Taking a cue from Facebook’s Sponsored Posts, and Twitter’s Promoted Tweets, Foursquare has launched Promoted Updates, yet another shot by the leader in the hyperlocal-social space to monetize its user base and generate revenue.
Promoted Updates work similar to Twitter’s Promoted Tweets. They are displayed on the top of Foursquare’s Explore tab on its mobile app, and are probably pay-per-action ad units, which clearly demonstrate ROI for the advertiser.
Promoted Updates are currently available only to select advertisers as part of a pilot program. They are essentially a paid version of Local Updates, which enables merchants to reach out to users in the vicinity.
They will be targeted using the user’s location and their check-ins, tips, likes and lists. The targeting will be done using Foursquare’s Explore Engine, which will ensure that all promotions are relevant.
While Foursquare has much fewer users than Twitter or Facebook, it has the capability to directly drive sales in a much more efficient way, which makes its user base all the more monetizable.
Foursquare’s Product Manager, Noah Weiss, said:
“This is the first time ever that we’re allowing businesses to pay to promote their business in Foursquare. It’s obviously a very exciting milestone for us.
Dennis (Crowley, Foursquare’s CEO) has always said that we’ll do it when we’re ready, and we’ll do it in a way that we think makes for a better experience for users. The timing now feels right … the product is in a place where it makes a lot of sense for merchants who want to drive customers into their stores and for users who are looking for inspiration about something to try out.”