So, what’s foursquare’s latest plan for monetization? CEO Dennis Crowley tells the Wall Street Journal that it’s personalized coupons, coming in an update this July.
According to the Journal, foursquare plans to:
let merchants buy special placement for promotions of personalized local offers in July in a redesigned version of its app. All users will be able to see the specials, but must check into the venue to redeem them.
Later in the interview, Crowley goes on to say:
The question [merchants] always ask us: How do we act on these different groups? They always want to target specific segments of those customers, whether they are new, repeat or lapsed customers. That is one thing we are getting pretty good at being able to segment out.
Tying these two statements together, it appears the personalized offers foursquare is rolling out will be targeted to different types of customers based on their history. One user who visits a place regularly might receive an offer designed to keep them coming back, while a user who no longer visits an establishment might receive a better, more lucrative offer designed to lure them back in. Others could potentially be targeted based on demographics, much as Facebook allows with their advertising.
Merchants are, of course, more willing to pay for targeted advertising than they are the general offers foursquare offers for free today, making this foursquare’s first real attempt at monetization of the platform. When asked if the company needs to raise more money, Crowley replied:
It’s a little too early to tell. We are in a pretty strong capital position. We are actively experimenting with different ways of monetizing our data and a lot of the relationships we have with merchants. We’re due for a few more quarters of experimentation before we have to make a call on that. But I am pretty optimistic about our chances.
Indeed, time will tell if these new personalized offers work to woo in paying advertisers and merchants. Foursquare isn’t the first social network to incur monetization struggles and it won’t be the last. The data they’ve collected about the real world preferences and habits of their users, though, puts them in an enviable position as long as they can find a way to make it work for advertisers.