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Mobile Advertisers, Have You Found Your Place?

Supermarkets with an app that can direct mom shoppers to their aisles are more appealing than those that simply brand themselves as more "high-end."

David Shim, Placed's CEO
David Shim, Placed’s CEO

High-profile specialty food stores like Whole Foods and Trader Joe’s may get a lot of respect and attention for making the quotidian chore of grocery shopping feel both good for your family and the planet, but research from location-data provider Placed suggests that when it comes to attracting one of the most powerful consumer segments, the more mundane-seeming chains like Kroger’s exact a more powerful pull.

We’re talking about mothers, of course. Placed found that in November 2013, 13.7 percent of mothers in the U.S visited a Kroger grocery store; 6.5 percent stepped foot in an Aldi. Specialty grocers were apparently not nearly as appealing to these women, with 26 percent of moms proving less likely to visit a Trader Joe’s location and 41 percent less likely to visit a Whole Foods.

What’s more noteworthy than Placed’s findings is how they arrived at the data: None of the statistics provided in the white paper, “Moms in the Grocery Aisle,” came from a survey or any type of questionnaire. In fact, none of the study’s participants informed Placed of their whereabouts; their mobile devices spoke for them.

Thousands of People, Thousands of Locations

“We have a panel of about 125,000 people that have installed [our] app,” explains David Shim, CEO and founder of the Seattle, Washington-based company. “The app allows us to measure their location data on a potentially persistent data.”  Through the app, which is available for free on iTunes, Placed targets users’ proximities. “We get enough location data that we can accurately predict where someone is,” Shim says, adding that the app’s technology is more precise than a geo-fence. It can relay whether a mobile device is actually in a Walmart for example, as opposed to say “within 100 feet of a Walmart.”

Those extra feet go a long way, especially when considering how much of U.S retail territory is laid out — in strip malls and shopping plazas where a Whole Foods and a Kroger’s may very well share a parking lot.

Placed’s iPhone and Android app requests that its users fill out a demographic profile and to sync up their Facebook accounts. “From there we start to get really rich data,” Shim says. “Not only do we see 1,000 locations per day, we see the demographics that go along with that. From there we then model out from where the user has been going to pinpoint where they live, where they work, all without having them explicitly tell us. And that allows us to create a larger profile of demographics.”

Upfront, Rewarding, And It’s Just for Research

In exchange for all their juicy details, Placed gives its app users points that can be converted into cash, gift cards, or a charitable donation via the Give to Charity app. Though there is a “Big Brother” aspect to Placed’s app — technology that silently gleans information about a person as they wend their day through home, work, and shopping — Shim says there’s no reason for users to be concerned about any privacy violations, nor are users in a position of being ad-targeted by Placed.

“We’re upfront,” Shim says. “At the end of the day, it’s called a panel app, and when you go through the process of installing the app, we let you know that we’re measuring location data and we need permission to run it in the background. We’re letting you know it’s for market research.”

Another point of comfort to users is that all the information Placed collects is anonymous market research. There’s no product being angled for a sell, no ads being crafted by Placed based on a user’s profile.

“We never target an individual on our panel with an ad,” Shim says. “Rather, we use we use that [data] to create a model so we can target people anonymously based on certain behaviors.”

This is where things can seem complicated. Placed, as Shim says, has “no skin in the game in trying to make a campaign work,” in that it does not directly sell media — it just provides the data on mobile users who have downloaded its app and activated their location services on their smartphone.

That said, the company faces tremendous competition from other analytics providers, such as Nielsen and comScore – entities that focus on packaging their audience metrics around online and offline commerce. So, the challenge for Placed is: how, with its opt-in location-sharing and panel-based market research, does it remain relevant against a sea of competition?

Power in Partnerships

Placed has an edge over other data providers because of it’s hyper focus on geo-location, and its embrace of the smartphone as the ultimate geo-targeting device.

A recent report by BIA Kelsey predicts that in 2017, more ad dollars will be spent on ads with geo-location than on ads without, and Shim says after a period of testing, ad networks and ad agencies are ready to take the concept seriously.

Currently, Placed has partnerships with Location Scale, Millennial Media, xAd, and Verve, among other publishers, all of whom benefit from data offered by an independent firm.

“There’s an inherent conflict of interest in providing data to back up your media sales focus, so [advertisers] need a third party data provider like us,” Shim says, adding that publishers using Placed data possess “a common currency” that allows for “an apples to apples comparison, as opposed to comparing a variety of metrics that don’t match up to one another.”

Currently Placed has partnerships with a number of publishers including Location Scale, Millennial Media, xAd, and Verve Wireless, among others.

A Leader in the Space

Location-focused ad targeting firm xAd, started working with Placed in late 2012, around the time Placed introduced its analytic product, notes Monica Ho, xAd’s VP of marketing. In fact, Ho points out, xAd was Placed’s exclusive rollout partner for its mobile attribution product, which she says xAd helped to develop.

xAd has come to embrace more of Placed’s technology along the way, and uses their services in several ways.

“[Placed] has a very unique data set as they measure real-world behaviors that we then use to supplement some of our targeting solutions,” Ho says. “For instance, we can use their audience insights product to see [which] markets brands have higher store visitations then others. We can also look at things like brand affinities for specific demographic sets.”

Ho says that xAd also uses Placed’s attribution solution to “measure mobile ad effectiveness by showing the actual lift in in-store visits our that resulted from our campaigns.”

As far as xAd is concerned, it would seem that Placed has no competition. “[Theirs] is the only solution in market today for real-world visitation insights which they make available in an easy to use platform,” Ho says, adding that the xAd doesn’t have “a better partnership in market today. The [Placed] staff is actually an extension of our marketing and data insights team.”

Shim is confident that 2014 will see Placed greatly growing its relationships. “We expect to have a significant portion of the top 25 mobile ad networks and publishers using Placed by the middle of this year,” he says.

2017 may be the year BIA Kelsey’s report has pegged for the domination of geo-location technology, but Shim suspects it could be sooner, particularly when you consider the ubiquity of smartphones and tablets.

“The mobile device is so personal and such a constant presence in everyone’s daily life as they consume in the physical world,” Shim says. It’s the best medium for changing a person’s behavior in real-time, and location-based targeting is key to that.”