Other pilot advertisers include Gap, Hilton, New York cupcake store
Butter Lane, the Standard Miami hotel (pictured right), BR Guest,
Batali Group, JC Penney,
'Wichcraft, Best Buy, Hertz, Walgreens, Macy's and Dave &
Not all Foursquare users will see an ad if they open Explore,
however. According to Noah Weiss, the Foursquare product manager
who oversees merchant-facing tools, "promoted updates" are still
being served to users based on relevancy. For example, a Dunkin'
Donuts update might be more likely to appear in the morning, and a
Hertz update would be more likely to crop up after a user checks in
at an airport.
"We think about these as Google search ads for real world
places, so the relevancy is really important," said Mr. Weiss, an
ex-Googler on the search-quality team.
Foursquare declined to discuss details about pricing, but
merchants will be charged on a cost-per-action model and not by
impression volume, according to Steven Rosenblatt, Foursquare's
chief revenue officer,
who stepped into his role in May. The participants in the pilot
group who will be testing the ads over the next few months will pay
based on engagements like check-ins, unlocked specials, likes of a
brand and likes of an offer that result from a promoted update, he
"One of the things we're going to be experimenting with is : How
do people want to be paying for this?" Mr. Rosenblatt said.
Macy's is one brand that 's looking at Foursquare as a
compelling testing ground to search for new customers who might be
missing its ads on TV and in print. According to Jennifer Kasper,
group VP-digital media and multicultural marketing, the plan is to
experiment with "promoted updates" in the third quarter in order to
gauge their effectiveness for the crucial fourth quarter.
The intention for the launch is to push out national Labor Day
offers that can then be served to Foursquare users who are near a
store. The particular goal is to spur more check-ins from women
between the ages of 18 and 30, she said.
"We will be looking with great curiosity at how millennials
respond in particular," said Ms. Kasper, who characterized the
Foursquare investment as a "test -and-learn" budget. She also noted
that Macy's is testing Facebook "offers" (using a mix of
organically posted stories and ads to amplify their reach) and the
location-based shopping app Shopkick, which was rolled out
nationally at Macy's stores last week.
Foursquare has 20 million users as of the last official
reporting, but the company declined to say how many are actively
using the Explore feature, which is central to its effort to cast
itself as a recommendation engine that can help users make smart
decisions about where to go based on its billions of data points
about user activity.
Explore was given more prominent real estate in the June
redesign of the app and enhanced functionality, such as the ability
to automatically suggest locations without the user needing to
search for a category like "seafood." According to Mr. Weiss, use
of Explore has more than doubled since the redesign went live.