Bundling for Better Results: Why Snapchat Acquired Placed
I have always jokingly complained that digital marketing is held to exceedingly high-performance expectations compared to other channels.
“Go ahead… try and force people not to change the radio station!” I joked during the Viewability Rush of 2015.
But that curse is also a blessing.
Those same standards are what push our industry to innovate and find new ways to deliver value to marketers. Yes, mobile adoption and usage continue to soar. But growing audiences are only one reason the majority of advertising spend continues to shift away from traditional channels and onto mobile platforms.
The ability to reach highly targeted audiences and tie campaigns back to business results through the use of technology is where our industry truly shines.
In that way, it’s not surprising that announcements from major players like Google over the past few weeks continue to drive mobile’s accountability further down the sales funnel – away from awareness metrics (like impressions and clicks) and toward engagement and transaction metrics (like physical store visits, purchases, customer advocacy, and more).
The feedback loop of message-to-action that technology enables is what allows companies in our space to prove mobile spend is working.
Snapchat’s Bet on Potential
It would be easy to assume that Snap, Inc’s acquisition of Placed was for these very reasons. Yet the reality is advertisers could have contracted Placed to measure the effectiveness of Snap’s campaigns before last week.
As David Kaplan at GeoMarketing pointed out, “given its use of other location tech providers, there are reasons to wonder why Snap chose to buy Placed, as opposed to simply contract with it as a partner.”
While Placed’s acquisition amount of $125-200 million may not be an astronomical valuation (especially when compared to Oracle’s acquisition of Moat last month for a suspected $800 million), we need to remember that Snapchat didn’t buy Placed for its data or its revenue.
It bought Placed for access to its client base and the potential, untapped revenue Snapchat can unlock from groups now that even more is bundled together.
Down with The Walled Gardens! Long Live the Walled Gardens!
Snapchat’s offering continues to expand. Advertisers can now buy branded geo-filters, ads, behavioral targeting, and location analysis (utilizing their home-grown Snap to Store or “external” Placed solution) from a single vendor. That offering is, at least for now, differentiated enough from Facebook’s to garner incremental interest from large advertisers.
But will bundling work? Does everything really work better together?
In my perspective, it does.
Technology is built on a foundation of connection – disparate parts working together seamlessly – that make the whole greater than the sum of its parts. The more cohesive and seamless the offering, the less friction there is to buy. And the easier it is to prove efficacy.
It’s why we originally built an entire mobile ad platform from scratch – to improve latency and make features like predictive analytics possible. And it’s the same reason we bought Gimbal’s location and proximity technology – to seamlessly integrate martech and adtech technologies that finally allow buyers to close the loop on their spend.
Last week’s announcement of Arrival, our dwell-based location attribution product, was the first of many steps towards that reality.
Simplicity or Results? Why Not Both?
Marketers don’t really want the raw goods; they want an end solution, the final product. Most importantly, they want to know that the money they spend isn’t being wasted. And in a way, it’s hard to blame them.
At the end of the day, it comes down to results. Yes, best-in-breed, third-party solutions will always play a role. But once an acceptable amount of trust has been established by a single player, they will continue to absorb large budgets – especially if their flywheels can prove their own effectiveness.
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