People who tap on the ad -- which will be shown to Foursquare
users nationwide -- will be taken to a page listing nearby
restaurants that accept MasterCard. (The credit card company is
currently donating a penny to cancer research when cardholders
spend $10 or more on meals.)
For Foursquare, opening up the ad placement looks like an effort
to entice larger brands who didn't have a use case for marketing on
the app when its ad offering was aimed at restaurants and
The company made another stride in that direction this summer when
it introduced ads that appear after a user checks in at a location.
Captain Morgan was one of the early brands on board with ads that
that users who had checked in at certain bars, clubs and
restaurants order a drink like a "Captain and cola."
Other brands to have tried post check-in ads are Oreo and
Samsung. Foursquare's chief
revenue officer Steven Rosenblatt said that the majority of the
revenue the company has generated from non-merchant advertisers has
so far been from that placement, though it's also done some data
deals. (Ad Age previously reported that Foursquare was working with
the ad-tech company Turn to
mine its location-based data sets and let advertisers retarget
its users on the web and on mobile devices.)
The upside for Foursquare in opening up its home screen to more
types of advertisers is that it's the most visible real estate
within the app, which presumably makes it more valuable.
Advertisers pay Foursquare on a cost-per-action basis -- when a
user taps on the ad, for example -- not at the impression
Mr. Rosenblatt said that ads on the home screen -- which debuted
in May -- have fetched higher prices than other Foursquare
inventory. The company's original ad unit that debuted in the
summer of 2012 was promoted updates that appear in the "Explore"
tab where a user can search for nearby specials and popular
"People are willing to pay more because they see great results
from it," he said.
What about scale?
Foursquare won't disclose its revenue, but a recent back-of-the-envelope
calculation by Fast Company projected that it would bring in
between $15 million and $20 million this year, up from $2 million
What's also unknown is how many active users Foursquare actually
has. It reports that it has 40 million registered users but doesn't
disclose how many of them use the service on a monthly basis, which
is the usage standard that both Facebook and Twitter employ.
MasterCard's VP-digital marketing JR Badian observed that the
reach of home screen ads -- which should be seen by a large portion
of Foursquare's U.S. user base for the current campaign -- is
compelling. The company previously bought post check-in ads for a
campaign this summer and saw high click-through rates; it's using
them again in tandem with the home screen placement.
"We think [Foursquare] is pretty powerful even if the audience
is smaller than some of the other social networks," he said.