Foursquare, the popular location-based social marketing app, is expanding its focus from growing its user base to generating revenue for the company. The Foursquare app is free for users to download and free for merchants to use as a basic marketing tool. This new venture, Promoted Updates, will charge merchants and brands for the ability to offer different types of actions to their users—say, an omelet available only to Foursquare customers and not on the restaurant’s regular menu, reports Tomio Geron in his recent blog post for Forbes.com, “Foursquare Launches First Revenue Product: Promoted Updates.”
The article states:
“Foursquare for some time has had a free self-serve system for business to create check-in deals for consumers. But that feature, while bringing about 1 million businesses onto Foursquare’s platform, does not generate revenue. The new Promoted Updates product is designed as a revenue product. It will be a key test for Foursquare, after the company raised $50 million in new funding last year.”
The key question is whether Promoted Updates offer a marketing advantage to the small-business Foursquare user. It’s difficult to see why I would pay for a Promoted Update if I can offer a free check-in deal to my customers. Why buy the cow when the milk is free?
Laura Abrahamsen July 31, 2012