Foursquare takes a dip in the ad pool

Robin Hassan at Starcom and Ian Giles at MediaCom speak to MiC about the impact that the social networking app's new advertising program will have on the Canadian market.

Foursquare has taken steps toward monetizing its location-based application. Having introduced a pilot advertising program called “promoted updates,” Ad Week reports that it’s working closely with agencies in the US to help get it off the ground.

The announcement came shortly after the publisher announced its “local updates,” whereby news of specials and promotions from the places they frequent are updated in the user’s newsfeed. The “promoted updates” are similar in nature, except they are sponsored and will show up whether or not the user has visited the business.

According to Foursquare’s blog, the ads work similar to those on Google, where a word search (for example “shopping near Soho”) on the app will result in relevant ads appearing on the screen. So far there are 20 pilot partners using the ad unit including Old Navy, Best Buy, Walgreens and Lowe’s.

What started out as a social reward app has progressively evolved into a business directory that mirrors applications like the Yellow Pages and Yelp.

But have Canadians taken to the social networking app and will the changing model have a real impact in the market? There aren’t many measurement options available to detail Canadian adoption of the location-based app, Robin Hassan, VP, digital, social and mobile COE lead, Starcom tells MiC. ComScore provides a limited description of users, she says, which  is strictly recall survey data. ComScore numbers provided by Hassan for March 2012 show that Foursquare traffic (164,000 check-ins) is far less than Facebook Places (2.1 million check-ins) in Canada.

“The issue for large brands is going to be both volume and voice,” notes Hassan. “Volume because the reach of Foursquare in Canada today is still very small, but certainly growing fast. In terms of voice, the power of using social networks is in ensuring the retail experience is seamless to the consumer.”

Ian Giles, director of social strategy, MediaCom concurs with what Hassan says about Foursquare’s low reach in Canada, debating whether or not people will actually check-in for an offer. “There aren’t many case studies to make the argument that it’s worth trying it,” says Giles. “I’ve tried to pitch Foursquare campaigns for years now but haven’t found a client willing to try it. I personally use Foursquare daily, but I rarely use the Explore feature. [And] I rarely see Foursquare ‘check-in here’ stickers in retail windows.”

Giles doesn’t see Foursquare becoming a serious part of brands’ overall marketing tactics, saying that the new advertising opportunity will have little to no impact on Canadian business purely because “our retailers and businesses have a long way to go to catch up to our American counterparts.”

“Many already do ask for your location, but most people don’t allow them to track where they are,” he adds. “Location-based offers need to become more mainstream and people’s behaviour needs to change before it will get traction.”

Consumer behaviour and reach aside, Hassan believes the application has effectively given small businesses a way to create an “in-person dialogue to close the loop in-store” and that the new advertising will, mostly for larger brands, be a “huge opportunity to test and develop infrastructure to support a full experience that is focused on the consumer experience.”