Foursquare, the popular check-in app for smartphones, has recently started rolling out ad placements for small local establishments. The new ads display in the app’s "Explore" tab and in the results when users search for similar local venues.
Foursquare helps people make the most of where they are and where they're going, and a big part of that is helping them discover great local businesses. For years, Foursquare offered free tools to help businesses find new customers and connect with people nearby. And with ads, Foursquare is offering a new way for businesses to find customers - the self-serve Foursquare Ads for small businesses.
Many advertisers are familiar with advertising platforms such as Google AdWords that allow people to place ads, Foursquare is beginning to take that approach with their new ad program and available self-service tools for potential advertisers.
Advertising on mobile devices based upon where a person is at that moment is always tricky. It can occasionally difficult to track mobile ad ROI because many users might see a mobile ad and end up at that business despite never actually clicking on the ad.
Foursquare has definitely taken this into consideration to not only bump up their own ad revenue, but also make it clear to advertisers when there is actually a conversion for those ads.
Advertisers won't pay for ad impressions. There is value in those impressions even if the user doesn't click through, especially with the current small number of advertisers and resulting low competition for promoted listing.
Ads do show up with an icon in the word "Promoted" next to i. There is no word if businesses are required to maintain a specific click-through rate, or check-in rate.
The Pros and Cons
Foursquare's ads power up location-based mobile marketing, which can be tough for a small business to execute on its own. Foursquare’s ads make it simple to target people where they are and when they're looking for you.
According to Foursquare’s research, 78 percent of all people who search locally make purchases based on their search.
Foursquare claims to have 30 billion users worldwide, but there’s debate about how active those users really are especially since Foursquare is not releasing the number of truly active users.
Because of the lack of information, ads may not be highly viewed, but those who view them are likely to be active respondents.
Businesses can make the most of them by tying their Foursquare presence with their email campaign. Create a segment of their local email subscribers and send them emails when they change their check-in special.
Since Foursquare ads are targeted based on venues the app thinks a user will like, if subscribers are checking into a venue, that will increase the chances of ad showing to their friends who aren't customers of the ad owners yet.
Foursquare and Turn
Before launching ads for businesses, Foursquare that also started branded promotions, started to generate other sources of revenue by working with ad-tech company Turn. Foursquare partnered with Turn to provide ads. Under the partnership, advertisers use Turn to identify certain Foursquare users. After finding their desired Foursquare audience, advertisers can serve display and video ads to those Foursquare users' desktops, smartphones and tablets via Turn's ad exchange partners including Facebook Exchange.
Turn's website says the company "leverages data about previous online behaviors, so you can retarget customers you know are already interested." In terms of Foursquare data, this means targeting ads based upon which shops users checked in to and when.
Foursquare's location data is not limited to the more than 3.5 billion check-ins conducted through its app to date. Foursquare also collects information from over 40,000 developers that have integrated Foursquare's location database into their apps, including popular mobile services Evernote, Instagram and Uber.
Working with Turn gives Foursquare broader reach with its data and another revenue stream beyond its partnerships with businesses and serving ads within its own app.