Some of the biggest names in tech are pouring more money into digital ads that can follow shoppers around a store, ready to light up a smartphone screen when marketers think the time is right for a little nudge.
Swirl Networks, a Boston advertising software startup, disclosed Thursday that it raised $18 million from investors including Twitter Ventures, the new venture capital arm of the social media service, and SoftBank Capital. That brings the total venture financing in Swirl to $32 million.
The money will help Swirl grow and add software features its customers want, including possible integrations with Apple Pay and wearable devices such as Apple Watch, chief executive Hilmi Ozguc said.
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Swirl has about 30 employees and plans to triple its roster in the next year, Ozguc said. “We are really overwhelmed with these big retailers wanting to launch campaigns,” he said.
Swirl is an early player in the field of advertising over digital beacon networks, which use small devices that emit a signal to communicate with a smartphone. Placing an array of those beacons inside a store can give retailers and product makers a new way to send coupons or other ads to shoppers as they move through the aisles.
Shoppers who linger in the diaper section, for example, might get a digital coupon sent to their phones from a diaper brand or an ad from a baby-food company hoping to lure them to another section of the store.
Since the technology gives companies a new level of detail about customers’ physical locations, Swirl has been keen to note that interacting with those beacons should be opt-in: If you don’t give permission, you shouldn’t be tracked.
That is in synch with guidelines from the Federal Trade Commission, which told app developers it’s “important to get users’ affirmative OK before you collect any sensitive data from them, like medical, financial, or precise geolocation information.”
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Swirl has rolled out its advertising technology with several well-known names, including Lord & Taylor, Timberland, Hudson’s Bay, and Urban Outfitters. The startup also is implementing its physical-location ads in many Marriott hotels, Ozguc said.
Twitter’s investment is just the second the company’s venture capital team has disclosed. SoftBank Capital, the investment arm of a major Japanese telecom company, has previously backed BuzzFeed, The Huffington Post, and Zynga. Another Swirl investor, Hearst Ventures, is tied to one of the country’s biggest publishers.
Twitter declined to comment, but Ozguc said the potential benefit for the social media company is clear: It gets a deeper look at a new market for advertising on mobile devices, and a “shortcut” to possible deals down the road.
Swirl makes money three ways. It sells software subscriptions to retailers who want to use its technology. The startup also gets a percentage of advertising buys made by outside marketers and a percentage of the money retailers might spend to get their store’s offers featured in third-party shopping apps that partner with Swirl.
Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter at @curtwoodward.