Seattle’s Placed Raises $10M to Measure Mobile Ad Effectiveness
If you’re a retailer trying to drive consumers into your stores with mobile ads, the number of clicks your ad gets doesn’t matter. What matters is how many people come into your stores after seeing the ads.
Seattle startup Placed is raising $10 million to continue its bid to measure the real-world effects of mobile advertising, and to make its technology a standard way for content publishers, advertising agencies, ad networks, and their customers to view the effectiveness of advertising campaigns.
The company’s Series B funding round announced today is being led by Two Sigma Ventures with participation from existing investor Madrona Venture Group. Placed, founded in 2011, previously raised $3.4 million.
These days, mobile ad campaigns are commonly measured by click-through rates, app downloads, and even mobile purchases made after viewing the campaign.
“Those are the key success metrics today,” said Placed founder and CEO David Shim. “We’re actually bridging that and saying it’s more than what happens just on the phone, it’s about how that advertisement actually changes behavior in the physical world.”
To measure that change, Placed assembled a panel of 175,000 people who download the company’s app to their smartphones and agree to be tracked wherever they go—generating up to a thousand latitude and longitude readings per panelist each day—in exchange for payments and premiums. The panelists also share demographic data. “It’s like Nielsen for the physical world,” Shim said, referring to the television ratings provider.
With the panel, Placed can tell companies which of their competitors’ stores their customers frequent and when. But the bigger opportunity is in mobile ad campaigns:
Say McDonald’s is running a mobile campaign on Pandora, one of more than 15 major publishers and ad networks Placed works with. Using Placed, Pandora could tell McDonald’s how many people went into one of its restaurants after encountering a McDonald’s ad. With such a large panel, it can also look at how many people who did not see the ad went to McDonald’s anyway. “So all of a sudden, now we’ve got a test and control group,” Shim said. That allows publishers like Pandora to tell their large advertiser customers what kind of “lift” they received as a result of marketing on their network.
Placed, which is not an advertiser or publisher itself, offers an independent view of an ad campaign’s performance as mobile advertising continues to grow. Mobile ad revenue increased 47 percent in 2013 to reach almost $13 billion, or about 11 percent of total Internet advertising.
“We’re trying for that to be the key metric moving forward because clicks really don’t matter at the end of the day when your goal is to drive somebody into the store,” Shim said.
In the last few months, the company has landed partnerships with Pandora, The Weather Channel, Rocket Fuel and seven others. Shim says this is helping the company’s attribution measurements become a standard currency in mobile advertising because they can be used across various publishers to compare an ad campaign’s success.
“Advertisers, agencies don’t want 15 different solutions to measure the effectiveness of mobile advertising to try to get people in the store,” he said.
Placed gets paid for its attribution service based on the campaigns that its customers measure.
The funding will be used to continue growing this part of Placed’s business in particular. The company, with more than 20 employees, also plans additional hiring and an office in New York City to be opened later this summer.