Kik To Pursue A Crypto-Based Monetization Strategy

At the moment more than 50% of Kik’s user base is aged between 13 and 24 years. With media firms struggling in monetizing their offerings based solely on revenues generated from advertising, the messaging app is banking on cryptocurrencies.

According to Kik’s product vice president, Alex Frenkel, the company tried a monetization strategy of employing interactive ads but found it hard competing with the online advertising duopoly of Google and Facebook. Per Frenkel Kik can chart a different path rather than be competing with the Google-Facebook duopoly and instead focus on creating value for its users.

One of the ways Kik could do this is by generating revenues from the brands that are involved in promoting surveys. The messaging app could achieve this by offering incentives for its users to share content. Currently, Kik holds an undisclosed amount of the Kin (KIN) cryptocurrency that was rolled out last year on the blockchain of Ethereum (ETH).

Kin Foundation to Oversee the Development

Development of KIN will be overseen by the Kin Foundation and the body recently announced that it was creating its own blockchain which will be a hybrid of Stellar (XLM) and Ethereum. Users will be able to buy the digital currency on crypto exchanges which they can then use to purchase emoji-like symbols or stickers which will be utilized in communication with other users of the platform.

About half a year ago brands were allowed by Kik to give users the digital currency after answering a survey or other small tasks. This was with a view of getting users of Kik to perform these activities and in the process earn digital currencies which they can they can spend online on gifting platforms such as Blackhawk which recently partnered with Kik. The ultimate goal is to offer redemption opportunities to various retailers including Home Depot, iTunes and Target. Per Frenkel, Kik aims to make Kin the most highly used digital currency in the world.

Transfer of value

Other ways that KIN could be used is to transfer value with regards to peer-to-peer interactions. This way the KIN cryptocurrency could be awarded as a goodwill gesture or a thank you.

One problem for Kik is that most of their users are under banked or unbanked. Thus these users are unlikely to be able to purchase Kik using credit cards and have to earn it instead. Additionally, a platform like iOS does not allow users to be offered currency by digital currency apps after the completion of tasks.

This comes in the wake of forming a partnership with the biggest avatar-based social network in the world, IMVU. Under the partnership, IMVU will be connected to other services that use Kin and this will allow users of the avatar-based social network exchange their credits for traditional currencies. It is estimated that more than 50% of IMVU users use Kik. Over 70% of the users of IMVU are women and KIN is thus expected to reach a demographic that is untapped.