Catching Up On Foursquare: Monetization & The Powered by Strategy

Posted by Brandify Team on Mar 28, 2014 1:39:56 AM

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We write about Foursquare a lot on this blog. Not just because we have a working partnership with Foursquare which allows us to ensure for our clients that the Where 2 Get It platform is effectively integrated with Foursquare’s merchant tools. Rather, we write about Foursquare quite a bit because we believe Foursquare represents a valuable location powered experience for both consumers and businesses.

For the consumer, Foursquare provides a powerful, socially integrated local search and discovery service; for the local business, it equips owners (or marketers, as it were) with a robust, feature-rich technology capable of location-based targeting.

Last Fall, we published a three part blog series on Foursquare which highlighted two aspects of this unique Foursquare experience. First, we discussed many of Foursquare’s monetization tools. Second, we highlighted the “Powered by Foursquare” strategy and discussed it’s potential to capture immense value from the network of apps that connect to its data.

This week, two stories have emerged that warrant revisiting the two topics above mentioned.

Tap to Tweet Foursquare Ads

First, regarding monetization, Foursquare announced the release of a new ad unit called Tap to Tweet which attempts to leverage the power of the Twittersphere by creating a tweetable version of the post check-in ad which is already being served to Foursquare users.

What’s more, the Tap to Tweet concept also taps into the idea of social influence and influencer marketing, something we’ve written about recently as well. In other words, “Tap to Tweet capitalizes on the desire for marketers to enlist influential social media voices to spread their messages.”

While several have tried, no one has been able to figure out how to successfully monetize the influencer marketing model yet. If the initial reactions from the tech media are any indication (see tweets below), Foursquare has a tough road ahead if it expects its users help their monetization efforts with Tap to Tweet.

 

“Powered by Foursquare” In Jeopardy?

Austin Carr of Fast Company published a story earlier this week reporting that some Instagram users have noticed a change in the location-tagging feature within the Facebook owned photo-sharing app. One Instagram user took to Twitter with his discovery tweeting "Wait, did Facebook just secretly stop using Foursquare's API for location services on Instagram and replace it with their mapping service?"

Carr explains:

“Recently, however, Instagram has started toying with the idea of replacing Foursquare's integration with Facebook Places. As some Instagram users have noticed, Instagram has updated its app for a subset of its shutterbugs so that it now uses Facebook's Places' database instead of Foursquare's.”

While a spokesperson for Instagram reassured "Foursquare is a great partner," and that users "will continue to be able to share their check-ins to Foursquare from Instagram," it’s interesting to play this scenario through in your mind.

Instagram only represents one of a long list of apps that integrate with Foursquare’s API. Some of the other third-party services that use Foursquares expansive database of restaurants, bars, coffee shops and other places to power their location services include: Path, Uber, Twitter’s Vine and most recently Pinterest.

We’ve posed the question before: Through the power of “Powered by Foursquare,” has Foursquare found a way around the need for reaching critical mass in terms of monthly active users in order to attain a meaningful revenue model?

If “Powered by Foursquare” were to fall out of favor with app developers and emerging platforms looking to integrate a location layer into their services, a move away from “Powered by Foursquare” could spell big trouble for the yet to be profitable 5-year-old location service provider.

Luckily, it appears Foursquare has enough of a headstart with regards to its massive collection of socially informed location data that this type of move doesn’t seem to be a likely scenario any time soon.

Topics: Local Marketing, Foursquare, Social Media, Local SEO, Mobile