Mashable reports that Foursquare is now courting small business in a fresh way, enabling large advertisers like Burger King, Gap and Starwood Hotels to promote themselves on a platform built to let small businesses do exactly the same thing. These listings show when a customer appears close to a business’ location. Small businesses were already capable to offer deals and discounts whenever a user checked in to a location, nowadays Foursquare is enabling them to, as an example, attract nearby customers by showing an image and review left by a Foursquare user at this particular location.
What’s in it for Foursquare?
Foursquare is a location-based social networking site for mobile devices, such as smartphones. Typically its users “check in” at various venues using a mobile website, text messaging or a device-specific app. Their specific location is available through the GPS in their mobile device. Foursquare has thus far been a way for consumers to promote their favorite bars, hangouts and restaurants. Now, those places will be able to advertise themselves directly to consumers. While Foursquare has gathered some 25 million registered users, they earned just $2 million dollars last year, according to The Wall Street Journal. They’re clearly searching for ways to pump up the revenue.
How the ads work
The way the new ad platform works is through targeting Foursquare users based upon their locations and check-in histories. Merchants have the opportunity to attract nearby customers with specific tastes, say for example a hankering for Far Eastern cuisine, or simply just customers who had checked-in to their location previously. Merchants are able to stop their Foursquare promotions whenever they want, and the pricing for this is similar to a pay per click model, that is, they will only be charged on a “per action” basis (when a user actually taps on a promoted listing rather than merely looking at it). Initial ad prices are $0.50 to $3 per action, but that could change as it is released to everyone. Foursquare CRO Steven Rosenblatt said, “Small businesses are willing to pay for local advertising if it makes sense.”