Foursquare is actively trying to profit from the actions of its 35 million users by showing them targeted ads after they check in at specific locations.
The 4-year-old location-based social network encourages people to "check in" at venues while out and about, and uses that check-in data to recommend nearby places for members to check out. Now, the company hopes to capitalize on those check-ins by showing members ads after the fact.
Captain Morgan, a Diageo brand of rum, is one of the first advertisers to test out Foursquare's post check-in ads, AdAge reported. The brand is using the new unit to suggest Captain Morgan cocktails to adults immediately after they check in at bars or nightclubs. Toys R Us has also been experimenting with post check-in ads, showing coupons to some people who check in to kid-friendly areas such as parks and pools.
A Foursquare spokesperson confirmed that Captain Morgan post check-in ads started appearing in the application on July 1, while the Toys R Us units debuted in June. The company will now be rolling out the ads out on a regular basis, the spokesperson said.
Foursquare's new check-in unit, which first came to light through a leaked slide deck, is designed to provide people with information or offers they can use later and is priced on a cost-per-click basis, meaning that advertisers are only charged when a person clicks on the ad or saves it for later.
The revenue-generating initiative comes a year after Foursquare started allowing merchants to promote their updates to members for a fee, and a few months after it secured $41 million in debt funding. It's unclear how successful the New York-based startup has been at generating revenue, though CEO Dennis Crowley has insisted that reports suggesting his company can't make money are wrong.
Still, Foursquare's latest play for advertising dollars seems to be at odds with how the company is hawking its application to new users. After failing to convince the masses of the value of sharing their location, Foursquare has de-emphasized the check-in aspect of the application and shifted its focus instead to local search, which makes it a rival to Yelp. Foursquare's new pitch is that it can provide people with personalized suggestions on where to find the best cup of joe or happy hour.
Update, 11:46 a.m. PT: With statements from Foursquare spokesperson.