With New Products, Factual Aims to Make ‘Big Data’ Smaller

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5ca5f_factual_logo_dec10Sometimes, less is more. For Factual, one of the early big data players, it’s a lesson learned in petabytes.

After five years of ingesting, cleaning and packaging the world’s information, the startup is focusing exclusively on local, improving its geo-fencing product and moving up the data stack to build out a location analytics business. The company announced this morning that it has launched a new line of services aimed at helping mobile developers, publishers, and marketers make sense of the reams of location data collected from consumers.

The new product, Geopulse Audience, will allow app developers to send large amounts of latitude-longitude data, generated intermittently from user’s mobile devices, into Factual’s algorithms, and return a set of demographic, behavioral, and geographic insights about the user to the publisher.

It’s a move that puts the firm, which traditionally has stuck to selling the raw data, squarely within an emergent location analytics market. Tyler Bell, the company’s director of product, says that as the industry has expanded beyond local search, Factual recognized that it needed to provide the tools, and not just the raw material, to make its product valuable across a number of industries.

“You cannot build this business just on selling data. Raw data plays have very much been designed for local search: ‘Here’s something. What’s nearby?’” says Bell. “Today, the use cases for local data are evolving. It’s about marketing, it’s all about analytics, it’s about advertising, and we were not exposing our location data in a very specific and valuable framework. We’re still all about data, but the question is what products can we create to take some of the foundational burden to our partners.”

Since raising a $25 million round from some of Silicon Valley’s most iconic venture firms three years ago, the company has sharpened its focus, sacrificing breadth for depth in local. The transition began in 2010 when Factual scored a big contract with Facebook to help the social network normalize and build out its international point-of-interest database. Recognizing the unique challenges of working with location data, Bill Michels, Factual’s VP of business development, brought in Bell, a former colleague at Yahoo who headed up the product for its geospatial division in the late 2000’s, to pad the company’s location data expertise and build out key products like its resolve and crosswalk APIs.

But it was not until recently that the company, one of the early stars of the big data movement, decided to direct all of its resources toward local information. Late last year, Factual dropped its other initiatives, and put its full weight into improving its local dataset and making that data valuable and consumable for its customers.

The new products are a logical next step for the company as it works to navigate both its own economics and a data landscape in which an economy of scarcity has been replaced by startling abundance. More and more, mobile applications are accessing a user’s location to support ancillary features like geo-tagging posts or finding nearby articles, and many of these publishers periodically cache coordinate data from a user’s device, storing it on servers for ad targeting or product personalization later on.

The challenge is in making sense of that information. With its Audience product, Factual cleans those datasets, and then develops profiles for each user, which can tell a developer’s demographic information (like age and income) as well as behavioral data (like when a user commutes to work or where they spend their time on the weekends). It also buckets users into familiar marketing segments like “business traveler” or “college student” as well, an increasingly popular tactic among mobile ad tech companies like PlaceIQ and Verve Mobile.

But Bell stresses that advertising is not the endgame for Factual. Although advertising is a fertile market, he wants developers to use the service to customize content and build contextual features into their consumer products as well, tailoring the experience to the audience profiles, which Factual’s API serves up.

It’s a sentiment that likely stems from a recognition of the emerging set of privacy issues facing the hyperlocal space. As location algorithms improve, and publishers can track location more frequently with a marginal impact on battery life, the amount of available data is exploding. Meanwhile, rapid advances in the ability for systems to digest, analyze, and act on data in real-time mean that marketers can do more with a byte of location data today than they could a few years ago.

The result is a catch-22 of sorts for data companies in the local space, many of whom have built their business around the mobile advertising market: as the technical capability to draw inferences from data rapidly improves, the privacy expectations largely stay the same. The question for mobile marketers is how consumers will react when they find out.

Steven Jacobs is Street Fight’s deputy editor.