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Foursquare's New Ad Feature

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Foursquare’s New Ad Feature

Foursquare has unveiled a “Promoted Updates” feature that layers on new ad functionality for brand s seeking to target local customers. And here at TMA, we see the benefits tied to the new promoted products for our brand  partners. In fact TMA recently partnered with JCPenney as a promoted product launch partner to create a Foursquare-promoted special tied to   jcp & the USO.


What are some of its advantages and  drawbacks?

The biggest advantage is that Foursquare is enabling their launch partners to push content beyond the current users that are actively engaged with a brand  and  enable connections with an entirely new customer base that may have a potential affinity for the brand  but is not actively engaged.

The intelligence of the algorithm is also a key point of differentiation. The promoted updates display algorithm is based on a users actions tied to location, check-ins, tips & even time of day as well as taking into consideration a user’s friends’ tastes.

One potential drawback tied to promoted updates specifically is the fact that they are tied to the   Explore tab. While this tab has seen increased engagement,  a concerted effort may need to be introduced to modify existing user behavior beyond the utility of checking into a known location. Luckily, as more of the promoted products are rolled out additional integration into a users activity stream by brand s will become more prominent.

What are Foursquare’s prospects for monetization through this approach?

The promoted suite of features that will be rolling out over the next few months will serve as the framework for a decent revenue model for Foursquare. By allowing the 750,000+ merchants to amplify their messages to individuals not currently associated with their brand  but may have a loose affinity is a step in the right direction.

By providing relevant and  highly targeted views tied to promoted products, Foursquare is maximizing revenue opportunities by mapping their   20 million users to merchants and  deals that are truly relevant to them. By also taking into account a user’s social graph, Foursquare further drives validation of the recommendations and  the probability for promoted items to gain additional traction and  ultimately conversion.