Snapchat’s growth is not as desired by the C-level executives of the company. If it remains slow, it needs to maximize how much it can charge on each of the ad that it places by inspiring purchases and physical foot print in stores. As part of the effort, on Tuesday June 6, 2017 Snap, the parent company of Snapchat acquired the location based analytics and ad measurement startup Placed. The sum of the acquisition is still kept undisclosed.
According to the details that was received by our resource at Branex, with the acquisition, Snap is looking forward to Placed in helping them scale its measurement systems like “Snap To Store”, so that advertisers could measure online snapchat ads into offline return on investment. The news was broken by Geekwire.
The six year old venture had raised approx. $13.4 Million, that includes a $10 Million Series led by Two Sigma Ventures in 2014 It had measured more than %500 Million in ad spend for multiple partner platforms including PayPal and Pandora. By boosting advertisers confidence in ROI could help Snap grow its revenue, which fell short of its expectations in its first quarter and its share price decreased by more than 20 percent.
Snap also said that Placed will keep its workforce that is about 100 people and will continue to run in its headquarters in Seattle NYC and Los Angeles. The Placed CEO David Shim will report to the Chief Strategy Officer at Snap, Imran Khan. Snap will also put in place, strict privacy, data security and sharing rules to ensure a digital separation between Snapchat and Placed data.
In the words of Placed CEO, Mr. Shim, “Placed’s goal continues to be the adoption of a common yardstick that can measure the offline effectiveness of advertising across multiple platforms and publishers.”
In order to do this, placed has built an audience from whom it can directly ask about their location and store visits. It combines the responses with a third party data to determine what percentage of the sample size were actually inspired to visit the business, physically. It can then extrapolate to inform about the estimated numbers of the return of investment and the brand lift that is caused by the ad-campaign.
This knits superbly with Snapchat’s Snap-to-store system. When a user visits any store, say McDonalds and applies their snapchat-sponsored geo-filter to any of the posts he make, and if any of their friends who have subsequently viwed the snap have made it to the store or not? Placed will give Snap a wider measurement audience and deeper data so it can more accurately assess the impact of these geofilter ads.
Snap is deftly using acquisitions like Placed and Flite to close the advertising gap between its tools and those offered by the duopoly of Google and Facebook. Squeezing out as much average revenue per user will be critical as it’s unlikely to achieve their audience scale, especially as Facebook relentlessly copies its products. If Snapchat can leverage creative and interactive ad units, its tastemaker teen audience and strong ad measurement, it might be able to develop a relatively big business relative to its user base.