Placed Raises $10M to Help Mobile Advertisers Ditch Clicks

There’s an increasingly common refrain among mobile advertising types these days: clicks, in and of themselves, don’t matter. This thinking has been around since the early days of the internet, but until recently, there hasn’t been a viable alternative to simply buying views. That could change soon.

Two Sigma Investments, a hedge fund specializing in computer-driven trading, has led a $10 million series B investment in Placed, a location analytics firm that uses Nielsen-like panels to help advertisers measure the effectiveness of advertising in the physical world. The three-year old startup has also announced a string of new partnerships including deals with Pandora, The Weather Company, and RocketFuel which it says will bring its technology to half of the top 25 publishers and ad networks in the U.S.

The company operates a panel of about 175,000 users (roughly 1 in every 1,500 American adults) who have downloaded its mobile app and have consented to sharing their location data with the company. The app runs in the background, passively indexing the consumers’ locations throughout the day. The firm can then see when its panelists view an ad, and track where those users went subsquently.

David Shim, chief executive at Placed, says the financing will help the Seattle-based startup bring its technology to the remainder of the mobile advertising industry. The company wants to make its store visitation metric, which measures whether a user sees a mobile ad then goes into a store, an industry standard against which publishers and advertisers can buy and sell mobile impressions.

“If you look at desktop web ten years ago, there were well over 30 ad servers,” said Shim, speaking about the need for standardization. “Fast forward to today, and there’s one solution in DoubleClick that works across the board. Advertisers want the same now for mobile.”

As marketers look to spend more on mobile advertising, brands and agencies have put pressure on mobile advertising firms to beef up their attribution tools. Last year, the industry responded, with a number of stakeholders releasing their own proprietary metrics aimed at connecting the dots between a consumer seeing a mobile ad and then going into a store. xAd and PlaceIQ — two of the largest location-centric mobile ad networks — each launched a similar attribution tool which used data, collected from mobile advertising networks to measure when consumers visited a store after seeing an ad.

Meanwhile, some of the largest mobile publishers are turning to offline payment data to help demonstrate the value of their ads. Facebook and Twitter have both announced partnerships with Datalogix, a firm that aggregates offline spending data, last year to help demonstrate the effectiveness of mobile ads in driving in-store sales. And earlier this month, data giant Acxiom acquired LiveRamp, a decade-old data aggregation company that compiles CRM and other transactional data for advertisers.

Like many mobile ad technology companies, Placed’s prospects run squarely through Facebook and Google. EMarketer expects that the two tech giants will control more than two thirds of all mobile advertising revenues this year, with Pandora, YP, and Millennial Media each representing less than 2% of total spending. In order to actually become a standard in mobile, the company will need to bring one, if not both, of the big technology companies into its fold.

But Placed is also looking beyond the mobile advertising industry to seed new markets for its data. Shim hinted that the firm’s location data could have applications in finance, working with data-driven trading firms like its new investor Two Sigma Investment to anticipate changes in consumer demand. The hedge fund could use the data collected through its panels to anticipate declines in foot traffic to retailers’ stores, and use that information to short the company’s stock.

As the mobile device becomes the central device for consumers, there’s an opportunity for data firms like Placed to help measure and monetize other bits of consumers digital lives. Shim suggested that the company could eventually integrate with other applications or sensors on mobile devices, bringing in everything from a user’s browser history to their purchase behavior on Grubhub or Amazon.

The success of Placed, and the prospects for the company’s growth, underscore the growing importance — and value — of consumer data to the marketing industry. The continued growth of the digital advertising industry, paired with the adoption of programmatic exchanges, will dramatically expand the market for accurate and reliable consumer data in the next few years.

What’s more, the lack of a common browser means that mobile applications rely on much deeper integrations to share data between properties. That means that marketers and data firms can no longer aggregate consumer data without consumer consent. As consumer spend more time on their mobile device (and create more data via mobile as well), the analytics industry will face a much more empowered consumer than ever before.

Steven Jacobs is Street Fight’s deputy editor.