Foursquare is rolling out its self-service ads for all companies after letting some 800 merchants test the platform in the last two months. The New York-based social-mobile firm has 1.5 million businesses using its free platform, and it now aims to get a healthy fraction of them paying for promotions.
Big brands like Hertz, Old Navy and Macy's have been buying ads on the platform for the last year. Perhaps most interestingly, though, advertisers can now employ Foursquare tips left by users about the companies as creative.
"Sometimes the best marketing messages are ones that someone other than your business wrote," Noah Weiss, Foursquare product manager, told Adweek. "But this is us building out a suite of self-service tools for [smaller players], so they can manage their own ad campaigns."
Weiss said that his team designed the system to make ad-buying a "two-minutes-or-less" process. After uploading creative, marketers set up a monthly budget ($50 minimum) and then pay with a credit card.
The ads are geotargeted based on where the Foursquare user happens to be, and they appear prominently on the phone app while being marked with the word "Promoted" and an image of a bullhorn. Marketers bid on terms similarly to Google AdWords, so prices per appearance vary.
And, there's a tool for calculating return-on-investment that's based on the number of Foursquare check-ins the ads bring about.
"What [merchants] really care about at the end of the day is whether the ads bring people into their stores," Weiss added. "We want people to experiment with us."
The Bronx Beer Hall has been one of the recent small-business beta testers, and the New York brew pub likes what it's seeing so far. Paul Ramirez, Bronx Beer Hall co-owner, said he plans on spending between $200 and $250 per month on Foursquare ads.
"I had no idea how many of our customers were hardcore Foursquare users," he said. "It's pretty interesting to see how people see our advertisements and find their way to our place."
Ramirez said his company had never done paid digital advertising, but he and his partners are giving New York-based Foursquare a shot because the investment cost is reasonable—not to mention good old-fashioned local pride.
"We went with Foursquare because we are a New York company," he said. "We like to keep it on the local tip."
Foursquare, which claims 35 million consumer users in a few dozen countries, can only hope marketers outside Gotham's boroughs share Ramirez's enthusiasm for the mobile-social app. During the next year or so, Foursquare probably needs to show a greater monetization of its platform in order to keep investors happy.
It reportedly made $2 million last year, while, per a recent Fast Company article, the four-year-old startup could bring in between $15 million and $20 million by the end of 2013.