Foursquare has started rolling out post check-in ads -- ads served to users immediately after they check in at certain locations -- and Captain Morgan is one of the first brands on board.
The Diageo-owned rum brand is using the new ad to influence consumers immediately before making a purchase decision. Foursquare users who check in at certain bars, nightclubs or restaurants will be served an ad suggesting they order a "Captain and cola," "Captain and ginger" or "Captain mojito."
Diageo plans on advertising its vodka brand Smirnoff via Foursquare post check-in ads starting in August. The Captain Morgan campaign began on July 1 and is slated to run for four to six weeks. The new post check-in ads join promoted listings within the "explore" tab.
Pricing for post-check-in ads is on a "per action" basis, meaning brands are only charged when a users taps on the ad or saves it for later use. Foursquare declined to comment on how much a post check-in ad campaign costs.
The new ads are also being used to help retailers or merchants lure consumers who check in outside of their locations. Toys R Us has started to use this capability by targeting people who check in at family-friendly locations such as parks, playgrounds and daycares. A June 19 post from website About Foursquare shows the author being served a 20% off, limited time use coupon for use a Toys R Us or Babies R Us after checking in at a public swimming pool.
Foursquare chief revenue officer Steven Rosenblatt said in an earlier interview that Foursquare will not allow brands to use post check-in ads for "conquesting;" allowing one brand to advertise to a user who checks in at a competitor's location. If a user checks in at a restaurant, for instance, a rival eatery around the corner would not be able to serve that user a post check-in ad for half off its Pizza Shooters, Shrimp Poppers and Extreme Fajitas Appetizer Ensemble.
Post-check-in ads are part of Foursquare's larger initiative to use its trove of check-in and location data to develop more contextualized ad units both within Foursquare and on other platforms. Central to that strategy is using its check-in data to place users into different consumer segments such as "Mobile Mass Market Mom," "Business Traveler" and "Luxury Affinity," according to a slide deck obtained by Valleywag in April.
Advertisers will not be able to use Foursquare data to target users on a one-to-one basis, Mr. Rosenblatt said. Rather, brands will only be able to identify groups of consumers who share certain characteristics, such as frequenting coffee shops.
Diageo and Foursquare said the ads will only be targeted at users who check in at locations likely patronized by people 21 or older (such as bars and nightclubs). But Captain Morgan is also targeting users who check in at restaurants, opening the possibility for minors to receive ads urging them to order a "Captain & Cola." Foursquare declined to comment on whether consumers who self-identify as younger than 21 years old will be entirely filtered out from receiving these ads. Foursquare's terms of service says users must be at least 13 and users can't change the date of birth on an account after initially signing up.
The Distilled Spirits Council of the United States (DISCUS) -- a "trade association representing the leading producers and marketers of distilled spirits" -- states in its media buying guidelines that alcohol brands should have a "reasonable expectation" that at least 71.6% of the target audience for an alcohol campaign is of legal drinking age (at least 21 years old). Diageo, Captain Morgan's parent company, is a DISCUS member.
Andrew Braunston, communications planning director at Captain Morgan's media buying agency Carat, said that more than 72% of Foursquare users are 21 are older based upon internal research, comScore analytics and Foursquare self-reported user base statistics. ComScore only collects data on Internet users who are 18 or older, but a comScore spokesman said it was unlikely teenagers would see such ads based upon available data.
Foursquare has been under pressure in recent months to earn enough revenue to justify a valuation that was once reported to be as high as $760 million. Despite skepticism about the company's future, smartphone usage is actually up from a year ago, according to comScore. Foursquare had more than six million monthly unique visitors via smartphones in May 2012. Usership reached a peak of 7.59 million monthly smartphone uniques in November before dropping to slighty more than seven million this May (the last month comScore data was available).
Engagement among Foursquare users has stayed steady over the past year, according to Onavo, with users typically opening the app 10 times per month.