Foursquare Launches Promoted UpdatesAdvertising
Looks like Foursquare is finally ready to shed their reputation as just “a location based app”. By debuting their paid model last week (promoted updates) Foursquare has taken the first steps into what could be a reliable monetization source. Businesses will now be able to access a very large (over 20M) and very active (billions of check-ins) user base. Promoted updates will be paid for on a cost per action basis (though the definition of an action is still relatively vague – seems it will be more like the Twitter Promoted Tweet model where you are charged on just about everything from a click to a “favorite”).
Promoted Updates will run within the Explore tab and will be driven by check-ins, “likes” etc. Naturally this brings up a possible spamming issue but (via Adage) “According to Noah Weiss, the Foursquare product manager who oversees merchant-facing tools, “promoted updates” are still being served to users based on relevancy. For example, a Dunkin’ Donuts update might be more likely to appear in the morning, and a Hertz update would be more likely to crop up after a user checks in at an airport”.
The company is positioning their product much like Google Adwords. For example, if I typed “JC Penny” within Google, results would list relevant listings with links to shop online. Similarly, if I typed “JC Penny” into the “Explore” tab within Foursquare I might be hit with some JC Penny offers.
So far we like what we hear and you can expect there will be no shortage of future updates to the platform. If the model works and experiences wide-spread adoption you can also bet mobile budgets will increase in 2012…but do the announcements of the Local Update options and now the Promoted Update really merit a $600M valuation? You be the judge – leave your comments below!