Foursquare gets down to business

Location-aware social site Foursquare is introducing tools that make it easier for businesses to target users. This is a smart business move.

Dave Rosenberg Co-founder, MuleSource
Dave Rosenberg has more than 15 years of technology and marketing experience that spans from Bell Labs to startup IPOs to open-source and cloud software companies. He is CEO and founder of Nodeable, co-founder of MuleSoft, and managing director for Hardy Way. He is an adviser to DataStax, IT Database, and Puppet Labs.
Dave Rosenberg
3 min read

For as far back as we've been discussing social networks, there have been question marks around the best ways to monetize users. To date, advertising has been the primary strategy, with virtual goods starting to pull in some serious revenues.

But the challenge with advertising is that users tend to ignore ads that are not highly targeted. Even precisely targeted ads are largely ignored, which is why you see more and more of them taking up screen real estate. This has also led to more sites adopting a "freemium" content model.

And targeting is even more of a challenge when users are mobile, but mobility also introduces a whole new way to interact with and monetize users.

One of the more interesting companies in the location-based services (LBS) space is Foursquare. Surely, you've seen some message in your Twitter stream telling you that your friend is at some location or is the mayor of whatever, or has unlocked a badge.

And while Foursquare has nowhere near the user base of Facebook or Twitter, the users are very valuable as they promote the places they go and things they do simply by mentioning them in their communication stream.

According to The New York Times, Foursquare plans to distribute a new analytics tool and dashboard in the coming weeks that will give business owners access to a range of information and statistics about visitors to their establishments. This means that businesses can more effectively target users with specific offers and ads.

But what it really provides is a way for Foursquare and other location-aware services to make money.

Going back to 2001, I remember talking about location-based services while working at OmniSky, a way-too-early provider of hardware and software that turned handheld devices like the Palm V into mobile devices. We even acquired an Israeli company called NomadIQ to deliver location-based content.

Ten years later we're just starting to see location-based offers roll out in the U.S.--better late than never?

Many of the early international LBS were very basic social networks (primarily dating) and the demand for such services in the U.S. simply wasn't there, partially because of social mores and also partially because mobile devices have evolved fairly dramatically.

I try out pretty much every social network/game/whatever both for research purposes (as well as looking for any way to distract myself from doing any kind of real work.) However, the location-based stuff like Foursquare hasn't been particularly appealing for a number of reasons:

  • Privacy--do I really need the whole world to know exactly where I am and what I'm doing. It's one thing on Twitter where you control the message, but with Foursquare you are broadcasting your location to the world.
  • Social network--most of my friends are on Facebook and Twitter and that's more than enough. I don't bother with Facebook, both because I don't like the user experience and because I have no compulsion to overshare.
  • Social overload--for better or worse, I've committed to Twitter as my short communications platform.

If I were a business customer, I would like to see a self-service function that allows me to quickly set up new offers and targets.

From the Times article:

"If I'm in another location, I can actually sit and look at that screen and see who checked in last, and I can reach out via Twitter and say 'Welcome. Have you been here before? What kind of food do you like?'" said Mr. Sorge, "It makes the experience more enjoyable for the customer."

As a business owner it's great to see the stats, but there should be more obvious actions than sending someone a message on Twitter. Owners should be able to fill out a Web form or something that allows them to send an offer that can be actionable and tracked across the users' series of events.

The Foursquare business service can be an excellent way to target users, provided they make it incredibly easy for businesses to create actionable offers, not just send a message.