Placed is a Seattle based start-up that gathers large amounts of location data through users’ cell phones, and then sells that data to business that want to gain insights into customer behavior, and want to improve and gauge the effectiveness of their mobile advertising efforts.
Placed already tracks locations for over 100,000 users on their mobile phones. User’s need to give the Placed app authorization to track their location and to run in the background. The phone then sends Placed its geo- coordinates a 1000 times per day. Using backend software, Placed is then able to match up these coordinates with physical locations out in the real world. This offline user profile data makes up the backbone of the value that Placed is able to provide potential customers through its services.
One of Placed’s biggest challenges is getting diverse enough data from these users. Even though this data supplies Placed with the information needed to sell to businesses, Placed largely views these users as their primary customer – they know that the value the company is this data. In order to ensure they are getting a constant stream of data, Placed compensates users with points that can be redeemed for rewards. Users also have the option of earning additional points by completing in-app surveys (which in some cases can originate from businesses that are Placed customers). Getting these users to allow location tracking has been difficult – according to CEO David Shim, significant amounts of hard work was put into SEO optimization and Facebook/Adwords advertising to attract people to their website.
The above approach was difficult and expensive, and Placed knew it needed to be more strategic. Placed recently came up with an innovative idea to reach new customers – to work with other app developers. Placed provides the opportunity for app developers (for apps that have nothing to do with Placed) to get their users to opt to share location data. In return, Placed pays the developers an affiliate fee – this allows developers to monetize their apps in ways other than advertising revenue, or in-app purchases. This also enables Placed to get diverse data, and reach user bases that they would otherwise have extreme difficulty reaching. Now Placed can spend time recruiting developers as partners, knowing that each partner they acquire will yield 100s or 1000s of new users.
With the data it gathers, Placed is now able to go after paying customers, and has in fact created a new market for this kind of data. Being able to commercially track the location of a person based off their cell phone wasn’t possible until only ~3 years ago. Businesses were now able to gain insight (in aggregate) into what other stores their customers visited, or what kinds of places they liked to visit, thus extrapolating a customer profile based off their physical behavior. This level of in depth information was never available, and Placed realized that there were significant number of consumer related businesses that were willing to pay for this data.
A little later in the company’s existence, Placed began to disrupt an existing marketplace with their product Placed Targeting. Placed proudly asks – “Why only target a mobile ad against a single place?” referring to the existing market of mobile advertising which tends to only use geographical location of a user. With Placed Targeting, advertisers are able to incorporate not just location, but patterns and history of locations. With this kind of targeting, Placed has demonstrated higher click through rates than traditional mobile advertising (that were based solely on geographical location). Placed is also disrupting the existing market for measuring mobile ad engagement; partnering with ad service agencies, Placed is able to now provide data on not just click through rates or purchases, but data on how often an ad impression resulted in a user actually visiting the physical store.
Placed believes it is only beginning to scratch the surface with location based data. They invested considerable amount of time acquiring and researching their data, so much so that they spent the first 12+ months without any actual paying customers. They use significant amounts of inbound marketing, publishing data on their blog and publishing in depth white papers. Placed had businesses asking them for a product and data before they were even ready to start servicing. To this day, they continue to rely largely on inbound marketing (combined with a small sales team) to acquire new customers.