Brief:
- Foursquare has agreed to buy the location-tracking firm Placed from Snap, Snapchat's parent company, according to an announcement. The deal could help Foursquare, a social check-in app that has shifted focus to become a location data provider, strengthen its business of helping mobile marketers track foot traffic to retail locations.
- Foursquare plans to merge Placed, which specializes in measuring ad performance by tracking consumers' movements, with its ad effectiveness measurement product and rebrand it as "Placed powered by Foursquare." Both companies match lists of people who see an ad to a panel of users who have opted-in to share their locations with an app.
- While the companies didn't disclose the deal's financial details, Foursquare at the same time announced a $150 million investment led by merchant bank The Raine Group. The company plans to use part of the funds for research, development and expansion of its mobile location platform.
Insight:
Foursquare's planned acquisition of Placed makes a good match for the companies, as advertisers increasingly rely on mobile location data to track the effectiveness of their marketing campaigns. That includes offline attribution of digital ads and the performance of campaigns in traditional media channels like TV and print.
Foursquare and Placed's combined clientele consists of more than 1,000 brands, per the corporate announcement. Companies including Uber, Twitter, Samsung, Apple, AccuWeather, TripAdvisor, Hilton, Tencent and 150,000 other registered apps use Foursquare's software to gather location data of its users and inform its marketing strategy. About 30% to 40% of app users opt-in to always-on location sharing, becoming part of Foursquare's panel of about 25 million monthly active users who help it track store visits.
The Placed acquisition is another sign that Foursquare, which has yet to make a profit, is building out its location data business since shifting its strategy away from social media. The company started in 2009 to give mobile users a way to share their physical locations with friends by "checking into" restaurants, bars and other gathering spots. Its growth leveled off and the company changed strategy to marketing location data.
Snap two years ago acquired Placed for $135 million. Now, the combination of Foursquare and Placed strengthens both companies after Snap had operated Placed as a separate entity to maintain its impartiality in marketing its services. Snap's investment helped to incubate Placed and build out its platform, Placed founder and CEO David Shim, who is joining Foursquare as president, told AdExchanger.
Location data-sharing has entered the spotlight as consumer privacy becomes a more prominent political issue worldwide. Foursquare and Placed don't operate their advertising businesses in the European Union, where the General Data Protection Regulation (GDPR) obliges companies to name their data-sharing partners. California passed similar data-privacy legislation to go into effect next year and federal lawmakers are now debating a national privacy law, which marketers and ad-tech firms are intensely pushing for to avoid a patchwork of state-level bills. Foursquare has worked to make its data-sharing practices compliant with the GDPR and supports similar privacy legislation in the U.S., it claims.
