Gameit scores $1.6M to turn mobile ads into a game-playing marketplace

As many as 82 percent of online users ignore ads. One new startup sees that as an opportunity to make mobile ads the game-based front door to shopping.

Salt Lake City-based Gameit is announcing today it has landed $1.6 million in seed funding, and is formally moving its game/ad/shopping platform from beta to release.

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Users select a product in the Gameit app on an iPhone or iPad (an Android version is planned), watch a short, brand-supplied video ad, and then answer trivia questions.

Correct answers get points, with more points for faster answers. If the game has the required minimum number of players, the highest point scorer when the eight-day game period ends gets the product for free.

Everyone else gets discount coupons ranging from 20 percent to 80 percent off, depending on your ranking. The product can be purchased in the app.

If the game doesn’t have the minimum number of players, everyone gets the same discount of 10 to 20 percent.

The cofounders, CEO Bryce Johnson and chief game designer Tyler Hall, told me that competition can get pretty intense in the last hours. That’s because players can play again and again, with new scores replacing old ones and everyone trying to knock the highest scorer off her perch before the game period runs out.

The company says most people play the same game — and watch the same ad — an average of two to three times. Hall said it takes about ten plays to see all the questions for a game, but you don’t need to watch the video ad to the end.

Participating brands include Kate Spade, Lululemon, Nikon, Tory Burch, and Sephora, for clothing, housewares, toys, and gadgets. Gameit reports about 10,000 unique players and about 200,000 gameplays during the beta phase, which began in December.

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The company claims it has invested almost nothing in marketing so far, with only about 150 emails sent to friends and, recently, a small number of ads purchased on Twitter.

The company gets fees from the brands and from its sales of the products, which it buys at wholesale and drop-ships. Product purchasing from Gameit only started in the last week. Their original model envisioned passing the purchase information onto the brand and taking a cut, but that proved cumbersome.

The cofounders pitch their new venture as ads that essentially become content programming, driven by a prize of a free product or a discount. Reward-based mobile ads are growing in popularity, such as watching a brief video ad in the middle of a mobile game in order to win another life.

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But, with players aiming to get Gameit-fulfilled products, you can also view their platform as a marketplace with an enticing freemium front-end.

Since players compete to become more product-knowledgeable, the cofounders cite this as developing brand advocates. It’s not yet clear, though, if learning a few facts about a Nike shoe makes one want to tell all your friends — but it could.

A number of ad agencies are creating reward-based ads, but often without the same drivers of the chance for a free product, a discount, or the last-minute competitive fervor. Gameit points to Chicago-based Trivios as a competitor. But, Hall told me, “their app is focused on trivia, [while] ours is the branded experience.”

The seed round, representing the total funding raised so far, was led by DAK Capital, with participation by a number of angel investors. The money will be used for R&D, customer acquisition, and landing more brands. On the drawing board: development of teamplay and analytics.

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