Placed CEO: In the Real World, It’s People — Not Places — That Matter
It’s a effort that’s as diverse as it is ambitious. Mapping applications like Waze use data collected passively from a user’s smartphone to track traffic patterns in real time. Advertising technology startups use the device identifiers and bits of location data which publishers include in ad requests to build profiles on users, labeling them as “travelers” if they frequent airports or sports fans if they go stadiums. Then, there’s the pure-plays — so-called offline analytics firms that use everything from wi-fi data and surveillance videos to count, measure, and analyze how people move in, and between, stores.
Placed is one of those pure-plays. The three year-old startup tracks the whereabouts of over 100,000 consumers who have opted-in to a program with the company, and uses that data to help marketers analyze activity and measure performance of marketing campaigns.
In the lead up to Street Fight’s Local Data Summit in Denver on February 25th, we’re taking a deep dive into the world of local information, speaking with some of the sharpest minds in the industry about using the data to make businesses more efficient, and to make experiences richer for consumer. Street Fight recently caught up with David Shim, the company’s founder, to discuss the ins and out of charting consumer behavior in the real world.
Today, businesses have access to reams of data online. Why do they need to measure and analyze what consumers do in the physical world as well?
The easy answer is that is 90% of retail transactions still happen in the physical world. If you look at everything else that companies measure online — email opens, clicks on an ad, traffic on a website — all of those are quantified because a single percentage increase in engagement can result in a $10 million improvement to a bottom line. When you think that said commerce represents less than 10% of retail transactions, now look at the other 90%. Imagine being able to use data to see a 5-10% increase in a channel that represents 90% of your revenue.
Many of these physical analytics startups have modeled their businesses off of the tracking companies that built big business online. There’s obviously a number of similarities, but what changes when you move offline?
With the development of offline analytics, there’s a number of tech limitations that didn’t exist online. With online analytics, cookies change everything. Yes, some say they’re dying but they’re still a standard. When you go to a website, a publisher or retailer will drop a cookie into your browser and then can measure exactly what someone does on your website. In the physical world, that capability has never existed.
Now, with the adoption of the smartphone, there’s an opportunity to leverage use the device as a persistent cookie. But there are new difficulties. For instance, if you want to measure in-store behavior, there’s often a need for additional hardware (e.g. iBeacon). It’s going to face a similar roadblock for these companies as near field communication (NFC) saw with mobile payments.. In the end, I’m betting it’s going to look a lot like the NFC chip.
How big is this opportunity? Do you see in-store analytics companies like Nomi and Euclid as competitors, or complements to Placed?
It’s complimentary. The way to think about it is that Euclid is very much like an Omniture or Google Analytics. They’re measuring deep detail at the site (e.g. store level). We’re going in and saying: “Here are the demographics of people who are going into your stores. See it as click stream activity: you can start to see that path before they went to that website.” They tell you about what the user does; we tell you who the user is.
Let’s talk disruption. Who loses when offline analytics tech wins?
There haven’t been too many companies that have focused on local data, so there aren’t too many incumbents to throw off right now. The adoption of the smartphone has made this data available at scale for the first time. Having said, that, there’s an industry of survey and research groups that are being threatened by this technology. Mystery shopping companies and other firms that send folks into stores to ask questions, inspect quality, aggregate feedback. Those remain mostly pen-and-paper operations, so to speak.
On the one hand, I can say, “here’s 125,000 people and what they did in the last 30 days; or, you can pay these other companies for information from 100 paid shoppers.” For the most part, companies measure where people go in through surveys. They’ll ask a person whether they’ve gone to one of 200 businesses in the last week. It’s about recall, not fact.
We often talk about the local technology industry as interdependent stack, in which each sector drives the success of the other. How does the growth of the industry as a whole affect the adoption and use of local data?
It helps alleviate that edge case step. If someone has bought into the value of in-store measurement, they’re thinking quantitatively. They’re going to want to measure where that customer goes after they’ve left. How many people did this ad actually drive? Did I target the right people? Once they understand the value data represents, they’re going to ask more questions.
I really don’t see those two worlds colliding. The whole everything-in-one-place model hasn’t worked outside of Google for the desktop web. And there’s nothing that says it will will work in mobile.
Steven Jacobs is Street Fight’s deputy editor.
Find out more about how big data can be used in local context at Street Fight’s Local Data Summit, taking place on February 25th, in Denver. Learn from and network with some of the top local data experts in the country. Tickets just $399 until January 23rd. Buy now!