Dunkin’ or Starbucks? Placed Tracks Consumer Moves to Find Out

10/18/12Follow @curtwoodward

If you’ve been to the Northeast, you’ve seen it firsthand. For some unexplainable reason, people go absolutely bonkers for Dunkin’ Donuts coffee. And thanks to mobile-marketing startup Placed, we can see just how rabid those customers are.

When the Seattle-based startup tracked the movements of consumers in several cities around the country, it found that Dunkin’ beat out even the mighty Starbucks when the two were placed head-to-head.

“When there was a Dunkin’ Donuts and a Starbucks in the same market, Dunkin’ Donuts outranked them 75 percent of the time,” Placed CEO David Shim says.

That’s enough to hurt the heart of any good Seattle coffee snob. But it’s a pretty interesting glimpse into the regional preferences that consumers have, and a window into the kind of data Placed is going after with its new consumer-tracking service.

The new feature, which the startup calls Placed Panels, allows marketers to recruit groups of consumers to act as a focus group. When they agree to participate in the experiment, they give the business behind the test the ability to follow them around for a while by virtue of the location-tracking capabilities in their smartphones.

The panel concept itself isn’t a new idea—it’s been used for many years in marketing, including in efforts like the Nielsen home TV ratings system, which places boxes in consumers’ homes to track their viewing habits.

But bringing that dynamic to the always-on, powerful computers in people’s pockets is an interesting step. It comes as companies of all sizes are rushing to figure out the best ways to make use of the fact that you can see where consumers are going, among other troves of data thrown off by smartphones.

Location is among the more valuable bits of information being gleaned via smartphones for a couple of reasons. First, it’s new—marketers have never been able to watch where people go and discern interesting patterns from those movements at the same scale. And knowing a target consumer’s habits is important because it increases the likelihood that an advertisement or discount will find someone at exactly the right time, as opposed to the relative carpet-bombing of decades past.

The hunger for that valuable information is balanced, of course, by the creepiness factor. Complaints from members of Congress and others over how much data app developers were accumulating about users prompted Apple to change the way it provides individual iPhone identity information to app developers earlier this year.

Placed’s panel system gets past that concern by being an opt-in system. And Shim says the startup’s experiment with about 36,000 participants made it pretty clear: People will let you follow them around, provided the payoff is good enough (those incentives are provided by the company doing the marketing—a gift card if you stay with the panel for a month, for instance).

“We tried sweepstakes, we tried gift cards, we tried larger gift card amounts, we tried cash,” Shim says. “The better the incentive, the more likely they are to stick around.”

The Placed system also keeps consumer data aggregated to some degree. That means a marketer who creates a mobile focus group can find out where all of the women under 35 went during the day, for instance, but they can’t see what one specific person did.

That’s enough to see the kinds of patterns that demographic chunks of consumers lay down as they crisscross the streets during their day, and also discern some interesting regional differences.

“If you look at the data for Dallas and Houston, you see that Whatburger makes the top 10,” Shim says. “I’ve never heard of Whataburger before. but I was just in Austin and asked them, `Hey, is Whataburger good?’”

He already knew the answer, of course. “They said, `Oh, yeah.’”

Placed is backed by investors including Madrona Venture Group, which led the startup’s $3.4 million Series A investment round announced in March. Shim, the company’s founder, has a background at notable marketing and data companies, including Quantcast, Farecast, and Avenue A/Razorfish.

The company has about 15 employees, mostly engineers and scientists at the moment, but it also is building its sales and marketing team.

Both the new Panels offering and Placed’s original in-app and mobile Web location analytics services are free to use. The startup plans to make money by eventually charging for deeper insights into the data.

“The goal here is that people will start to ask as they have access to the data, and we’ll introduce premium reporting,” Shim says.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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