More than 40 million people across the world use Foursquare to make decisions on where to go next, so the company has opened its advertising platform to all local, small businesses.
Earlier this year, Foursquare revealed an additional $41 million funding from investors, with Dennis Crowley, CEO and founder of Foursquare, saying how it will help the geo-location and mobile search service diverge from being a mere mobile check-in app towards a real, moneymaking business.
During that announcement, Foursquare said it opened the advertising platform to about 50 large advertising firms.
In July 2013, the company started to expand Foursquare Ads to small businesses across the world. Noah Weiss, product manager of Foursquare Ads, told TechCrunch that about 800 small businesses across 36 countries have joined the limited beta program.
On Monday, it announced the opening of Foursquare Ads to all marketers and advertisers for businesses of all sizes. The move is an attempt to tap into more than 1.4 million small businesses that registered and are using the free service.
Even though registration already makes these businesses searchable from nearby areas through the mobile app and website of Foursquare, the option to purchase ads through the platform will increase their exposure.
Where to Create Foursquare Ads
Small businesses may now visit the Foursquare Ads dashboard and start their own ad campaigns. Like before, Foursquare still pushes its efforts using location-based check-in services to isolate itself from popular social advertising platforms.
The payment is based on the number of people who visit the actual place or establishment, and advertisers that work for the small businesses will be charged on the number of visitors.
The ads dashboard includes other metrics, such as the number of people who viewed a particular advertisement and the number of clicks or taps each advertisement received. Then again, the number of visitors is top priority.
Google, Facebook, Groupon, Yelp, and other similar providers – all of these provide location-based mobile apps to zero in on local and small businesses. For that reason, Foursquare wants to position itself as a unique service from the competition.
Weiss said payment based on user response to Foursquare Ads allow the company to give advertisers no minimum commitment up front. Advertisers only have to provide a bid and a budget, similar to Google AdWords. Weiss is an ex-Googler, and he told TechCrunch the advertising platform is not fully built within the confines of Foursquare.
Foursquare is pitching flexibility when it comes to the content advertisers show in the ads. In the interview with TechCrunch’s Ingrid Lunden, Weiss said most of the tools available on the market are unidirectional, with focus on margin discounts and daily deals. He added that Yelp and similar services see people making upfront commitments to pay 100 bucks monthly for six months. Foursquare intends to get rid of those weaknesses.
Foursquare said ads may have cut-rate deals and focus on user-generated photos or user reviews of the place at the same time.
Where to Find Foursquare Ads
After the announcement, Foursquare ads will now appear in two locations: targeted search results pages and the home screen of the app.
Targeted search results pages are arranged by keyword and distance between the current and the specified location. It is the company’s own version of Google search ads. An ad listing will have a bright, clear background color with a brightening badge, said Weiss.
On the home screen of the Foursquare app, a “recommendation cards that show up” notification will appear after login. It is the company’s display effort to show more intent on the funnel. Like search ads, these ads are based on the current location of the user. The app will show the nearest recommendations and ads within cities, usually in walking distance, whereas users of the app are expected to travel on a vehicle in remote areas.
Foursquare is changing how it handles recommendations, with a recent extra boost on notifications that tell users if they are lucky enough to be near a cool place to visit. Whether or not advertisements show up in notifications, it depends on the current location of the user.
Foursquare said the ads will run only on its mobile and web platforms. It has yet to announce plans if it will extend support on other platforms. Weiss said the company is focused on the monetization of its own apps as of this time.
How Foursquare Ads Are Doing for Existing Advertisers
According to Weiss, the performance of Foursquare Ads for large advertisers surpassed the company’s targets thus far and is “growing at a clip.”
Foursquare will now focus on the number of renewals it will receive. Weiss said it is a first for the company to measure foot traffic in stores. The reason Foursquare Ads will roll out to small businesses is due to attractive reports from large businesses.
Weiss said the average cost per action is in the “very affordable” $1 to $2 range for the 800 existing small business advertisers.
The Foursquare product manager told TechCrunch, “In terms of ROI, a customer is worth $5 or $10 for them, so this is an amazing multiple based on what they’re paying for ads.”
The typical budget for Foursquare Ads per business in the US is in the $100 range, and higher than that for other countries. Weiss said conversion rates are around the 1 percent to 4 percent range.
Earlier this year, Foursquare added new members to its advertising team, so it may account for selling everything on its own platform. Weiss said, however, that the company is mulling over plans to work with third-party marketers, especially the various methods it can team up with social media ad buying platforms.
Foursquare is preparing to everything before it exposes its API to developers and marketers. To end the interview, Weiss said these are fixed plans for 2014, but not until the company is well-prepared. Foursquare may partner with resellers in markets where it does not have a strong sales presence.