Foursquare is opening its promoted listings ads to all small businesses around the world.
The promoted listings show up in the app's Explore function, which consumers use to discover nearby restaurants, bars, parks or other attractions. If a Foursquare user searches for "burgers," for instance, then a nearby burger shop can bid to have its store listing shown in the search results.
Businesses are charged on a cost "per action" basis for these ads, meaning they only pay if a user taps on a promoted listing or checks in at the advertised location. Businesses can also choose if they want to promote a special offer, a user-generated tip about the location or just the store listing.
Pricing will differ based upon the nature of each business. Lower margin businesses such as coffee shops will typically bid between $1 and $3 to lure in a customer, whereas spas, high-end retailers and expensive restaurants may bid up to $7 on an individual Foursquare user, chief revenue officer Steven Rosenblatt said.
Foursquare started testing paid promotions with a handful of small businesses in New York City earlier this year and Mr. Rosenblatt said the company has been refining the service over the last several months.
Small business advertising is one of five revenue streams for the four-year-old company, which popularized the notion of the check-in but has yet to prove it can scale as a business. The others include national brands promoting nearby locations, ads served to customers after they check in at a location, selling users' location data via ad-tech company Turn and its pre-existing merchants services -- charging stores $20 to claim their location on the app and allowing them to offer in-app discounts to Visa, MasterCard and American Express users.