Lessons From Foursquare’s Acquisition and Integration of Placed
November 6, 2019 | Contributed by: Mike Boland
Those involved in tech mergers know how long it can take to integrate two different systems and sets of technologies. This is why it was particularly notable when Foursquare revealed last week that it has completed primary aspects of its back-end integration of Placed. This comes only 90 after the acquisition.
To be clear, we’re talking about the integration of each company’s respective first-party audience data. They now come together as a single attribution product. This was one of the primary goals of the merger, as the systems were complimentary and location data is all about gaining reach and scale (more on that in a bit).
One thing that makes this integration timeline even more pronounced is the contrast to Placed’s previous acquisition by Snap. Placed’s location marketing/attribution engine was never fully integrated into Snap’s advertising stack. This was due to shifting prioritization, as well as some inherent structural factors.
As Foursquare president (and former Placed CEO) David Shim explains to Ad Exchanger, this was due mostly to the separation of church and state at Snap. In other words, there’s more integrity in any system where selling ads/media is physically separated from the attribution data that evaluates its effectiveness.
“With Snapchat, things were kept at arm’s length to maintain a separation between church and state, between media and attribution,” Shim told AdExchanger’s Allison Schiff.
But that’s not the case at Foursquare which is a testament to the diligence and strategic elements of the acquisition itself. Not only does Foursquare not sell media, but the technologies plug into each other well, as discussed on a recent episode of Street Fight’s podcast (disclosure: I produce and host that podcast).
Back to the point about scale and reach, Foursquare’s Placed acquisition was partly about strength in numbers. More accurately, it’s about quantity and quality. In other words greater network reach (in addition to quality data gathering methods) means greater sample sizes for aggregate location tracking.
That now totals 13 million mobile devices. Placed and Foursquare’s attribution methodologies were also similar in that they’re deriving location movement data from persistent opted-in data from apps. This happens when app developers integrate their SDKs to power location features (and then share data back).
The incentive for app developers to integrate those SDKs varies. Foursquare’s SDK, for example, can boost a given app’s experience, such as location tags for tweets. Placed’s SDK meanwhile incentivized users to share location in exchange for rewards. The differing incentives result in non-overlapping networks.
In addition to more robust data sets, the now-larger network also gives advertisers more confidence in the size of Foursquare’s network of app partners. And it notably works against a common pain point for brand advertisers: the media buying landscape is so fragmented, meaning more work for media buyers.
“Foursquare had this thesis around consolidation in the space and really delivering a full location stack where people can come to a single company and have the best solution,” Shim previously told me. “What you had to deal with in the market was 12 different vendors for each silo… Foursquare had a good attribution solution but just not as much market share.”
The strength in numbers benefit is also characterized in what Foursquare CEO Jeff Glueck calls the “100 club.” That refers to more than $100 million in revenue, 100 million measurable mobile devices, $150 million in funding, 100 engineers working on location, and POI data for more than 100 million locations.
As for where it plans to go next with all of this, Foursquare will continue to launch products based on the newfound combined strengths brought by Placed. An example of that so far is its next-day offline reporting. This provides real-time feedback on ad attribution for mid-flight campaign optimization.
That comes full circle to the integration of Placed’s attribution engine. Though that phase is complete, no company integration is ever fully done. Foursquare hit a key milestone in integrating attribution systems, but more back-end and product development will surely come as the combined assets evolve together.