Offerpal is an advertising platform that monetizes social media by awarding users virtual currency in exchange for completing ad offers. Founders Anu Shukla and Mitch Liu combined their experience in online personalization, cost per action (CPA) advertising and optimization technologies to create a technology platform for the social media marketplace.
Based in Fremont, California, Offerpal claims to be the first “Managed Offer Platform” for social applications, online communities and e-commerce sites. Their platform allows users earn points or virtual currencies by participating in advertising offers which, the company says, have been specifically engineered for targeting, relevancy and maximum conversions. Further, the platform includes customer and partner support; 24/7 support to answer users’ questions; web-based real-time reporting, following applications revenues and activity up to the minute; and account management with personalized client service to optimize campaigns. Offerpal provides international coverage, with localization in more than 25 languages and coverage in 190 countries.
The company, with more than 3,000 Offers in more than 80 countries, targets social application developers from large companies like Zynga and Playdom; online gaming companies like Aeria Games and IWON; virtual worlds like IMVU and WeeWorld; and social networks like hi5 and Tagged. Currently, Offerpal works with over 1,000 publisher partners including, IMVU, RockYou, Aeria Games, Jolt Online Gaming, Outspark, WeeWorld, Ooga Labs and Serious Business. Further, they are working with 3,000 big-ticket advertisers such as Netflix, Blockbuster and The New York Times.
The company feels that the virtual goods economy and social networking advertising are growing as Facebook heads toward the $500 million revenue mark while other small developers are slated to get $250 million to $300 million in 2009. Further, most estimates put the size of the virtual goods market somewhere between $4 billion and $6 billion globally, which Offerpal views as a great opportunity. The company claims that about 15%–20% of virtual currency revenues on the partner sites come through Offerpal’s ad offers. Their business model is revenue sharing with publishers on revenues Offerpal generates from advertisers each time a consumer takes part in one of their offers.
Offerpal has raised a total of a total of $19.6 million so far: a $4.6 million Series A from InterWest Partners, North Bridge Venture Partners in June 2007 and a $15 million million Series B from D.E. Shaw Group, InterWest Partners, North Bridge Venture Partners in February 2009. The company says that it closed the most recent financial year with $35 million to $45 million in revenue.
The company’s competitors include SuperRewards, Gambit and TrialPlay. In June 2009, GigaOm reported that Offerpal had sued Kickflip, the creator of Gambit, alleging that Kickflip used Offerpal’s services in order to steal knowledge of how the service worked and then used that knowledge to create a competitor. Kickflip said that Offerpal’s claim has “no merit”. It said that it was originally a games developer and used both SuperRewards and Offerpal but found that neither company was able to fulfill its needs and so decided to start its own service. The suit was not greatly appreciated by Facebook developers, and most of them came down rather heavily on Offerpal in a forum, with one going so far as to say, ”Let Offerpal know that they if they want our business they can’t get it by suing competitors — they have to earn it!”
This segment is a part in the series : Deal Radar 2009