• by Mark Walsh  @markfwal, March 18, 2011

CheckPoints has quickly emerged as a contender in the location-based marketing space, competing with shopkick, Foursquare, Gowalla and Placecast. Its mobile shopping app of the same name lets users scan products at a wide range of stores to earn points toward rewards from participating marketers and brands. It was co-founded last year by brothers Mark and Todd DiPaola.

Previously, the two launched performance-marketing company Vantage Media, which was sold in 2007 for $150 million. Online Media Daily recently spoke with CheckPoints CEO Mark DiPaola about the Los Angeles-based company.

OMD: Can you explain briefly how the CheckPoints system works?

DiPaola: CheckPoints is a mobile app that rewards users while they're shopping. Every time consumers enter a store, they simply look for products featured on the CheckPoints platform and scan them. They receive exclusive content, like games or coupons, as well as points, which are instantly redeemable for real-world rewards like iPads, airline miles, and more.

OMD: How does CheckPoints make money?

DiPaola: Our advertisers, such as Unilever and Procter & Gamble, pay us to have their products featured on the platform. When a user walks into a store that sells -- for example -- Cover Girl, we show the  Cover Girl product and give them an opportunity to scan it.

We get paid on the engagement -- when someone picks up the product and interacts with it. When they scan it, they also receive a marketing message. With Tyson Foods, we had a flip-the-chicken-over-the-goalposts game that took two seconds to play, and nearly 100% of users who saw it played it. From that to an opportunity to "Like" the brand on Facebook, to what Lionsgate is doing, which is when you pick up one of their DVDs in the store you get a trailer for that DVD.

OMD: How many active users to date and app downloads?

DiPaola: We have more than 600,000 users and over 1.5 million in-store product engagements. 

OMD: This is getting to be a crowded space. What do you see as the key advantage(s) of CheckPoints over other mobile shopping apps?

DiPaolo: CheckPoints is the first app that's proven to materially influence what they do once they get there. And, because we don't require any hardware to be installed, we work in nearly 2 million store locations today from big-box stores to the corner bodega. It's a pretty big "ask" to ask consumers to take out their phone and check in whenever they walk into a store. So we want to make sure the consumer is rewarded in just about every store they walk into.

Another thing that's a bit different is that CheckPoints is not primarily a discount tool. Most of our clients offer no discounts. We move full-price merchandise...and consumers don't buy it because it's cheap, but because they're in the aisle holding the product and learning about it, and that creates an "aha moment" for the consumer.

OMD: Have any particular product categories been more popular among users?

DiPaola: CheckPoints works with brands in a wide range of categories including consumer packaged-goods, electronics, entertainment, apparel and more. By volume, the biggest single category is CPG, because that's where consumers spend most of their shopping time.

OMD: Do you have any metrics showing how CheckPoints has benefited brands or retailers?

DiPaola: We've only been live for five months, but the data is starting to come in, and it's very, very positive. Purchase intent is a key metric for many of our advertisers, and CheckPoints has proven to drive up to a 34% lift. We've also demonstrated that venues that offer CheckPoints can get more than 10 times the walk-in traffic of those that don't.

OMD: How did you arrive at that figure?

DiPaola: There were a couple of clients -- one is a big-box store and the other a quick-serve restaurant -- that offered essentially no points for walking in. Then, over time, as we built campaigns with these two partners, we raised the number of points and were able to take a look at what effect there was on the number of walk-ins each time we raised the incentive to enter the venue. The 10-fold number refers to what we saw when we raised it from 2 points to walk in to up to 50 points -- and we got 10 times as many people walking through the door. That's a good guestimate of what this [app] is capable of.

OMD: What's your reaction when you hear people talk about "check-in fatigue" or proclaim the check-in is "dead?"

Check-ins for the sake of check-ins is terribly boring. CheckPoints is different. You're not checking in to tell your friends, "Hey I'm bowling." It's not for social status. The reason our users use CheckPoints is because it makes shopping more rewarding. We call it game dynamics for grown-ups. It's points you can use for Sephora and Victoria's Secret and Home Depot and American Airlines.

OMD: What's the immediate focus for CheckPoints?

DiPaola: I'd say look for a significant [app] update in early to mid-April.