Investors, Marketers See Potential in Tracking Users Across Devices

Cross-channel tracking – locating and targeting users whether they are on PC, tablet, or mobile – has become somewhat of a mantra, not only among marketers but also investors who see potential gold in the promise of simplifying this process.

“This is what everyone wants,” says Cass Baker, executive vice president at Leapfrog Online, a company that helps clients implement digital marketing programs, about cross-device tracking. “Can you attribute spending to actions that you are getting the consumer to take? This helps you validate what media or inventory is valuable and what isn’t.”

Most recently, Silicon Valley investors Northgate Capital, Kleiner Perkins Caufield and Byers, and Sequoia Capital put $40 million into a second round for California-based startup Drawbridge, which says it has developed such a technology. Drawbridge says its algorithm enables it to make educated guesses as to whether a user on mobile and PC is one and the same person – based on information such as location and unique IDs.

Solving the problem of cross-device tracking has the potential to open up a $25 billion ad display market, says Benjamin Krall, an analyst with Metamorphic Ventures, a NY-based venture fund, by allowing ads to be formatted to the specific device they are being viewed on. Metamorphic, FirstMark Capital, Avalon Ventures, and Lerer Venture invested $1.8 million in Tapad in 2011. The company says its proprietary technology enables advertisers to reach the same consumer with consistent ads, whether on home computer, tablet, or smartphones. “Marketing budgets haven’t yet shifted to address the mobile and tablet ad markets, but the technologies of companies such as Tapad and Drawbridge should force CMOs to open up their pocket books,” says Krall, explaining investor enthusiasm for the space.

But market participants say that current technologies still are in the early stages. Drawbridge, for example, says its technology is only accurate about 60 percent to 70 percent of the time. And, if and when such tracking becomes easier, consumers may raise privacy concerns. Drawbridge for one claims that its pairing technology does not use any personally identifiable information such as email handle, social network handle, full legal name, address book, or phone number, so it cannot identify the person.

Still, consumers could get queasy. “If companies can use this information to understand the impact of a consumer using one device over another, that’s powerful,” says Baker at Leapfrog. “But if companies are not careful with it, consumers may feel like someone is looking over their shoulder. They will need to get the balance right.”

Tracking Users image on home page via Shutterstock.