.
It’s a novel concept for advertisers, and possibly a compelling one, since it assures marketers that targeted audiences will see their ads, rather than simply blanketing consumers through print, radio and TV, said Erin Killion of the K2MD ad agency, which has used AdWallet for a few clients.
“With AdWallet, we know people are watching the spot,” Killion said. “It’s a little more challenging with other types of advertising to know if people are really engaging with the product.”
Advertisers pay $1 each time an AdWallet user watches their ad, but nothing if they don’t. And since AdWallet tracks all user activity, marketers get instant, detailed feedback on their promotional campaigns.
Getting clients to buy into the concept has been an “uphill climb,” Killion said. But given the results demonstrated to date, AdWallet could gain a lot more customers going forward.
“As it expands, I can see AdWallet being considered an important part of the media mix,” Killion said. “Not a replacement for other forms of advertising, but a part of it.”
Data on user engagement show significant response to marketing campaigns.
The New Mexico Tourism Department, for example, used AdWallet for a New Mexico True campaign this summer to get local residents to visit local attractions, plus a Keep New Mexico Clean and Beautiful campaign to get people to pick up litter and trash. More than 400 AdWallet users signed up to win a free local vacation through NM True, and nearly 300 signed a pledge to keep the state beautiful, Greenhood said.
About 40 percent of AdWallet users also shared ads on Facebook after viewing them this past year, offering advertisers more bang for the buck.
“For $1,000, an advertiser gets 1,000 guaranteed engagements, plus 400 shares on Facebook,” Greenhood said. “Facebook estimates that every Facebook share is worth on average about 100 views.”
AdWallet’s own advertising to sign up users showed particularly strong results.
The company spent $500,000 since last summer on TV, radio, print, billboard and digital ads. That generated 40,000 users, about 15,000 of whom signed up after other AdWallet users shared the app with them.
“Users earn an extra $1 each time a friend they referred signs up,” Greenhood said. “That means 15,000 of our users only cost us $15,000 in advertising. The other 25,000 users cost us $500,000.”
Perhaps most telling, of the roughly one million ad engagements logged through AdWallet this past year, no one has responded negatively to viewing ads.
“Not once has someone complained that they felt interrupted by an ad, and that’s our core goal, to change an interruption into an invite, which is very different from traditional advertising,” Greenhood said. “Advertisers are getting a better result, and for users, their attention is being valued, rather than being interrupted.”
AdWallet’s “Paid Attention” model also benefits the local economy as users earn money.
“About $400,000 went right into consumers’ pockets, which is money they would otherwise never have earned,” Greenwood said.
Of course, no users are getting rich off AdWallet.
“I’ve earned about $20 on AdWallet that I still need to cash out,” said Brandon Garrett, who began using the app last year. “It’s not much, but it’s contributing to my Starbucks’ fund, which is nice.”