André Ferraz, CEO and Co-Founder of In Loco Media, talks app retention, data-driven advertising, and why understanding offline behaviour is so critical
André Ferraz is one of In Loco Media’s eight co-founders. The company was formed in 2011 as part of a student project at the Federal University of Pernambuco’s IT Center. We caught up with André to discuss how In Loco Media uses location and exclusive profiling algorithms to serve audiences with relevant and contextually aware ads.
Naspers’ Follow the Leader series profiles entrepreneurs making waves in high growth tech markets around the world.
Where did the idea for In Loco Media come from?
The idea came from a conversation I had with my father, who is a professor in computer science. We were discussing the future of the internet.
We are already living in a world where computers know so much about us. The inevitable next step is that as this continues, we won’t need to ask computers any questions. Why? Because they will already know what we want and therefore what information to provide. With that in mind, from an advertising perspective, we need to be able to predict consumer intent.
There are companies that are already dominating data. Take for example: Google and its proprietary knowledge of search behaviour; Facebook and its understanding of social interactions; and last but not least, Amazon’s knowledge of consumer purchasing. This access to so much data is what makes it easy for the big technology companies to predict what a consumer will want next, or at least with an educated guess.
But beyond this, there is a fourth layer to data: how a person acts in the physical world. Brick and mortar sales still account for 90% of the retail landscape, so capturing data like football, travel, and browsing habits, represents an enormous opportunity. But, GPS technology is unable to provide a true understanding of consumer behaviour given that it does not work indoors (where we spend a large part of our time!) and it drains too much battery to be reliable over a long period of time.
It’s for this reason that we decided to develop our own proprietary tech, through the creation of a product that is 30 times more accurate than GPS; able to detect very specific nuances, such as what floor the consumer is on; and in 24 hours, drains less than half a percentage of battery power.
This technology, and the data it collects, enables us to predict consumer intent, building a new type of digital identity. One which is much safer, more user-friendly and centred around real-time behaviour patterns, rather than on one-dimensional data such as email addresses and phone numbers.
What problem does In Loco Media solve, or put another way, what’s the main benefit it brings to your customers?
We have two types of customers: consumers and companies. For the consumer, the main benefit we offer is a private identity, both in their real and digital life. All data we collect is linked only to an anonymous profile rather than to a name or email address. This is particularly important given today’s growing cyber-threats. For companies, the main benefit is that they have much a larger reach, collecting data based on continuous behaviour. And, given the data is based on real life and real time, it’s therefore much more accurate; enabling companies the opportunity to experience the changing behaviours of today’s consumer first-hand.
How do you see data changing the way companies advertise and consumers purchase?
Data has the power to bring performance-based advertising models to the physical, consumer environment. To refer to my previous fact, brick and mortar retail represents 90% of commerce. For a long time, companies selling their produce in the physical world haven’t been able to measure the ROI of their campaigns, and this is exactly what we’re changing. Matching trends of the ‘future’ world — driven by data — to the world we live in and therefore marrying both our digital and physical behaviours, providing invaluable insight.
Why is location-based advertising so relevant today?
The user no longer has to actively provide the company or brand with data. Location-based advertising therefore offers a passive model for understanding the consumer, supporting campaigns that reach bigger audiences more accurately. It also improves the ability for advertisers to measure success by supplying foot traffic data.
Why is offline behaviour more powerful than social likes and search clicks?
Measuring offline behaviour offers insight into consumers’ real, everyday lives and that’s much bigger than social media likes and clicks. Let me give you an example: I have a friend who is extremely passionate about motorbikes but due to an accident, he is unable to ride them.
Due to his interest, he often researches motorbikes but it’s very unlikely he would ever purchase one. It would be difficult for online data analysts to identify his disability, but by monitoring his real-life behaviour, we can see that he doesn’t visit motorcycle dealerships and as such, pushing certain adverts or deals out to him would be pointless. That is extremely empowering information to have at your fingertips, enabling advertising to be tailored to the individual.
What is the key to app retention?
The most important thing is identifying and tailoring content to the user and delivering it to them at the right time to fit their needs. You wouldn’t advertise a car-related service to people who are in a bar as they are unable to drive at that moment. Real-time location analysis allows apps to deliver advertisements as and when is most appropriate. This supports advertising campaigns that are useful to the consumer, without seeming intrusive. For instance, through our product, In Loco Engage, we empower mobile app developers to engage their user base with micro-location push notifications.
How do LATAM app users differ to the rest of the world?
People in LATAM use phones much more frequently than in other regions, relying on them to get online rather than on personal computers. This gives us much more opportunity in terms of data capture and advertising.
What technological advancements do you expect to see in the mobile advertising space over the next five years?
I think we will see two major technological advancements in the next five years: firstly, improved integration with mobile payments for in-store transactions. An example of this would be that as the user enters the store, they receive an Ad for a specific product. They are then able to click on the buy button directly through the Ad, as it’s already integrated to their mobile wallet (through Apple Pay, for example). All the user then needs to do is to collect their item from the cashier.
The second major technological advancement I think we’ll see, is the integration of mobile advertising with Internet of Things technology and augmented reality.
What one piece of advice would you give to budding student entrepreneurs who want to use technology for the modern world?
No matter where you’re from, no matter how many resources you have at any moment in time, anything is possible in today’s world. Just go out there and start developing. Don’t look for excuses because there aren’t any. Remember, it’s an extremely exciting world out there and it’s yours for the taking!
This article first appeared in Naspers’ Follow the Leader series on Naspers.com
