By Timothy Hay
Dow Jones VentureWire - November 13, 2007
After a successful trial run with its partner Revol Wireless Inc., Mobile Posse Inc. - which puts promotions and other content on idle cell-phone screens - this week brings its product to market, hoping the momentum will lead to a successful fund-raising round and further expansion.
The product rollout is limited to Cleveland, Indianapolis and surrounding areas. But Mobile Posse executives say they have gotten strong interest from two "Tier 1" carriers, which they declined to name.
"Everybody's talking about advertising on cellphones, but this really is a better mousetrap," said Jack Davies a Mobile Posse strategic advisor. Davies, like other executives at the Tysons Corner, Virginia-based start-up, is a former America Online LLC executive.
Mobile Posse employs "idle-screen ad insertion." Ads appear on cellphone screens without disrupting the phone's operation. If a customer declines to click on it, the ad dissipates.
Acuity Mobile Inc. and Third Screen Media Inc. have worked on similar technology in the U.S., and U.K.-based Celltick recently got an $8.5 million round of financing for idle-ad software.
"The hook from consumers' perspectives is that we can deliver sports scores, weather, anything that people would use a browser for," said Jon Jackson, the company's chief executive. "I don't see anyone else doing what we do."
Mobile Posse teamed up for a trial run with Cleveland-based Revol Wireless, which owns its own spectrum and wireless network. The companies are encouraging Revol customers to allow ads on their cellphones in exchange for incentives like free ringtones, cheaper rates and delivery of other content, like stock quotes.
"The results were stunning," Jackson said. "We had 80% to 90% customer satisfaction, which is unheard of."
In a news release, Mobile Posse said the trial run achieved a 16.5% click-through rate, some 64 times the average of Internet advertising.
Starting Wednesday, Revol customers will be able to download Mobile Posse ad software, and new Revol phones will come equipped with the feature. Revol does not give information on the size of its customer base, or about the number of new phones it expects to sell in the coming months, Davies said.
Mobile Posse has been funded by angel investors, including former Cleveland Browns quarterback Bernie Kosar, who has lent a hand with promoting the company. But the product rollout -- as well as the talks with top carriers - will likely lure institutional investors, Jackson said.
"We will be looking to raise $6 to $7 million, and using that to expand and vie for other carriers," Jackson said.
Executives would not give the company's valuation.
