Postr is setting its sights on Android lock screens in Australia and New Zealand, aiming to transform them into a medium for high-value advertising and customised content.
The New Zealand startup is pursuing a pay model under which users receive 3 cents for hosting an ad.
Only 16 months after the company's founding, Postr is already claiming traction, with around 10,000 active users. This month, it also announced partnerships with Metservice, daily deals website GrabOne, and New Zealand Herald publisher NZME.
Those partnerships will deliver relevant content for users without them needing to unlock their phones, founder Milan Reinartz said.
Reinartz is aware of the pitfalls that have derailed similar efforts in the US and elsewhere, but is relying on his passion for UX design and advertising industry experience to steer the company to success.
US app Locket, for instance, launched with a pay model but had to back away from it when cash flow issues emerged. Others are still targeting the market, and sometimes similarly falling by the wayside.
Reinartz said the fact that there is no lock-screen startup of any scale in Australia or New Zealand made it attractive. He has also avoided the potential for "swipe fraud" by not incentivising swipes, but simply hosting the ad.
Because the company is handling cash, security is vital, he said. That's why Postr was developed as a native app rather than a hybrid.
Users can choose from receiving their "pocket money" direct to their bank account, or can gift it to charity. Reinartz said 7 percent choose the charitable route.
Soon Postr will also offer Google Play credits, Amazon, and Paypal, he said.
The app is not available for the iPhone, as Apple doesn't allow access to the iOS lock screen. However, Reinartz said a different kind of app for the platform is being contemplated.
A prototype app was developed by current CTO Mark Penman within three months, and tested with a small group of users.
The app was optimised from that feedback, and launched in the middle of 2014. It allows users to aggregate and personalise the kinds of ads and content delivered to them.
GrabOne offers and the Metservice's five-day weather forecast, for instance, are personalised by location.
Users can even choose to turn all ads off, though Reinartz said only two out of the 10,000 current users have chosen to do so.
The result, he said, is extremely high engagement rates. Click-throughs average 2.4 percent, and the unique click-through rate is 10 to 30 percent. Users then also spend a long time on the sites they have gone to.
Another reason not to incentivise click-throughs is because paid clicks are simply not as valuable to advertisers, Reinartz said. Accidental clicks are also avoided on Postr, because two motions are required.
"People opt in. It's a solicited, single-minded advertising experience. They asked for it, and it's not competing with content."
Currently, ads are hosted for 30 minutes, but as inventory builds, Reinartz expects that to move to a 10- to 15-minute cycle.
Reinartz said Postr is likely to integrate with ad exchanges because the business will be too hard to scale manually. However, such integration will have to be done carefully to deliver a satisfying experience for users.
"I'd like there to always be an element of premium, lock-screen specific ads on top of ads from exchanges," Reinartz said.
New Zealand has been a great test market, he said, but Australia is the next target, and is more advanced in mobile advertising.
"Mobile is the largest growth advertising segment within the largest growth category, digital," Reinartz said.