Prodge Reaches Unicorn Status in the Changing Privacy Landscape

Prodge Reaches Unicorn Status in the Changing Privacy Landscape

When Apple changed its privacy rules in April 2021 to require companies to get permission before collecting user data online, retailers and digital brands were left scrambling to find new ways to collect information about shoppers.

The answer may lie in online surveys.

Prodege, a market research and consumer survey startup, earned unicorn status last month thanks to a service that rewards users for completing surveys and making purchases on its apps and websites like Swagbucks and MyPoints. The El Segundo-based company sells information about shoppers’ habits and preferences to market research firms and retail customers such as Walmart, Clorox and DoorDash.

Prodege, who was appointed CEO in 2014 and previously held the same role at movie ticket store Fandango and e-commerce site Shopzilla, said Chuck Davis, chairman and CEO of Prodege.

Founded in 2005 as a charitable giving platform, the startup turned a year later to launch search engines for entertainment and sports teams. In exchange for the use of search engines, consumers were entered into raffles to earn merchandise. In 2008 Prodege introduced its first rewards site, Swagbucks, which returns money to members for filling out surveys, purchasing gift cards, and shopping at nearly 1,500 partner retailers. The company has since acquired six similar platforms, and distributed a total of $1.8 billion in rewards to an audience of 120 million registered members.

Recent years have seen a buying spree of Prodege as it has sought to increase its audience footprint. In 2020, Massachusetts-based Upromise, a cashback rewards platform in the form of a 529 college savings plan, acquired Massachusetts-based Upromise. Earlier that year, it acquired Santa Monica-based Coupon Cause, which works with retailers like Target and Amazon. . YSense, which it acquired in 2019, rewards users for testing new services and watching product videos.

In December, the company announced a “significant” investment from Boston-based private equity firm Great Hill Partners. Although both Great Hill and Prodege declined to reveal details of the deal, sources familiar with the deal confirmed that they value Prodege north at $1 billion.

“There is a growing recognition from consumers that their data, attention, and time are worth something,” said Joseph Gorwitz, founder and president of Prodege. “There are trillion dollar companies built from it and [consumers] Now you see the opportunity to take advantage of that and seize a portion of that house.”

But the other half of Prodege’s business is built on understanding consumer behavior — surveying users’ opinions about their habits and analyzing that data for brands. For example, Prodege members earn a $15 bonus for signing up for Dollar Shave Club, the Marina del Rey-based product care delivery service. Prodege can then scan these new customers and send the results back to the Dollar Shave Club to get a clearer picture of their customer base.

And soon, with a new on-demand desktop app, corporate customers will have direct access to Prodge’s audience for campaign design and hosting. It is a strategy that could become the norm as advertisers struggle to reach consumers who could have monitored them almost immediately.

“It’s no surprise that a company like Prodege thrives in this environment,” said Alison Schiff, managing editor at AdExchanger, a digital ad analytics website. Schiff noted that many new start-ups, in particular, are looking to join an industry built on the idea that consumers want to share personal information in exchange for some kind of reward.

This service is becoming more and more valuable as tech companies continue to change the privacy landscape. Last spring, Apple introduced App Tracking Transparency, which displays an alert to users to consent to being tracked online. The change means many brands and advertisers will lose access to shoppers’ browsing activity and any discounts or promotions that led them to make a purchase. Meanwhile, Google has also announced plans to block third-party cookies from its Chrome web browser.

Among iOS users running Apple’s updated software, 38% opted out and 62% opted out of data sharing, according to an October report from marketing analytics firm AppsFlyer.

“The gold standard for data is behavior,” said Tina Moffitt, principal analyst of business-to-consumer marketing at Forrester Research. “This pipeline is being cut off by data denial and privacy measures.”

Moffett said she expects more marketers to turn to surveys and polls given privacy protections. What they will miss is behavioral data – how long consumers spend searching for a product, or items that are paired together in their shopping car.

Not that Prodege is complaining. The company takes about 5% from every purchase made on any of its seven platforms. In 2021, it generated nearly $300 million in revenue and added about 3,800 new customers.

“Brands buy into it — and they’re happy to participate rather than put it all into Google’s revenue,” Gorowitz said. “It builds a relationship with the consumer and they feel more comfortable sharing their data, opinions, and time.”

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