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Kiip builds advertisers’ offers for free products into the experience of using games and apps on smartphones.Justin Horrocks/Getty Images/iStockphoto

There is no getting around it: a great deal of mobile advertising is ugly.

The platform's importance has gained recognition with marketers, but many are still figuring out how to serve ads on that tiny screen. They can build an app designed around the brand, but who wants to download something just for the privilege of engaging with a commercial? They can design a banner ad as they do online, but tiny screens make those displays barely legible, with no space to do much but beg for users to click through.

A Vancouver native based in San Francisco, Brian Wong, believes he has a different solution. His startup, Kiip Inc., inks partnerships with the games and apps people are already using on their phones, and, instead of cramming ads onto the screen, builds advertisers' offers for free products into the experience of using those programs. Rewards appear when users pass a level in games such as Aerox or Mega Jump, for example, or when they log exercise in Map My Run. He raised $15.5-million (U.S.) in venture capital funding this year and last, and has been growing his pool of advertisers in the U.S., including Procter & Gamble, Pepsi and Sony. A couple of those U.S. advertisers, American Express and PopChips, have done campaigns in Canada as well. But so far, he has had some trouble selling the idea to advertisers here.

Now, Kiip has done his first deal with a major Canadian company. Scene LP, the loyalty program run as a joint venture by Cineplex Inc. and Bank of Nova Scotia, has launched a campaign that will run through the end of December, targeting young moviegoers with a reward of a free movie when they use their favourite apps or play games.

The offer comes in Scene points, the program's currency. Users must sign up as Scene members, giving the company access to valuable customer data, in order to redeem the offers.

"Mobile has become an extraordinarily important component of our marketing initiatives," said Cineplex's vice-president of communications and investor relations, Pat Marshall. She says the company considers this a test run of Kiip's campaign, and they are watching the returns closely.

Kiip's business pitch is part of a larger climate of growth for mobile advertising, as marketers try to suss out how best to speak to their customers on the devices they keep closest to themselves. This summer, for the first time, the Cannes advertising festival launched a mobile category in its awards show.

When Kiip began selling its rewards-based ads last year, it had partnerships to do so in just 10 games and apps. By July of this year, it was in 400. It has now expanded to 600, with games making up the bread and butter of its traffic, and is now expanding to include more apps such as food and recipe programs. Kiip now has deals with 60 advertisers, and in October it offered up rewards 19.2-million times.

"Our inventory has grown. That helps a lot with the conversations with advertisers," Mr. Wong said. Another Canadian company, a retailer, will be launching a Kiip campaign just before the holidays.

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