One of our ongoing analyst predictions is heightened M&A activity in the location intelligence sector. The thinking is that headwinds — from both public sector legislation and private sector measures — compel companies to pool resources to boost their capabilities to generate location data.
The latest sign of this trend came with yesterday’s announcement that PlaceIQ will acquire Skyhook’s Geospatial Insights business line. Some of you may remember Skyhook from its prominence in the early days of the iPhone 1 (pre-GPS in the iPhone 3G) for extrapolating device location in Google Maps.
Boston-based Skyhook is of course known for much more than that, and has since developed its geospatial insights business considerably. Its Precision Location software integrates several location standards such as Wi-Fi network triangulation and device ID to pinpoint device location.
So what does PlaceIQ gain from the acquisition? Given that pinpointing device location is Skyhook’s specialty, PlaceIQ will be able to better do its thing. That translates to serving ads based on location, and tracking post-exposure foot traffic to attribute campaign effectiveness, among other functions.
As background, location intelligence players generally offer a value proposition that is a function of the data sources they assemble, and how they integrate those disparate databases for effective insights. Data sources can range from device location to place (store) locations and their unique identifiers.
Skyhook will add value to both of those areas, adding to PlaceIQ’s existing data stronghold. PlaceIQ will also acquire Skyhook’s data enrichment SDK. This packages up its technology for brands that want to segment their own first-party location data (think: store visitations) to extract insights.
As part of the deal, PlaceIQ will service Skyhook’s existing Geospatial Insights customers which includes access to PlaceIQ’s line of location intelligence services. This will deploy PlaceIQ’s specialties, such as those mentioned above, as well as competitive conquesting and consumer segmentation.
Back to the broader M&A trend, the location intelligence sector continues to face privacy-driven headwinds. Given legislation like GDPR and CCPA, as well as more impactful but less-discussed factors like mobile platform updates, there are a new set of challenges for collecting consumer movement data.
These restrictions could, again, drive players to pool diminishing sources of quality location signals. One example of this principle is the sector’s biggest deal of the past few years: Foursquare’s acquisition of Placed, which boosted its data intelligence chops. Several others have followed.
Beyond headwinds, the ground is shifting in other ways. The proliferation of wearables, smart devices and sensor-infused IoT hardware has meant that the opportunity for location intelligence transcends smartphone tracking. Skyhook has begun to zero in on these devices over the past few years.
Accelerating all of the above is Covid-inflicted lockdowns. As we discussed with Foursquare’s (then) CEO David Shim, diminishing foot traffic volume means location intelligence’s value is elevated. And location data will continue to have a place — though increasingly scrutinized — in a post-Covid world.