Confronted with a modern familiar parental problem on Father’s Day a few years ago, Steven Brown and his cousin Leonard Butterman devised a solution that they believe has the potential to transform the global mobile advertising industry.
“Between the two of us we have five older kids,” Brown said. “Kids don’t really talk to each other anymore in the same way and they were sitting at the table texting. That’s when we came up with the idea for the SlamAd app.”
Investing in the premise that texting, not dialling, will be the dominant communications mode of the future, SlamAd will place adverts, which inside text messages and then pay the user every time an ad appears. The ad will be located inside the message and not form an additional text. Users can access the money and cash out in gift cards or cash out.
The sender and recipient both view the discount via text but the sender accumulates money in their SlamAd account. The platform is on the phone and users redeem their compensation through email. They can receive gift cards, pay for college tuition through a 529 plan or be able to make a charitable contribution with any SlamAd cash they receive. The maximum monthly cash commission is $50.
“We felt there was a huge untapped market for texting and that there was nobody putting advertisements into the texts,” Brown said. “So we developed a patent-pending technology that embeds ads into the bottom of the text message. We have been able to come up with the technology on how users can get paid to send ads.”
The SlamAd founders come from a family of inventors- their grandfather invented plastic baby diaper pants- and they project that revenue will flow from digital advertising partners aligned with the start-up.
They add the app is unobtrusive and it is easy to opt out. “Each time a certain number of texts go from one user to the other the app will identify what type of conversation they’re having and an ad will pop up,” Butterman said. “They won’t be banner ads but redeemable instant discounts. So the opportunity of the ad is valuable to them and the sender will receive money in their account.”
The patent for SlamAd’s technology is pending and the company is going into a second round of fundraising before officially launching, having closed a $1.25 million seed round of funding from strategic investors in 2015.
“We had to be mindful when we were coming up with the concept of introducing advertising into text messaging that we were in compliance with federal regulations,” Stacey Schneider, the company’s legal counsel, said. “The technology had to be designed very carefully in order to comply with them. We feel now like we’re on the cutting edge of getting it right for mobile and the law will be catching up to us.”
Will the cash-for-ads-via-SMS concept work? SlamAd execs say it already is working, on the evidence of the reception the app generated at the TechDay trade show in New York last May. “The demographic that the product is targeted at went crazy,” Schneider said.
“When the general public came in they were lining up just to sign up because of the opportunity of earning the cash just for sending a text message. The product caught on really quickly.”
Just from the proof of concept being unveiled at the trade show, SlamAd made it into the Top 100 Communication apps on Google Play. “People can choose not to go further with SlamAd,” Schneider said, “but the beauty of it for the ad industry is there’s a 99% ad open rate because it’s in the form of a text message as opposed to being an ad on Facebook or Google where the consumer might well not click on it.”
“It’s not an albatross, it’s something that users want to accomplish,” she added. “We’re being respectful of the user in that our ads are sporadic, short and simple . Our users want to see ads so it’s the opposite model to the rest of the industry where media companies try to almost shield their users from too much advertising.”
SlamAd is primarily aimed at 13-30-year-olds who send an estimated 120-130 text messages a day. But the option to donate cash to charity or make a payment towards their college 529 savings plan is their attempt to capture the older demographic.
Jon Kraft, co-founder of Pandora, serves on SlamAd’s Advisory Board and is a shareholder in the company while rapper Flo-Rida is an Ambassador for the app.
“In the US we are catching up because countries in the U.S. and Europe are way advanced to where we are and use a lot more texting than we do,” said Steven Brown. “But we believe this is the strongest communications platform in the U.S.- there are still 500 million text messages that are getting sent every day.”
“This app is just the beginning,” he added of SlamAd’s ambitions. “We have plans in the works for multi-platform use of our patent-pending technology for all aspects of mobile commerce across the world.”
