Snap Acquisition Underscores Importance of Location Intelligence

To measure the success of online ad campaigns to steer consumers into brick-and-mortar stores, Snap Inc.—maker of the popular Snapchat app—has acquired the marketing insight company Placed for a rumored $200 million.

In its reporting on the acquisition, the Los Angeles Times noted the importance in today’s business world of connecting the digital to the physical:

Snap was founded in 2011 and went public earlier this year. Placed was also founded in 2011 and was privately held before the acquisition.

Location Tracking Bridges Digital and Physical Realms

Snapchat is now the most popular social media app among American teens and young adults¹, with more than 166 million daily active users². Businesses in many industries are eager to better understand how this coveted demographic responds to advertising. The Placed acquisition gives Snap a better tool to do just that, according to the Times article:

The fact that Placed is reportedly Snap’s biggest acquisition to date underscores the importance of understanding how location intelligence affects digital marketing, which in turn shapes buyer behavior—a growing need as businesses dedicate more of their marketing budgets to online advertising.

In addition to having launched its own measurement feature prior to the acquisition, Snapchat has experimented with in-app location techniques. Its geofilters are an example. Snapchat users can augment their snaps with graphic overlays that reveal their location, whether it’s a city the user is visiting, a local bar, or a retail store. Those snaps can be searched by location until they expire.

Closing the Loop for Marketing

Jim Young, an account manager at geographic information system (GIS) technology pioneer Esri, sees value in allowing brands to measure their media buys against human movement in the real world.

“Traditionally, we’ve looked at human behavior in freeze-frame,” Young says. “Companies receive a yearly snapshot of demographic information, spending trends, and market potential. While that’s still useful to many companies, it’s now possible to see consumers’ movements and behavior in real time and understand how marketing has affected those movements. That kind of closed-loop intelligence creates great value for marketing executives and their companies.”

With this insight, businesses can create more effective marketing campaigns that bridge the digital realm and the real world. Snap’s Placed acquisition is a reminder that despite our growing embrace of digital communications, physical location remains a key determinant of business success.

References

1. Statista, “Reach of leading social media and networking sites used by teenagers and young adults in the United States as of February 2017,” https://www.statista.com/statistics/199242/social-media-and-networking-sites-used-by-us-teenagers/
2. Tech Crunch, “Snapchat hits a disappointing 166M daily users, growing only slightly faster,” https://techcrunch.com/2017/05/10/snapchat-user-count/