Marketers see Foursquare's acquisition of Snap's Placed as a game-changer for location-based advertising but question how it'll all work
- Foursquare said that it plans to acquire Placed from Snap as it seeks to build a location company giant.
- The two companies plan to incorporate some of their features like measurement tools.
- Marketers hope the acquisition will bring some needed consolidation to location-based advertising but question aspects, such as whether Placed will be independent under Foursquare.
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Backed by a fresh $150 million in funding from The Raine Group, Foursquare wants to dominate location-based advertising that marketers use to target and measure campaigns.
On May 31, Foursquare announced that it is acquiring measurement firm Placed from Snap and will combine some of their products for marketers, including tools that measure ad exposure with foot traffic. For example, Placed's attribution product will become Foursquare's flagship measurement tool and will expand to include the 100 million devices in the US that Foursquare reaches through all the apps it powers.
"Clients and investors want to see a clear leader and eventually an independent location-tech, public company that can be an alternative in so many areas - not just in marketing and advertising, but in health and real estate and augmented reality and autonomous vehicles," said Foursquare CEO Jeff Glueck.
Advertisers welcome a bigger location company
Tech firms specializing in location help marketers target ads and see which stores people visited after seeing an ad, but their explosion in recent years has created confusion, agencies say. But location firms use different measurement methods, which makes it complicated to use them, said Barry Lowenthal, CEO of The Media Kitchen.
A retailer or a fast-food restaurant might work with several location companies for a single campaign, said Philip Tesoriero, director of planning for Carat US and co-chair of Carat's Mobile Council. Carat's parent agency Dentsu Aegis Network works with up to a dozen, he said.
"The location targeting and measurement space is immensely crowded," said Jay Friedman, president of programmatic advertising agency Goodway Group. "Combining two different providers helps Foursquare establish a stronger position."
Deal raises questions about Placed's independence
Dan Elddine, head of data strategy for North America at Essence, said Foursquare's focus on first-party data with the acquisition could alleviate advertisers' privacy concerns.
"There's this whole nebulous side of background data collected in long-tail apps," he said. "This shines more light on where that data comes from and how users opt into that process."
But while Foursquare and Placed collectively reach a big audience, Carat's Tesoriero said he wants to understand how the two companies' products and audiences overlap. According to Foursquare, the two companies' opt-in panel of 30 million consumers does not overlap.
Similar to the challenges under Snap's ownership, Tesoriero also said it's not clear how Placed will remain independent if it ends up measuring the same ads that Foursquare sells.
"When it comes to foot-traffic attribution, we don't like to have the measurement partner also run media and grade their own homework," he said.