The phylogenetic placement of the morphologically simple placozoans is crucial to understanding the evolution of complex animal traits. Here, we examine the influence of adding new genomes from placozoans to a large dataset designed to study the deepest splits in the animal phylogeny. Using site-heterogeneous substitution models, we show that it is possible to obtain strong support, in both amino acid and reduced-alphabet matrices, for either a sister-group relationship between Cnidaria and Placozoa, or for Cnidaria and Bilateria as seen in most published work to date, depending on the orthologues selected to construct the matrix. We demonstrate that a majority of genes show evidence of compositional heterogeneity, and that support for the Cnidaria+Bilateria clade can be assigned to this source of systematic error. In interpreting these results, we caution against a peremptory reading of placozoans as secondarily reduced forms of little relevance to broader discussions of early animal evolution.