Snap Inc acquires location analytics startup Placed for $200M

Image DREW ANGERER  GETTY IMAGES

Online ads are not only created to get you into a digital shopping cart, but into a brick and mortar store. In a statement, the company explained: "Connecting online with offline is a problem that the advertising ecosystem has been working toward solving for a long time, and we share that goal".

Snap, a company which relies nearly entirely on advertising for its revenue, understands this.

Snap Inc., has acquired location analytics firm Placed, to better measure whether Snapchat's in-app ads are leading to store visits and offline purchases. The purchase was revealed in a blog post from David Shim, the founder and CEO of Placed.

Terms of the deal for Placed Inc. were not disclosed in an announcement Monday, but Geekwire reported that it was worth up to about $200 million, which would make it Snap's biggest announced purchase. At the moment there's no telling what Snap's plans are for adding the PayPal SDK into Snapchat, and it's possible that it has no plans to use it for anything at this point, but at the moment it's important to remember that there is no confirmation on what Snap may be doing with the SDK right now. Its Placed Insights solution uses a "place graph" to quantify the relationship between people and the physical places they visit, such as retailers, restaurants, banks, hotels and more, with results categorized by demographic segments and geographic regions.

So why did Snap, maker of super-popular messaging app Snapchat, pay so much for a startup that had raised $14 million in its six years of existence?

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Placed measures how effectively advertising campaigns drive customers to buy merchandise in-stores.

Placed which employs around 100 people, will continue to operate independently out of Seattle and other offices in NY and Los Angeles, according a GeekWire report that also noted that the deal is one of Snap's most expensive acquisitions.

Shim will continue to lead the team and report to Snap Chief Strategy Officer Imran Khan, the report noted.

Los Angeles-based social media company Snap said it will operate Placed as an independent business. The deal will improve upon some of its own first-party offerings, such as Snap to Store, by allowing advertisers to measure impact across multiple platforms. The company had revenue of $149.60 million for the quarter, compared to the consensus estimate of $158.32 million. Partner sold revenue was $12.3 million and other revenues were $8.3 million, primarily driven by Spectacles.

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