MegaPhone platform turns cell phones into joysticks

Toronto Tue Sep 8, 2009 1:18pm EDT

1 of 7. People play a MegaPhone game in Philadelphia, Pennsylvania in this undated handout photo.

Credit: Reuters/Handout/playmegaphone.com

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Toronto (Reuters.com) - Imagine being in the middle of Times Square in downtown New York and using your cell phone to play a video game on a giant screen against the throng gathered there.

MegaPhone, a digital advertising company launched in 2006, does just that, providing its clients a unique way of interacting with consumers.

"I think all of us who work in the advertising industry have to ultimately admit to ourselves that people don't like most advertising," said co-founder Dan Albritton. "What we're trying to do is to bring a genuinely fun experience and then you're getting a little advertising wrapped inside of it."

Albritton and partner Jury Hahn have created a software platform that allows anyone with a cell phone to call a number and play a video game against thousands of complete strangers on giant digital screens at concerts venues, sporting events, or in urban centers like Times Square.

Most of MegaPhone's big wins on the client side have come in the sporting world.

Adidas used their technology to run a "shooter" game at the 2008 NBA All-Star Game in New Orleans in which participants punched in a number on their cell phones and using an avatar controlled through their phones "shot" other players. Players were then sent their scores and an SMS asking if they wanted additional advertising.

In another promotion, fans at a Philadelphia 76ers game made free throws by yelling "shoot" into their phones. The best scores were awarded with free tickets to upcoming games.

THE PITCH

Albritton said that most media companies that own outdoor screens sell advertising by telling potential clients their ads will be seen by X number of eyeballs.

"That's completely false," he said. "Five million people may walk through Times Square every day, but when they look at your sign, that's it. They look for a quarter of a second. What we provide is real metrics."

Albritton said MegaPhone gives clients hard, tangible data regarding how long each mobile customer played the game, where and when they played it, and how many of them agreed to have additional ads sent to their phone or email.

"We're doing for the out-of-home market what Google does for the online market: make everything trackable and essentially create a market for buying interactivity where previously there was none," he said, adding his games get much higher opt-in rates than conventional SMS campaigns where viewers are directed to text a specific number into a cell phone to view an ad and potentially get a discount or win a prize.

While MegaPhone has brought in revenues since it launched, Albritton acknowledged it remains a challenge to win over clients who have always bought ad time on stationary billboards, or who simply reproduce their in-home television ad campaigns on outdoor screens.

He believes that thinking will change and MegaPhone will start realizing some "serious" revenues, but admitted the sales process is far more complicated than with online, where you build a website and traffic and advertising revenue then rolls in.

Albritton's main challenge is to keep the business afloat, which primarily means paying his nine-person staff, until the advertising economy picks up. To ride out the recession, Albritton is seeking additional bridge financing, or a Series B round, of "a couple million dollars" in venture capital.

"The reason I believe that we are interesting to investors is that we are one of the first companies to really take true interactivity to out-of-home media," said Albritton, who adds his ultimate goal is to have a client "come to us and say I want to buy 2 million minutes of interactive media time for this campaign: where can I buy? How much does it cost and what is the creative going to be? And we can just hand back an answer just like any other regular out-of-home company would do."

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