"Gamification" is the new hotness amongst fashionable social media types, it seems. But what's it all about? In simple terms, apps like Foursquare, Gowalla and GetGlue make relatively mundane things more "game-like" and thus encourage people to take part in various activities. Providing people with rewards for doing real life things like checking in to their favorite coffee shops or reviewing their favorite movies makes them more likely to come back and do it again. All very fun, but advertisers have long been asking how they might be able to leverage this sort of thing for fun and profit. Well, mostly profit.

Seven month-old startup Kiip (pronounced "keep") might have come up with an answer by looking at gamification from the opposite direction. Rather than rewarding people for real life activities with game-like rewards, Kiip seeks to reward people for in-game achievements on mobile games with real life rewards.

The people behind Kiip, ex-Digg employees Brian Wong and Courtney Guertin along with eightbit.me co-founder Amadeus Demarzi, came to the conclusion that the time at which a user is most engaged in a gaming experience is when they achieve something -- be it raising a level, completing a difficult challenge or attaining a high score. Kiip takes advantage of this heightened level of engagement by serving targeted rewards based on the demographic of the game being played. In simple terms, when a player achieves something, they'll not only get an achievement pop up, but they'll also be rewarded with some sort of real world special offer.

Kiip has partnered with a number of big brands for its experiment, including Sephora, popchips, Homerun.com, Sony Dash, Vitamin Water, 1-800-Flowers, Dr Pepper, GNC, Carl's Jr and Hardee's. Reaching certain milestones in the 15 as yet unannounced games which will support the service initially allows players to redeem coupons via email or even gift the rewards to a friend. In essence, it has the potential to become a socially-driven advertising network.

It sounds like an interesting idea -- everyone likes free stuff, right? But the screenshots for the "rewards" in question look rather obtrusive, taking up the entirety of the screen as opposed to Game Center and OpenFeint's subtle pop-up notifications. And surely there's no better way to break a player's immersion in a game than by offering them a free probiotic smoothie worth $6 while they're waiting to get back to shooting terrorists/aliens/zombies.

That said, these are mobile games we're talking about, the majority of which are quick-hit games made to be played in bite-sized chunks -- so how much "immersion" is there in the first place? The more in-depth, involving mobile games tend to be paid apps which don't include advertising, anyway. As long as these ads masquerading as "achievement rewards" don't start creeping into games that people have paid a premium for, Kiip could be on to a good thing here. Existing companies are happy to work alongside Kiip too -- since Kiip's offers only pop up when specific in-game milestones are achieved, ad networks such as AdMob and Apple's own iAds can still serve standard banner ads as normal.

Advertising, particularly when it comes to mobile apps, isn't going anywhere, it seems -- at least with Kiip's model you get some freebies to enjoy as you play your favorite games. So keep an eye out for Kiip-enabled games on both iOS and Android devices in the coming months.

This article originally appeared on GamePro.com as Kiip's real world gaming rewards