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Will Foursquare Cash In Those Check Ins?

Look Ma, I'm the Mayor of Monetization!

Monday, May 10, 2010 | Posted by Aaron Goldman

Posted In: Digital Marketing / Press / Press Mentions

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Today I was cited in a MediaPost story about ads on Foursquare.

As reporter, Laurie Sullivan, points out, currently Foursquare "offers an advertising platform for merchants that allow brands to promote specials, but it doesn't target mobile ads. The platform allows companies to claim their business to run promotions on the site. Through geo-tags, people within a specific geographic radius will see the specials." 

In prepping this piece, Laurie asked me some if I thought advertisers would sponsor check-ins. My response is captured in the excerpt from the article below. More commentary follows on the other side...
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Geolocation ad targeting isn't new, but Aaron Goldman, Connectual managing partner, believes coupons and specials could get people checking in more often. When someone checks in at a business location they could get a coupon or reward. The business owner would pay for that check-in if, and only if, the consumer redeems that offer. "This type of pay-for-performance model would properly align incentives and value," he says. The message of the targeted ad could go deeper by knowing exactly where and when someone comes within a set radius of the store, he says.
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I think a sponsored check-in model could be great for the Foursquare ecosystem -- yes, it's big enough to be called that-- as consumers would benefit from timely, relevant offers and businesses would benefit from exposure in various social media feeds from people checking in at their location (not to mention, potential sales boosts by converting browsers to buyers).

As for the pricing model, I could see cost-per-check-in or cost-per-action working. But Foursquare would need to give businesses an enhanced listing or something better than what the non-paying businesses get when someone checks in at their location (which is really just a name drop). Perhaps a link to their website or map of their location could be added to the status update that gets automatically posted to people's social media accounts  when they check in. 

As I told Laurie, though, I think a performance-based model would better align incentives -- encouraging businesses to offer special deals to Foursquarers -- and value -- as businesses only pay for actual conversions.

Only time will tell what kind of ad program Foursquare rolls out but one thing that's certain is that it will have to bow some sort of ad model if it wants to justify its $60-70 million valuation.