Mobile check-ins have a problem: they require an action by the user. But what if a mobile app checked shoppers into locations automatically in exchange for deals or coupons?
That's the premise behind mobile app company Placed, which captures data on the physical locations of people hundreds of times each day, using that information to help brands understand their own consumers and how they interact with the competition.
Unlike some technologies that track people by surreptitiously gathering device IDs, Placed is relatively forthcoming in its explanation to users that it collects and stores their location data in exchange for gift cards and other prizes.
In tracking its 70,000 panelists, Placed found that almost half of Americans age 14 and over visited a McDonald's in March -- the highest ranking business visited. The company also determined that Popeye's Chicken & Biscuits dropped 10 spots in March, and suggested the end of football season led to the decrease in people picking up fried chicken for the game.
The company now is making this type of data available to brands using its platform.
Placed's Panel App description highlights the prizes and sweepstakes entries it gives people in exchange for downloading it. However, when completing the sign-up process, users are notified prominently that "the Panel App collects and stores your location data."
Indeed, the app keeps track of hundreds of precise locations visited by users in its panel -- totaling around 1,000 locations each day. They swap this access to their movements for the chance to win $5 and $10 Amazon and Paypal gift cards, or free movie rentals from Redbox.
"We actually see the person driving to the Walmart, going into the store...and leaving," said David Shim, Placed's founder and CEO.
A total of around 500,000 people have downloaded the opt-in app since it launched in July 2012, according to Mr. Shim. The firm has more than 1,000 businesses in its database, representing millions of locations. The company lets clients access the offline behavior and demographic data it tracks in aggregate, and doesn't provide clients information on an individual-level.
Though the data provided by Placed to clients could be used to inform ad targeting, the company does not plan to enable ad targeting in the app. It currently doesn't offer its data to third parties for ad targeting purposes.
A handful of technologies track people through their WiFi signals, but do not require them to opt-in and don't always notify them of the tracking. For instance, startup Nomi gathers mobile-device IDs as people enter merchant locations, including New York's Baked By Mellissa, through the shop's WiFi network or via small sensors that track mobile device radio signals. When Ad Age spoke with Nomi in February the company said it provided no notification on consumers' phones that the tracking was occurring.
Marathon gas stations in Indiana and Ohio use iSign's WiFi and Bluetooth tracking technology to target discounts of 10 cents off a gallon of gas to people as they approach its stations. The system gathers their device IDs but consumers are not notified of the tracking or data collection.
Rather than simply relying on cellphone triangulation, which could peg a consumer as in the vicinity of an array of businesses, Placed combines GPS tracking with WiFi and cellphone triangulation when possible, in the hopes of more accurately pinpointing someone's location. GPS tracking can put someone within a few meters of a location, but it requires a clear view from the sky. And, simply marking location using latitude and longitude, someone could be measured as having visited a store location when he's really waiting at a bus stop nearby, said Mr. Shim.
The company allows clients to invite its customers to join the panel, and offers loyalty gifts like discounts in exchange. "You start to get visibility in terms of where do my customers actually shop in the real world," said Mr. Shim. Clients can customize panel segments, labeling customers as people who have purchased online or who come into a certain location once each week, for instance.
A possible conclusion: A store's best customers might be three times more likely to go to JC Penney or Subway than the rest of the population. "You can start to calculate things like an affinity," Mr. Shim said.
One Placed client, a higher-end retailer, used the data to determine why millennial women visited its stores but didn't buy much. It turned out they were checking out styles there, but then moving on to stores with lower prices such as Old Navy, Payless, Gap, Hot Topic and Forever 21. "They actually went to the lower cost retailers," said Mr. Shim. "It almost had this showrooming kind of effect."
Through an affiliate program that started two months ago, the company now adds people to the panel who have installed other apps that require location permissions, and those panelists are asked to opt-in to the panel when they open those affiliate apps.
Seattle-based Placed has 15 people on staff, and received $3.4 million in funding in 2012, led by Madrona Venture Group, which is headed by former aQuantive and Microsoft exec Brian McAndrews.