Startup Formvertise is committing financially to the effectiveness of its mobile ad campaigns.
It’s is actually a spinoff from another company we’ve covered, Adlibrium, which offered mobile marketing tools for small businesses and nonprofits. The problem with that approach, as explained to me by CEO Shaunak Khire, is not hugely surprising — many of those organizations don’t have significant budgets.
With Formvertise, the team is focusing on a more specific problem — acquiring customers and users. To that end, it created an ad unit that presents consumers with a form that they can fill out. It’s not a new idea, even in mobile, but Formvertise is trying to eliminate some of the issues with other types of mobile advertising.
For one thing, it’s based on software-as-a-service pricing. In this case, advertisers pay a set campaign fee on a cost-per-submission model, so they’ll know how many submissions they’re going to get for their money. For another, the form should be very simple for users to fill out — depending on what the advertiser is looking for, consumers either enter their name, email, and zip code, or they fill out three poll questions. (They’re offered rewards like discounts for filling out these forms, but Khire noted that with these ads, the advertiser isn’t offering a discount to just get a one-time purchase, but instead to build a relationship.)
Khire also emphasized the difference between cost-per-lead ads and the cost-per-submission model that Formvertise is offering. He said it’s less about identifying with a sales lead and more about connecting with customers for purposes as varied as “creating communities, registering for newsletters, creating brand subscribers, market research, and so on.”
Formvertise is backing up this approach with what the team has internally called “sue me” ads. If advertisers sign up for a campaign of $20,000 of more, Formvertise will contractually commit to delivering a certain number of submissions within a certain period of time or they get all of their money back. If advertisers sign up for a campaign of at least $100,000, Formvertise will commit to both user acquisition and sales goals, and again, if it doesn’t meet those goals it will offer a full refund.
“It’s an outright guarantee from our end,” Khire said. “We are confident because of the datasets that we have, so we essentially take on all the execution risk of that particular campaign.”
The company is also announcing a Mobile Direct Response Fund of $250,000 which will be used to double the number of accounts provided to small ad agencies — so an agency that pays for five accounts will receive 10. And Khire said he will consider taking in-kind payments for campaigns from small businesses and bootstrapped startups.
By the way, Adlibrium isn’t going away completely. Instead, Khire said he’s going to turn it into an incubator of sorts for other local commerce products.
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