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Online gaming and social networking continue to attract more and more users and Offerpal media's products help online publishers generate revenue through ads. Photo courtesy of clipart.com
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FREMONT, Calif. — The explosion of the online gaming and social networking communities is well documented, so a company like Offerpal Media, which helps online publishers in these sectors make money, is an equally hot commodity.
The Fremont-based Offerpal, founded by Anu Shukla in 2007, specializes in applications that allow online publishers to generate revenue from virtual currency. In the online gaming world, and increasingly in the online social network environment, virtual currency is what allows gamers and users to continue to play games or access services. In the case of games, virtual currency can often be used to purchase things necessary for the games or to better compete in the games.
Virtual currency can be earned as a result of performance in the games, but can also be bought using real money through credit cards and other online payment methods. However, another method of earning virtual currency is through completing free advertising offers or surveys.
In an online world hungry for more and more virtual currency, Offerpal's products can be a big boost to online publishers, who can use the company's platform to set up a way for its users to earn or buy virtual currency by completing targeted advertising offers or by purchasing it directly through online payment options.
Offerpal does the ground work in bringing together advertisers salivating at access to particular online communities and the online publishers that generate content for these communities. Advertisers pay Offerpal for access to consumers or action made on online advertising offers. This money is passed on to online publishers, with Offerpal retaining a fee for the use of its products and systems.
According to Chief Executive Officer Shukla, the revenue model is so attractive, particularly for online publishers, because they can turn their efforts away from worry about generating revenue and hone in on what is most important — attracting and pleasing users. "Publishers can focus on building a good game and we can focus on monetizing it," she said.
And with the numbers that Offerpal gives, this is no small amount. According to the company, since its launch it has issued more than 730 billion virtual points to over 160 million consumers across 1,200 publishers and 190 countries.
"The secret sauce is really the optimization engine that powers our platform," said Shukla.
What this engine ensures is that the relevant ads get to the right consumers, the publishers make money while the consumers have a good experience and the advertisers are connected with consumers who want their products and will stay as customers for a long time. Typical advertising offers are in categories such as mobile services, subscriptions, personal finance, small business, dating and auto sales.
A recent deal with Mindspark Interactive Networks highlights the benefits that Offerpal touts to online publishers. Mindspark is a wholly owned business of the publicly traded IAC and a social media developer whose brands attract 40 million unique visitors a month.
Offerpal virtual currency payment systems will be used by top Mindspark brands Zwinky and IWON, allowing players to earn virtual currency in the form of ZBucks, Zcards and IWON coins, by taking part in demographically and behaviorally targeted consumer advertising offers such as free trials, big-brand discounts and online surveys. The virtual currencies can then be redeemed by users for in-site goods and services within Zwinky or IWON.
"The Offerpal Media platform allows us to earn additional revenues, while at the same time enhancing user engagement," Mike Primiani, Mindspark's senior vice president of strategic tartnerships, said in a statement. "The concept has been strongly embraced by our user communities, especially our teen audience who have limited access to traditional forms of payment such as credit cards or PayPal."
Since launching in 2008, Mindspark has developed a number social applications, informational Web sites and portals, such as Zwinky, a teen virtual worlds with more than 6 million unique users, and IWON, which features more than 150 free games and has paid out more than $72 million in prizes. Other brands include: Zwinky Cuties, Girlsense, MyWebFace, Smiley Central, Webfetti, Vimeo, Life123, Retrogamer, Kazulah, Popular Screensavers, MyFunCards, Cardboiled, Cursor Mania and Excite.
Offerpal has developed and recently released a system that makes it very easy for online publishers to offer virtual currency to their users in exchange for filling out online surveys. Launched at the end of September, the system had more than 1,000 surveys in over 50 countries from market research firms such as Nielsen NetRatings, Comscore, OTX Research Inc. and Synovate.
According to Offerpal, the survey business was already successful through the company even before it developed its new survey-focused system. The company reported that 5 million surveys have been completed through its services and approximately $12 million has been paid out to publishers for completed surveys.
According to Shukla, the future of Offerpal is very bright because the company hits right on with three of the major online trends: the growth of online gaming, the rise of social networking and the advent of virtual currency to power both.
"We are at the very heart of how entertainment companies make money on social networking," she said. "It is a very big market and that is the good news."
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Shukla
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Shukla admits that with the potential in the virtual currency industry, there are plenty of companies chasing the prize, but she feels Offerpal has gotten a good jump on the competition and should be able to cut out a sizable slice of the pie. She also believes the company's venture backing and investment in its technology give it an advantage and she insists on Offerpal's "staying power."
"Right now I feel we are probably the best positioned company in the space," she said.
Offerpal raised initial funding when it was started in 2007 and raised $15 million in February. Investors include Interwest Capital, North Bridge Venture Partners and D.E. Shaw Ventures.
The company has 120 employees and, according to Shukla, will hire as many as 60 more. She said the growth plans for now are to expand globally and deepen the product line.
A native of Uttar Pradesh, Shukla came to the United States in 1981 and is a graduate of St. Stephen's College in New Delhi.
Prior to founding Offerpal, she was the founder and CEO of Mybuys Inc., a $30 million venture back company in the eCommerce personalization market. She started the company in 2002 and just recently left its board. She started off her entrepreneurial career founding Rubric Inc., an Internet Marketing Automation company in 1997. Rubric raised $13.6 million in venture capital and was sold in 2000 for $366 million.
Shukla has also held positions as vice president of marketing and product strategy at Versata and vice president of worldwide marketing and product management at Compuware Corp.
When Offerpal was initially launched the company was providing an application for peer-to-peer fundraising on sites such as Myspace and Facebook, but then it started to do some virtual currency for advertising offers and, according to Shukla, got some instant user attention. She said this made her realize a virtual currency system would be a viable model for business and that the company should expand its offerings.
Shukla has no fear that the gaming and social networking Internet explosion will turn into the dotcom bubble and burst for companies serving it, mostly because there are so many opportunities for software and application companies to provide products and make money helping online publishers create a better experience for consumers.
"I have a very positive and optimistic outlook for our industry," Shukla said.
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