Big brands have been buying ads on Foursquare for the last year, but this week the platform made self-service ads available to any company interested. Currently, 1.5 million businesses use the free platform, but Foursquare is now hoping to get these companies interested in paying for promotions as well.
This update allows companies on Foursquare to highlight user tips and reviews within their ads. Regarding this, Noah Weiss, Foursquare product manager said, “Sometimes the best marketing messages are ones that someone other than your business wrote.” Additionally, a discount or special offer can be used in place of a consumer review as a part of the ad.
The ad-buying system is designed to make it as easy as possible for companies to pay for promotions on Foursquare. Marketers just need to upload creative, set a monthly budget ($50 minimum), and pay with a credit card. The company will only be charged when someone clicks on its ad to get more information or when a user actually visits the location.
From there, the ads are geotargeted based on a user’s location and appear with the word “Promoted” clearly marked next to them. Much like Google AdWords, advertisers can bid on terms, so the prices per appearance of the ad do vary.
With this system, companies can see how many people view their ad, how many people click on their ad, and then, a Foursquare exclusive, how many of those people actually visit their store. Businesses no longer have to figure out how many “likes” line up with physical consumer interest because, through Foursquare ads, they can monitor both online attention and visits to their storefront. Foursquare also has a tool that calculates this return-on-investment based on the number of check-ins a given ad initiates.
This latest move to open up ads to any and all small businesses worldwide likely comes as a result of Foursquare’s struggle to generate some kind of profit following the $112.4 million it’s received in capital from investors. This past year, the social media company made $2 million in revenue, not nearly enough to keep these investors happy. However, in a recent Fast Company article, it was anticipated that Foursquare could potentially bring in between $15 and $20 million by the end of 2013. This ad update may be just what the company needs to increase monetization of the platform.
See the original Foursquare announcement here.
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