When I first heard about the idea I was immediately suspicious: A company that is offering to mine developers' user data for cash by collecting location information for "market research purposes?" This had the makings of a class-action lawsuit if ever I heard of one, and it would be up to me to expose this nefarious scheme for what it was.
Then I spoke to David Shims, the co-founder of Placed. His firm, based in Seattle, was founded just over two years ago and is backed by the Madrona Venture Group. It specializes in "location analytics"--sifting for untapped insight in the vast details about the restaurants we visit, the stores we shop and even the streets we live on. Shims' new division, Placed Affiliate, will compensate developers whose customers are willing to become a sort of roaming focus group. Whereas I had thought that the whereabouts of consumers would be sourced to spammers or other unscrupulous marketing organizations, Placed organizes the research itself and sells the reports to clients.
From a revenue perspective, Placed pays developers based on locations measured on a per-user basis. The tiers for payouts are one week and 30 days of location measured per user. In terms of average payouts, it does vary based on the app and audience, but Shims told me that in the pilot, an app with a few hundred thousand active installs generated in excess of $2,000 a month in incremental revenue. It might not be enough to quit your day job but could be less intrusive than in-app advertising or charging for downloads.
Shims was emphatic that there was no way consumers would ever be unaware that their information was being used as part of the program. "It is incredibly important to us that the user doesn't just see some kind of notice pop up and then disappear," he said. Any developer who participates will have to not only download the Placed Affiliate SDK and request location permissions but a secondary opt-in to allow any data to be exchanged. "They also have to make our terms of service and privacy available for review. We really want to make sure there's a clear understanding."
This is the kind of proactive, privacy-first approach to apps that I've talked about in this space before, and reflects the ongoing discussions around mobile app transparency by federal and state governments. What I love about the idea is that the work Placed does could end up providing more meaningful information about user behavior than most developers could ever hope to have today. They may know how engaged a user has been with an app by looking at details about how often they logged in and when, but the picture becomes much more complete when you realize users are more likely to be playing a game when they're sitting at their favorite coffee shop or standing in line at their local bank. If I were a developer I'd probably use the revenue I earned to also become a Placed client.
Even with all those permissions and opt-ins in place, of course, there's still some question as to whether consumers will give away that kind of data. Placed is trying to mitigate that by becoming a developer itself and creating an app called Give2Charity where users can earn points that can turn into donations to their favorite cause.
At a time when Google Play has reportedly been passing on consumer data to developers on the sly and Apple has finally bothered to install HTTPS encryption in the App Store, it's nice to see at least one example of a company that is not only taking these issues seriously, but is treating them as the foundation for its business model. Other developers could do a lot worse than follow the path Placed is trailblazing.--Shane