Tournament-game platform startup Grantoo announced today that it has delivered great results in mobile ad campaigns that go beyond typical banner ads. In campaigns with the Hilton Hotel Group and U.S.A. Networks, Grantoo shows ads to its mobile game players during brand-sponsored tournaments.

The tournaments are embedded within the mobile games that have integrated Grantoo’s platform. They provide a seamless, branded experience for the player inside those games. For the brands, it means they can reach audiences that are heavily engaged inside their favorite games. That improves engagement dramatically and provides game developers with an additional source of revenue.

The average mobile banner ad had a clickthrough rate of 0.88 percent in 2012, and a lot of that is accidental. This is because a banner ad in a mobile game is largely seen as a distraction that players want to skip. Grantoo provides “beyond the banner” experiences that integrate the brands into the game experience as players challenge their friends to duels. The sponsor brands the tournament screens and rewards players for participating. The tournament prize is a donation to the player’s favorite charity.

In the Hilton Hotel Group and U.S.A. Networks campaigns, 5.42 percent of players accepted branded rewards in Grantoo’s tournaments, which provide a deeper connection to over six times more users than mobile banner ads. Grantoo achieved this while overdelivering 92 percent on campaign volume expectations, showing that such performance can be maintained with larger audiences.

Mary Meeker, an internet analyst and partner at Kleiner Perkins Caufield & Byers, says that mobile ad spending lags behind other media, accounting for only 3 percent of national ad budgets, even though mobile accounts for 12 percent of a consumer’s time these days. Bridging that gap is a $20 billion opportunity, Meeker says.

Grantoo recently partnered with HipCricket, a subsidiary of Augme Technologies, with a $2 million guarantee to provide premium clients.

“Grantoo is the best beyond-the-banner mobile advertising solution,” said Jon Nolz, the vice president of mobile advertising at Hipcricket. “Running our client’s campaigns on their platform has outperformed expectations and delivered amazing results.”

Hipcricket’s Nolz will be speaking at the MobileBeat 2013 conference on Tuesday in a session dubbed “Beyond the Banner: the Future of Mobile Engagement.”

Grantoo was founded in 2011 by Dimitri Sillam and Mikhael Naayem. It has raised $2.5 million to date and has 12 employees.

Grantoo is both a for-profit and not-for-profit company. Grantoo created the Grantoo Foundation to which tournament sponsors write their checks. So 100 percent of the foundation’s money goes to winning students and charities. Because of this foundation structure, companies’ donations are tax deductible.

For companies that want to sponsor regular games (no tuition prizes) and advertising, the money goes to Grantoo, the for-profit company. Grantoo plans to host regular games all the time with tournaments as special events for students.