As part of its efforts to generate new sources of revenue, Foursquare is working with ad-tech company Turn to allow advertisers to use its treasure-trove of location data to retarget Foursquare users on other websites, according to executives familiar with the situation.
Both Foursquare and Turn declined multiple requests to comment.
Under the partnership, advertisers use Turn to identify certain Foursquare users. After finding their desired Foursquare audience, advertisers can serve display and video ads to those Foursquare users' desktops, smartphones and tablets via Turn's ad exchange partners including Facebook Exchange.
Turn's website says the company "leverages data about previous online behaviors, so you can retarget customers you know are already interested." In terms of Foursquare data, this means targeting ads based upon which shops users checked in to and when. Foursquare's location data is not limited to the more than 3.5 billion check-ins conducted through its app to date, either. Foursquare also collects information from the more than 40,000 developers that have integrated Foursquare's location database into their apps, including popular mobile services Evernote, Instagram and Uber.
Foursquare has previously acknowledged that it intended to sell its data through other vendors, but declined to discuss partners. In an earlier interview, chief revenue officer Steven Rosenblatt said Foursquare won't allow advertisers to target consumers on a one-to-one basis. Rather, Foursquare is using check-in data to place users into different consumer segments such as "Mobile Mass Market Mom," "Business Traveler" and "Luxury Affinity," according to a document leaked to Valleywag in April.
Working with Turn gives Foursquare broader reach with its data and another revenue stream beyond its partnerships with businesses and serving ads within its own app. Turn has 16 display inventory partners, six video inventory partners, four mobile ad inventory partners and helps contextualize more than 50 billion advertising decisions per day, per its website. Turn will also let advertisers target Foursquare users in real-time via its partnerships with companies such as PubMatic. PubMatic's largest publishing partners include Business Insider, eBay, Hearst, Rodale, NBC News and Martha Stewart Living Omnimedia.
Real-time bidding (RTB) spending is predicted to grow from $1.4 billion in 2011 to $13.9 billion in 2016, according to an October 2012 IDC report sponsored by PubMatic. RTB's share of display ad spending is projected to increase from 5% to 20% over that time.
Location data is generally viewed as some of the most prized data for ad targeting, especially with the proliferation of media consumption on mobile devices. In a previous interview, Ken Allard, managing director of global business strategy at digital agency Huge, said Foursquare's "unique and proprietary data is incredibly valuable."
Alex Jacobs, VP-social marketing at Digitas San Francisco, said Foursquare users "are socially active and have a higher propensity to drive word-of-mouth."
An executive from a different data service company said prices for data typically range between $0.50 and $1.50 per thousand ad impressions served (CPM). Foursquare's data could fetch near the high end of that range considering agency executives' interest in it, per this exec.
However, Foursquare's reach among U.S. iPhone users has declined over the past year, according to mobile app research firm Onavo Insights. Last July, 5.5% of iPhone owners used Foursquare on a monthly basis. This June, it was 4.5%.
Foursquare began pitching digital agencies on using its data for retargeting purposes in April, marking the company's first attempt to generate revenue from ads served outside of its service. The slide deck Valleywag later obtained said retargeting would be available in May.
Foursquare's other sources of ad revenue are businesses promoting their locations within the Foursquare app and the newly available post-check-in ads. The company has also started branded promotions like its Game of Cones campaign (based on HBO's "Game of Thrones") and a Samsung-sponsored visualization of users' check-ins.
Hear from Fortune 500 brands that have been forced to pivot as consumer preferences evolve, as well as entrepreneurs building brands from scratch to meet new consumer needs. This event peels apart the layers of brand building with a carefully crafted roster of top marketing, technology, and creative leaders.Learn more