Placed, the startup with the app that tracks the businesses consumers visit, has raised a $10 million series B round of venture capital from Two Sigma Ventures, with participation from previous investor Madrona Venture Group. The company has now raised $13.4 million since launching in 2011.
Placed offers a variety of products for analyzing businesses, attributing advertising to store visits and targeting consumers likely to visit a particular type of business. It’s all based on the company’s underlying technology, which uses a collection of algorithms to accurately assess what business a mobile phone is at or near throughout the day. It currently has 175,000 active users — people who willingly installed the app and provide feedback about its accuracy — and tracks more than 175 million locations a day.
That type of express user validation can be key for developing more accurate algorithms, for Placed as well as for companies like Amazon and Netflix. The more sure Placed is that a particular set of coordinates or movement patterns is likely to be a particular business, the more accurate the results it delivers to its paying customers.
It’s easy to see why Placed is popular among advertisers and marketers trying to understand their shoppers, because it gives them unfiltered access into consumer behavior. Rather than taking surveys and relying on consumers’ memories and egos, Placed can know that people who shop at Whole Foods are also significantly more likely to visit California Pizza Kitchen and Anthropologie, or that people leave high-end fashion stores and immediately head over to discount stores.
Placed is able to generate even more information by asking its users survey questions to complement the location data, or by partnering with other market research firms such as Kantar.
There’s an inherent concern about privacy with apps like this, but Placed has always been pretty private to begin with by only reporting aggregate behavior and not sharing user details with businesses. And Placed, like others, has figured out consumers can actually be fairly willing to share their location or other data in exchange for something. Placed offers points for validating locations and other activities, which can then be redeemed at various places. Some stores specifically target their own loyalty card holders or other known customers with gift cards in exchange for limited-purpose location-tracking.
Placed Founder and CEO David Shim understands the tradeoff and, in response to a question (via email) about increased payments for data, suggested companies like his might soon need to offer better incentives, or at least do a better job explaining what consumers get out of sharing their data.
“Having a clear value exchange between consumer and corporation will be a requirement in the future,” he said, “as operating systems start to surface data collection practices, and enable consumers to opt-out at the OS level.”