Very exciting news from Foursquare today:
Expanding Foursquare Ads to more small businesses around the world | Foursquare Blog: “The idea behind these new ads is simple – connect people looking for somewhere to go with businesses that want to drive traffic to their stores. Foursquare is the best way for those businesses to reach nearby customers. In our ad pilots over the past year, we’ve been honing our targeting technology, using the same algorithm that powers our Explore recommendation engine.”
Foursquare rolled out post-check-in ads for brands last week, but this is good news for businesses since Foursquare is a unique but diverse community that’s ultimately very locally focused.
The reason these ads are so unique and will matter a great deal to local businesses in the coming year or so is that the return rate on them is fairly solid. 78% of people who search on their smartphone end up making some kind of purchase. Foursquare has long needed a solid business model that could drive revenue its way and the ad program is pretty much the icing on the cake.
On the business side of things, the ads are billed to businesses on a CPA (Cost Per Action) basis, meaning you don’t have to pay for the ad unless a check-in at your business originates from it:
Foursquare Ads — Foursquare for Business: “You won’t pay a cent for your ad to show up. You’ll only pay if people visit you.”
I love Foursquare and I’m happy to see them moving forward. Advertising on mobile, particularly geolocation-based, has long been an enigma to many companies and marketers alike and I think Foursquare is definitely on the list of companies to watch.