Location Tech Inspires Investors To Write Checks

investorslocationInvestors are bullish on location.

“We think there is a lot of promise in location,” said Anders Richardson, managing director of Palisades Growth and an xAd board member, speaking at an xAd event in New York City on Thursday. “It’s amazing to me what it allows marketers to do.”

In other words, providing a conduit for insights and attribution.

“Location is one of the components that helps build identity – knowing where you are can be a cue as to who you are – and it’s going to be critical going forward in this holistic world,” said Terence Kawaja, founder and CEO of LUMA Partners. “Location is one of the stronger intent signals.”

The number of searches for the words “near me,” most of which happen on mobile, has increased 34 times since 2011, according to Google. A search for “restaurants near me” or “movie theaters near me” is a clear signal of intent to eat or watch a film, and there are obvious ways for related brands to take advantage.

But there’s a right way to do it – and an annoying way to do it.

“Think about facilitation, not interruption,” Kawaja said. “When someone opens their phone and they’re trying to accomplish something, marketers have an incredible opportunity to message that consumer, such as what you’re telling them actually helps them accomplish what they were trying to do in the first place.”

In those cases, people, far from being creeped out or irritated, are increasingly open to location-based suggestions and services.

“Think about every app we use and how much we like it when that app knows our location,” said John Hadl, a partner at Archer Capital who sits on the board at PlaceIQ. “Who doesn’t say, ‘Yes, you can use my location’?”

It could be considered a little creepy to see ads targeted based on location or recent searches, but that will be less of a concern when consumers become more accustomed to the practice, Richardson said.

“We all search for things we want to buy [and] there is a better experience when targeting is based on location and who you are,” Richardson said.

And disabling location on a phone pretty much transforms it into a brick.

“Try turning location off on your device and you’ll find yourself going back a decade or two in terms of productivity and usability,” said xAd CEO and co-founder Dipanshu Sharma. “Location is context – location is what defines us.”

That doesn’t mean there aren’t still significant hurdles to overcome before location data is a truly useful marketing tool, including challenges around accuracy, fraud and scalability. But “many of these issues are solved by performance,” Kawaja said.

“If you’re not selling on a proxy [like cookies] and only on results, most of the issues go away,” he said. “And when those issues go away and you have the application of additional data sources, including leveraging location data, you will see the democratization of digital marketing and it will be a very bright future.”

A bright, funded future.

Although Leo de Luna, managing director of Microsoft Ventures, wasn’t all that compelled by the ad tech space before – viewability, fraud, exit issues (The Trade Desk solved that) and the defensibility (or indefensibility) of the ad tech business model were all on his mind – Microsoft Ventures is readying its checkbook.

“Things are changing and location is one of those places you can get outsized returns,” de Luna said. “We’re getting pretty close. … I wouldn’t be surprised if in the next couple of months we made an investment in the location space.”

 

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