Snapchat’s parent company, Snap, has acquired location analytics firm Placed, a company spokesperson said on Monday, confirming a GeekWire report published earlier in the day.
The spokesperson declined to say how much money Snap paid for Placed — Bloomberg reported the price to be $125 million — but it’s straightforward to see how buying Placed — which measures store visits and offline revenue generated by digital, TV and out-of-home ads — could pay off for Snap.
Advertisers like Procter & Gamble and Unilever are pressuring digital ad sellers like Google, Facebook and Snapchat to prove that the money brands spend on ads results in people spending money on the brands’ products. As a result Google, Facebook and Snapchat have stepped up their measurement capabilities, especially when it comes to measuring if a digital ad led to a real-world purchase.
In April Snapchat began rolling out its own online-to-offline measurement product called Snap to Store. Through the product, Snapchat is able to recognize when a person is using the app in a marketer-specific location, like a store, restaurant or movie theater, and then check if that person had previously been served any ads from that brand on Snapchat.
Buying Placed appears to reinforce what Snapchat is already doing with a team and technology that have been offering this type of ad attribution since 2011. According to Placed’s own description of its methodology, the company’s attribution measurements works similarly to Snapchat’s approach without being limited to Snapchat’s ads.
Placed has its own audience of people who opt in to share their location with Placed plus a third-party audience. By continuously tracking people’s location and cross-referencing that information with its database of businesses’ locations, operating hours and other information, the company estimates where a person is likely to be and then — through deals with ad buyers like DigitasLBi, Essence Digital, Horizon Media and IPG Mediabrands and ad sellers like Conde Nast, Hearst, Pandora and The Weather Company — checks if that person had seen a digital ad, TV commercial or billboard for the business operating that location. After doing that for enough people and comparing visitors who did see an ad with those who did not, Placed calculates the extent to which seeing an ad increased a person’s likelihood to visit and then factors in a location’s sales to calculate the extent to which those ad exposures increased the location’s revenue.
“Over the past 12 months, Placed has measured more than $500 million in media spend to store visits, across thousands of campaigns and hundreds of partners,” Placed CEO David Shim said in a blog post published on Monday announcing the deal.
Placed will continue to operate as a separate company with all of its 100-plus employees offered the opportunity to stay on post-acquisition, and Shim will report to Snap’s chief strategy officer, Imran Khan, according to the Snap spokesperson. As a result, advertisers will still be able to use Placed to measure the store visits and offline revenue stemming from their ads running on and off Snapchat.
That could concern some advertisers and publishers alike who may not want Snapchat’s sales team to be able to use that data to price their pitches and poach their clients. But, at least for now, Snap will physically and technically keep Snapchat’s and Placed’s advertiser data separate, the spokesperson said.