At first glance, Foursquare can be misconstrued as nothing but a simple social media network built for entertainment purposes. The one-line description usually classifies the product as a “game where you check-in at locations and earn badges.” More sophisticated ones explain how users can receive advice on where to eat, what to order, where to find what you’re looking for.
Though these statements are all true, they represent only a fraction of Foursquare’s current capabilities – and its potential for permanently changing the online/offline corporate advertising relationships.
Brand and Business Partnerships
On February 1st, 2010, the trendy network television brand Bravo! TV announced a partnership with Foursquare, the location-based social networking sensation. This alliance would enable Foursquare to highlight locations, or “check-in points,” relevant to Bravo Television shows and stars.
Though this wasn’t the first time Foursquare has worked with a business or brand, it is its first true media collaboration. This endeavors, and the partnerships it has since then put into motion (Zagat, Warner Bros., and HBO), makes this a significant milestone in the expansion of the Foursquare program into mainstream everyday life.
Though these are the only true partnerships Foursquare has produced thus far, they began a system called “Foursquare for Businesses,” launched in September 2009. This enables businesses to list specials for Foursquare users (such as 2 for 1 coffee on your first check-in, free drink for the venue Mayor, free desert for every 10th check-in). Not only do these deals appear when users check-in to the venue in questions, but they also appear when a user checks-in to any venue nearby. This model is an ingenious way to build reliable clientele, and to create new ones. It is also a free service offered by Foursquare (at least for now.)
Where Twitter is Failing, Foursquare is…
Foursquare has been projected by many social media industry leaders to be the Twitter of 2010. The two internet start-up companies have a similar user-base and measured growth. With their ability for effortless and instant updates, both are extremely pertinent to today’s digital and mobile lifestyle. Just this month, Foursquare reached the 300,000 users benchmark, jumping from the Innovators phase to the Early-adopters.
Where Twitter has yet to flourish is its ability to create revenue (or dare I say, inability to even conceptualize the means of doing so.) This is what sets Foursquare apart. Though their current “Foursquare for Businesses” does not charge companies to list their business or specials, this model holds the ability to seamlessly migrate over to a charging system without causing uproar as Twitter has potential to do.
In their current free listing system, Foursquare is able to build their database of businesses, making the social networking site more relevant to consumers. These businesses will also advertise Foursquare deals on their own, to encourage repeat clientele. Through this circular relationship, Foursquare will also be able to collect pertinent data on their listed businesses and the success of their specials. Unlike Twitter, which has struggled to offer measurable results to justify their ability to charge for accounts, Foursquare can compile data proving success as they continue to grow and explore means of turning a profit.
From “Pay Per Click” to “Pay Per Check-in”
These partnerships with local businesses have the potential to grow to a “Pay Per Check-in” model. Many businesses already use Google AdWords, allowing them to only pay for advertising that yield them coverage. This “Pay Per Click” model allows targeted advertising on small budgets. Foursquare can pioneer a “Pay Per Check-in” model, offering premium accounts to businesses and charging a nominal fee per check-in, or per special awarded. Would a business mind paying a few cents to drive clientele on a more regular basis? I don’t think so, and I think on a broad scale, this could be a lucrative element to Foursquare – and a valuable asset to businesses’ digital brands.