Foursquare Thinks It Can Bring In Main Street Marketing Money

foursquare logo

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 logo

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.

Targeted advertisements

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.

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About the Author

Brendan Byrne
While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. To contact Brendan or give him an exclusive, please contact him at [email protected]

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