There’s a trend among startups that’s the technological equivalent of the reverse commute: rather than replicating brick-and-mortar industries online, a new batch of startups has brought digital tools, built for the Internet, to the physical world. Now one company wants to bring comScore to the physical world.
Placed, a two year-old startup based in Seattle, has spent the last two years passively tracking the physical movements of over 70,000 smartphone owners who chose to share their location with the company. Today, the venture-backed firm is opening that data to marketers, launching a Nielsen-like ratings service called Placed Insights to help advertisers intelligently buy location-targeted advertising.
The service, which draws on over 13 billion latitudes-longitudes paired with billions of other demographic and sensor data points, could tell a retailer, for instance, where Hispanic women between 18-35 tend to go after visiting their store, says David Shim, the company’s chief executive. Marketers can use that information to buy mobile or digital-out-of-advertising in the same way that comScore or Nielsen ratings help advertising purchase TV spots or online ads.
“We’re applying core web technology, in the sense of being able to quantify movement, and applying that to physical world,” said Shim. “Where everything is going local, advertisers need a base to say, what is normal and how do I actually start to buy against location.”
Shim, a longtime veteran of online analytics companies, imagines the service as the local web’s rating service, measuring the activity in physical places as Comscore would measures visits on websites. The company can bucket locations based on the type of visitor (Hispanic, mother etc.), as well as by their relation to one another (places frequented by people who go to Target).
The concept of segmenting locations by the type of audience is not new. PlaceIQ, which analyzes data from hundreds of sources to create profiles for 100 meter by 100-meter areas, pioneered the approach, and has spent the last year pitching the model to agencies on Madison Avenue. And earlier this year, Verve Mobile, a local mobile advertising network, launched a similar product.
It’s the sourcing of data, however, that separates Placed from its predecessors. Whereas PlaceIQ aggregates data from a number of third-party providers (vendors like advertising exchanges or search engines), Placed accesses the information directly from users and owns that relationship. That gives the company a distinct edge, both in the precision of its dataset as well as in the ability to understand movement — the way in which individuals move between locations — and not just who is where, when.
To convince customers to share their location, the company offers users a small reward or, the option of donating to charity on their behalf. Placed will also cut a small check to application developers, which have access to users’ location, for adding an SDK to their app that gives Placed access to location and sensor information of users who opt-in.
As a business, the startups success is pegged to the growth of location targeting in mobile as well as other location-centric media such as digital out of home. The more brands that buy ads based on location data, the greater the need for a service that tells them what that location data means.
It’s still unclear what role location will play in mobile advertising. With cookies functionally irrelevant on mobile devices, there’s a finite amount of data the companies can use to target ads and location data has fed off that scarcity to a degree. However, a number of companies like Drawbridge and Tapad, which allow advertisers to target ads across devices, could effectively put an end to that scarcity, and with it, clip the growth of location analytics and targeting industries.
Steven Jacobs is deputy editor at Street Fight.