playcaptcha

Future Ad Labs Turns CAPTCHAs Into Mini-Games (And Ad Revenue)

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We all hate CAPTCHAs, right? Those pesky additions to web forms that try to determine if you are a human and not a computer bot with nefarious intentions. A necessary evil to fight spam and other attacks, perhaps, but conversely also bad for business, dramatically increasing bounce rates and e-commerce shopping basket abandonment.

Future Ad Labs is on a mission to change this by replacing the CAPTCHA with something more engaging and game-like, which users might actually enjoy, while at the same time creating a new kind of ad unit that brands can enjoy, too.

Today, the UK-based startup is announcing it’s raised $1 million in funding (which I understand actually closed, in various stages, last year). The impressive list of backers includes Passion Capital, who led the round, as well as Balderton Capital, Ballpark Ventures, and accelerator Ignite100.

In addition, a portion of the investment was raised via the equity crowdfunding platform Seedrs. Angel investors Scott Button (founder/CEO of Unruly Media), Richard Fearne, Damon Reeves (former CEO of Unanimis) and Paul Whitehead (commercial director at WeR Interactive) are also in the list of backers.

Calling itself an ad tech company, Future Ad Labs’ “PlayCaptcha” ad unit (because on one level that’s what it is) lets users verify they are human, to the same end as a traditional CAPTCHA. But instead of asking users to enter a sequence of letters and numbers from a blurry image, they complete a game-like mini challenge (though, intentionally, they aren’t challenging at all), such as moving an on-screen slider in a straight-ish line to unwrap a virtual chocolate bar.

However, these challenges are fully branded, meaning that users are engaging with well-known brands at the same time. That chocolate bar, for example, could be a KitKat. It’s utterly brilliant (and utterly depressing if you have brand overload). Of course it’s also how Future Ad Labs and the sites it works with generate revenue. Not only is it solving an end-user problem, but it’s worked out a way to make money without being detrimental to the experience.

Noteworthy is that “PlayCaptchas” have been measured to have a 92% success rate (23% higher than standard CAPTCHAs) and 90% brand recall, according to the company.

It’s also one of those ‘why didn’t anybody think of this before?’ ideas. Unsurprisingly, however, other companies are operating in the same space. Future Ad Labs’ competitors include NYC-based Solve Media, and Are You A Human.

That said, the market opportunity is huge. Globally 300 million CAPTCHAs are completed per day. Meanwhile, I’m told that Future Ad Labs is on track to hit “7-digit revenues” in 2014. I’ve also heard from a source that the company recently hired away a VP of sales from a well-known legacy online gaming company, presumably to help boost ad revenue.

Future Ad Labs has already launched with the National TV Awards and the BBC (it was part of BBC Labs). On the brand side it’s secured campaigns and revenue from Heinz, Reckitt Benckiser and Nestle, among others.