The updates, which have been in testing with select advertisers since July 25, offer a way for businesses to reach out to potential customers via foursquare’s Explore screen. They put a business’ message in front of foursquare users who are likely to visit (based on foursquare’s Explore algorithm) at precisely the time they’re looking for somewhere to go. As such, they’re offered on a pay per action model, with advertisers being charged when users either click through an ad or check in to the business within 72 hours.
Promoted updates complement foursquare’s free local updates product, which are geared toward reaching out to existing customers who are already familiar with a business. Users must have previously liked a business or checked in the multiple times to receive local updates.
With promoted updates, advertisers will have a unique opportunity to reach out to local customers at exactly the critical moment when they’re deciding where to go. There’s no requirement that these customers have previously liked a page on Facebook or followed a Twitter account, only that they be near a business and likely to visit it based on their (and their friends’) check-in history. It should prove to be a desirable product for retailers and restaurants alike, and as foursquare’s first true revenue-generating product actually has the potential to make the company profitable.
Will your company advertise via promoted updates when they become available? As a user, are you annoyed when they appear in your Explore screen?