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This startup is chasing the next frontier of advertising – smartphone homescreens

enkinoFacebook is perhaps the most engaging app in the world, with 1.15 billion monthly active users and a staggering average daily usage of 20 minutes. But if there’s something people look at more than the social network, it’s probably their smartphone homescreens.

That’s what EnKino, a startup out of South Korea, is counting on. It wants to turn homescreens into advertising space that can be sold to brands for a premium.

The idea’s not as ludicrous as it sounds – a company doing something similar has found that its users are unlocking their phones an average of 110 times a day. Startups like India’s PaisaSwipe and Korea’s Cashslide are paying users to view ads on their lockscreens. Even Facebook wants to put ads on homescreens, which means we might have an advertising landgrab on our hands.

Of course, very few people want their phones bombarded with ads unless there’s a strong incentive. To address this, its consumer app Kino doubles as a wallpaper changer where users can pick images from brands or based on themes. The service isn’t restricted to static images though as it runs animated wallpapers.

According to Shawn Park, co-founder and CMO at EnKino, the service is showing promising traction, with 140,000 monthly active users (who open the app) out of 320,000 downloads. Available on Android only, most of the app’s users, in order of quantity, come from Korea, the United States, and Germany.

“Like Snapchat, we have mostly young, female monthly active users who change their wallpapers an average of two times a week,” says Shawn. Out of all these users, 60 percent are female, while 55 percent are under 25 years old.

The company has already begun monetizing its user-base, earning $100,000 in revenue from fixed advertising campaign fees in 2012 for Adidas, The Avengers movie, and more. The Adidas wallpapers actually showed links that went to the brand’s Facebook page and an online store.

Kino plans to reach out to movie distributors, K-Pop agencies, fashion brands, and game publishers for content, and it can charge for cost per action based on game downloads.

Besides the ability to pick a curated set of wallpapers, users can pick images that others upload onto Kino. The app also lets users remotely “zap” wallpapers onto their friends’ phones without notice. Of course, they would need prior permission first from the friend in order to do so.

“It’s a fun thing, but also helps a brand’s ads go viral,” he says, adding that users can opt to block such changes if they desire. So far, the company has seen about 10,000 zaps in the past month.

Creating an app like this has several technical challenges related to network bandwidth and computing resources. To make animated wallpapers feasible, the service converts moving images into its own format. The app also takes up only three percent of total resources on the phone, much less than the OS itself.

Started in August 2011, the app has so far gotten funding from one angel investor. If it is able to grow its user base further and secure more revenue, it may reach an enviable position of not needing follow-on funding to survive. Nonetheless, it is open to investments if it makes strategic sense.

Currently, the startup is seeking partners that can help it expand overseas and get its app in front of more users.

(Editing by Paul Bischoff)


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