- Foursquare’s acquisition of Snap’s Places reflects the latest round of consolidation of ad-tech firms as marketers demand scale to justify putting money in the space.
- Foursquare CEO Jeff Glueck said the company might buy other location companies and floated the idea of going public.
- He said Foursquare addresses privacy concerns because users agree to share data about themselves.
- For its part, Snap says it is working on its own mapping technology and self-serve ad platform.
- Visit Business Insider’s homepage for more stories.
A lot of ad-tech companies sell location data to marketers, and Foursquare wants to become the biggest.
The location-based firm on May 31 announced plans to acquire rival firm Placed from Snap. Placed and Foursquare collect first-party data from 30 million consumers to help advertisers understand how seeing an online ad leads people to shop offline. Foursquare and Placed claim that more than 1,000 advertisers use their location tech to run and measure campaigns.
Foursquare also provides targeting and measurement tools for advertisers and publishers and powers location tools for developers in 150,000 apps including Twitter, Uber, and Accuweather.
Read more: How confusing tech, GDPR, and a shifting consumer climate killed the once huge promise of location-based ads
Marketers have long been interested in targeting ads to consumers based on their location. Challenges around privacy, regulation and complex methods of targeting have caused ad-tech companies to lose steam in recent years, though. Regulation like Europe’s GDPR and the forthcoming California Consumer Privacy Act makes it harder for advertisers to use location data collected from mobile phones for ad targeting.
Foursquare CEO Jeff Glueck said in an interview that Placed and Foursquare address those concerns because people are voluntarily sharing their data, which makes the companies an anomaly outside of advertising’s big walled gardens.
Foursquare hints at more acquisitions
He also said that advertisers want to be able to mix first-party and third-party data, and that in addition to first-party data, Foursquare and Placed have third-party data that they use to confirm location accuracy.
Glueck said Foursquare is open to other acquisitions and hinted that the company could go public.
“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,” he said.
Glueck said he approached Snap in January about buying Placed. Foursquare has worked with Snap for several years to power some of its features like geofilters. Snap purchased Placed for $135 million in 2017.
“I think it was very important to Snap to see Placed grow even faster, and they recognized that they could grow even faster inside a location-focused independent company where they can be agnostic of any big media companies,” Glueck said.
Terms of the deal were not disclosed, but it is backed by a new $150 million investment from The Raine Group. The 10-year-old company has raised more than $390 million, according to Crunchbase. In addition to paying for Placed, Foursquare will use the funding for research and development and expansion.
Foursquare and Placed made more than $100 million in combined revenue last year, according to Foursquare. As part of the acquisition, Placed’s team will join Foursquare and its founder David Shim will become president of Foursquare.
“It just makes sense to create a very clear, undisputed leader in the location space,” he said. “It changes the dynamics of the industry a lot.”
Some marketers are baffled by Snap’s decision to sell Placed
Placed helped Snap’s marketers measure foot traffic from their campaigns, and some agencies were caught off guard by Snap’s decision to sell the firm.
Dan Elddine, head of data strategy for North America at Essence, said marketers thought Placed would get a boost in first-party data from Snap’s users, but that it didn’t happen.
“When you make a big move like this and then two years later you sell it off, what happened there?” said Philip Tesoriero, director of planning for Carat US and co-chair of Carat’s Mobile Council. “I would love to know.”
Benoit Grouchko, CEO of location firm Teemo, said that there was a conflict between Snap selling ads and then measuring their performance.
“It shone light on the fact that companies like Snap — or any other digital advertising platform — can’t both sell advertising and provide a measurement solution,” he said. “Either you do measurement or you run advertising, but you can’t do both.”
In a statement, Snap said Placed would be Snap’s preferred attribution partner. Snap said it didn’t have its self-serve advertising platform when it acquired Placed, but that it has since focused on first-party offerings like its Maps product and its acquisition of social map Zenly versus the third-party data that Placed provides.
“We are big fans of Foursquare and Placed,” said Jeremi Gorman, chief business officer at Snap. “Together, they’re a powerhouse in location technology and measurement, and we are excited to see how they invent the future of location. We look forward to continuing to work with them in many capacities, including measurement and location data, as we focus on building on the growing momentum in our advertising business.”
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