Tracking Every Move You Make—for a $5 Gift Card

Here’s something the National Security Agency might try to ease resistance to surveillance: gift cards.

Amid the furor over the government’s collection of data on Americans, a Seattle startup called Placed has persuaded 125,000 people across the country to download an app on their mobile phones that tracks everywhere they go. Over time, they collect $5 or $10 gift cards and are entered into drawings for prizes, such as Apple iPads.

What the company gets is a trove of market intelligence that it sells to businesses and mobile advertisers. Placed knows, for instance, that Asian American mothers shop at Trader Joe’s more often than white moms, who tend to frequent big grocery chains, says company founder David Shim.

Other nuggets: McDonald’s is the most visited restaurant in the country, attracting almost half of Americans 13 and older in a typical month. Starbucks draws one in three. And if you’re 25 to 34, you’re in the demographic sweet spot to eat Cool Ranch Doritos Locos Tacos at Taco Bell.

“Your location is valuable,” Shim says, holding up his mobile phone (while being interviewed here). “It’s a persistent cookie that people carry with them 24/7.”

Cookies, of course, are the tiny bits of code that can let companies monitor Web surfing. In the real world, tracking what people are doing is more complicated. They go into basements out of reach of satellites, walk past tall buildings and frequent stores confusingly close to each other.

Placed’s software cleans up the data partly by applying logic. At 2 a.m., Shim says, it’s going to assume you’re in the bar instead of the Banana Republic next door. And people sometimes forget that their smartphones have a compass and an accelerometer, which measures tilt and motion. Placed can access those, too, he says.

Shim, a onetime stock trader who was a licensed investment adviser at 17, started Placed in 2011 after helping to develop the airfare prediction site Farecast. That business was sold to Microsoft for $115 million. Shim, now 33, raised $3.4 million for Placed in 2012 from investors that included Seattle’s Madrona Venture Group and says he plans another “healthy-sized” funding round this year.

Certainly, plenty of other companies are sweeping mobile phones for data. The San Francisco mobile security company Lookout studied 30,000 mobile apps a day last month and found that 38 percent of those for Android systems could determine locations.

Placed asks users for permission and scrubs personally identifying information before companies see the data, Shim says: “There isn’t this creepiness factor. These people have opted in to being measured.”

There is one more thing, and it might be a deal breaker for the most phone-addicted: battery life. While Shim says it’s no more than 5 percent to 15 percent of the daily charge, transmitting as many as 1,000 locations a day does drain your juice.

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