Chinese giant Alibaba makes strategic investment in “location as platform”

In contrast to much of the historical and still-current thinking about location as a “vertical,” it’s really a signal and tool that offers an expanding array of use cases across industries. These include audience identification, competitive intelligence, user-experience improvements (e.g., personalization), online-to-offline attribution and internal operational insights.

Google recognizes many of these benefits and is making significant investments in tracking offline transactions (from AdWords and Display), as well as building out “The Physical Web.” To a somewhat lesser degree, Facebook has boarded the same train. Another major internet company that has awakened to location’s many possibilities is Chinese commerce giant Alibaba.

The company made a strategic investment in location platform PlaceIQ, which was recently announced, though it happened months ago. PlaceIQ doesn’t see location as an end in itself (e.g., geofencing business locations). Rather the company promotes location as a utility to identify and model consumer behavior, as well as an attribution and a media planning tool — like a cookie for the real world.

In a call yesterday with PlaceIQ, CEO Duncan McCall said that his company has been working with Alibaba for months and was very impressed by its embrace of location as a “horizontal enabling technology.” He added that Alibaba has a very long-term vision regarding location and location intelligence. “This is going to be a core capability that will affect everything they do.”

McCall said that after doing due diligence on a range of companies, Alibaba approached PlaceIQ and sought to use its technology stack with the Chinese company’s own first-party data. “Alibaba is a company that has its own maps, its own version of eBay and YouTube, its own transactional data and an SDK that captures location across millions of users,” McCall pointed out. They came to us saying, “Location is a gigantic signal that we own; how do we make sense of it?”

Seeing location as strategic, they became an investor in PlaceIQ. “They’re taking our technology and deploying [it] within their infrastructure in China,” McCall explained.

The proliferation of mobile devices and their now primary usage has opened many marketers’ eyes, and it has introduced numerous possibilities around location data and its uses. This is why nearly every app asks for user location. The data is extremely valuable.

But location data isn’t simply for retailers and others doing business offline. Ecommerce companies should be utilizing offline user data as a targeting tool. For example, ecommerce company Chegg uses MasterCard offline transaction data as a tool to find relevant audiences online, even though it has no offline sales.

Companies that are still thinking that “local” and “location” are only about small business or are of marginal relevance to them risk being left behind by competitors that understand the power of location intelligence and are starting to integrate it into their marketing and operations.