Old media and new media get into beacon-based advertising with an $18M investment in Swirl
Swirl, a company that is leveraging Bluetooth-enabled beacons to create a proximity-based mobile marketing platform for in-store experiences, has already made inroads with retailers. Stores such as Lord and Taylor, Urban Outfitters, and Timberland are using the beacon and sensor system to send real-time, location-based offers and discounts to consumers.
Now, old and new media institutions alike are placing bets on the Boston-based company.
Today, Swirl announced that it has raised $18 million in new funding from SoftBank Ventures, Hearst Ventures, Twitter Ventures, and Longworth Venture Partners. Since launching in 2011, the company has raised $32 million in funding from the strategic partners mentioned above as well as early investors like General Catalyst who didn't take part in later rounds.
What's interesting about the investor pool is that it represents two sides of the media divide.
On one side, you have Hearst Ventures, a subsidiary of one of the largest print media conglomerations in the world. And on the other you have Twitter Ventures, the investment arm of an Internet powerhouse trying to figure out more ways to make money off its social media soundboard.
The answer, it seems, for both the old guard and the new, is that they see a tremendous opportunity to expand the reach of their varied approaches to advertising and marketing to the actual moment when a customer makes a shopping decision.
Swirl's platform allows advertisers and retailers to send notifications, advertisements, discounts, and special offers when a consumer is within range of its sensors. A hypothetical example would be shopper at Urban Outfitters looking at a pair of Vans sneakers who then receives an offer for a discount from Vans, which has either partnered through Twitter's or Hearst's advertising services. On the flip side, a competitor like Converse could also have a partnership and offer their own discount notification while the shopper is looking at Vans shoes.
At the moment, Hearst, the parent company of magazine brands like O Magazine, Seventeen, Cosmopolitan, and Esquire, is trying to figure out how to transition from its traditional source of income -- ads in weeklies and daily newspapers -- to a new revenue source, the ever-evolving world of online marketing. Swirl offers another option of direct marketing that other advertising and marketing firms cannot.
So it's quite a sign of the times that Twitter too, which is seen as more progressive than a stodgy company like Hearst, sees the same tactic as an inroad to expand its advertising offerings.
I don't know whether the move is a good one or not for Twitter, but it does signal that the company is getting creative in trying to monetize its platform beyond its active user base, which has not grown as quickly as Wall Street would like.
Depending on your perspective, taking the same strategy as Hearst could be viewed as smart or desperate for Twitter. The same can be said for the staid Hearst Corporation.
But then there's an alternative interest in Swirl: the amount of data on consumer behavior that the company's beacon and sensor system collects. In terms of having control of a massive swath of information on how people act while shopping -- knowledge that brands would be very interested in having access to -- the strategic investment in Swirl gives Twitter and Hearst a close relationship with the gatekeeper of that data.
One thing is for sure: old publishing and new media are trying to figure out how to expand beyond their current advertising offerings. In Swirl, they both see an opportunity beyond the print page and the webpage.