In a blog post today from the location services company Foursquare, the company made it clear that it believes they have much to offer with its self-service platform for businesses to purchase advertising on its service.
Foursquare ads open to small businesses
“Today, we’re opening Foursquare Ads to all small businesses around the world. We’re moving past the days when business owners have to figure out if a ‘like’ or a ‘click’ has any meaning in the real world; now they can tell if someone who saw their ad actually walks into their store. We built this to be simple and flexible, learning from our four years of data and relationships with over 1.5 million claimed businesses.”
The program has been testing the program for roughly eight months before today’s launch. Both Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB) have been finding recent successes in appealing to small businesses interested in purchasing advertising on its sites. On the other side of the coin, both Groupon Inc (NASDAQ:GRPN) and Yelp Inc (NYSE:YELP) have angered business owners by promising customers results that they haven’t delivered. Foursquare joins Twitter, Inc. (TWTR) in looking to perform like Google and Facebook rather than Yelp and Groupon.
Presently, small businesses use about 3 percent of their marketing budgets on online advertisements. For each of the aforementioned companies, this is a huge amount of money that none of them are seeing and that is precisely why Foursquare along with the others is aggressively targeting this potential revenue.
Foursquare boasts 40 million customers who check in at businesses, including bars and restaurants, through their smartphones. Because of the location-driven nature of Foursquare, the company believes that it can push ads at customers when they are near its clients’ businesses. If users of Foursquare continue to use the service, or “check in” as they already do, Foursquare will be giving advertisers concrete results to calculate the effect of their advertising dollars.
This certainly gives it an advantage over Groupon or Yelp which essentially leave customers guessing as to effectiveness of its ads. This is a tremendous advantage according to Jeremy Kagan, CEO of online marketing firm Pricing Engine, who says, “It’s about as close to social media can get to measuring return on investment without going into the point-of-sale system.” That said, Kagan also says that at present he continues to receive Arby’s ads from Foursquare despite the fact that his “checking in” at restaurants, bars, and businesses should give Foursquare no belief that Arby’s matters to him.