Foursquare rumoured to launch paid media platform this summer

April 23, 2012  |  Cotton Delo for Advertising Age  |  Comments

Location-based social networking site Foursquare is said to be launching a paid-media platform in June and is looking for brands to partner with.

The new product will allow merchants to promote a deal to check in at a given area through its existing merchant platform, which allows businesses to claim their Foursquare listings.

When users search for local specials, they can see offers via paid ads on Foursquare. Those ads will be targeted using the same algorithms that power “explore,” which recommends establishments based on a users’ past check-ins, as well as those of friends and the wider Foursquare user base.

A person familiar with the matter said Foursquare is developing these offerings in consultation with marketers that the company has worked with before and who have had a big presence on the network. Previously, Foursquare has worked with brands including Pepsi, Dunkin’ Donuts, Whole Foods and RadioShack.

Walgreens social-media director Adam Kmiec said he’d been briefed on Foursquare’s nascent paid-media plans but hasn’t committed yet. Past Walgreens programs with Foursquare include the company’s pledge to donate a flu shot for every store check-in (from either Facebook or Foursquare) and an exclusive partnership to embed barcodes that users can unlock by checking in to a store and redeem for savings.

“As Foursquare rolls out its new paid-media platform, we’ll certainly be giving serious thought to how it would fit into our commitment to bring social to a local level,” said Kmiec.

Launched in 2009 at the South by Southwest Interactive conference in Austin, Foursquare became an eager partner of brands such as Pepsi, Tasti D-Lite, Bravo and Starbucks. It was a markedly different strategy from other social-media starlets like Twitter and Tumblr that steered clear of brands in their early days. (At a conference in New York on Thursday, Tumblr founder and CEO David Karp announced that the microblogging platform would allow paid advertising.)

Foursquare, which recently topped 20 million users, has been using those early partnerships as an opportunity to test and learn as it gradually maps out an ad strategy.

American Express has been Foursquare’s most prominent and consistent partner. It launched a program that enables AmEx members to sync their cards with their Foursquare accounts to redeem savings by checking in at locations such as H&M and the Sports Authority. However, Foursquare doesn’t get a cut of any of those purchases. AmEx Sync also works on Facebook and Twitter.

Foursquare declined to comment on its ad plans except to say: “Over 750,000 businesses use Foursquare to engage with their customers, and we’re continually improving our offerings to make the platform even more powerful for them. Our goal is to build scalable self-service tools that enable businesses to draw in new customers and retain and reward their most loyal ones, while also enhancing the Foursquare experience for our 20,000,000-strong community.”

But Foursquare doesn’t have the mobile check-in market all to itself. Facebook has been urging national retailers to have a strategy for their “places” pages for local stores, and last summer it introduced “parent-child linking” to let brands administer those pages centrally, which enabled them to set up check-in deals and promotions.

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