On stage at TechCrunch Disrupt earlier today (RIP, Sam Biddle's press credentials!) Foursquare CEO Dennis Crowley acknowledged the haters, before offering a confident dismissal: "I think there are a lot of people that think we don’t know how to generate revenue, that we aren’t generating revenue. This is wrong," he said. An internal Foursquare document obtained by Valleywag shows some of the new ways Foursquare is trying to make money: Tell advertisers where you've been.
Part of the reason Crowley might be feeling so self-possessed, even after he was forced to take on $41 million in debt rather than lower Foursquare's $760 million valuation, might be because the company is exploring new ways of generating revenue off of your personal data, first noted by AdAge.
We got a copy of the presentation Foursquare has been showing advertisers, which touts two new ad products still in beta.
1. Check-in Retargeting
This product will let advertisers target users online—outside of the Foursquare app—based on where they check-in in real life. In other words, your check-ins might come back to haunt you on the web.
The idea of targeting online ads based on offline behavior has become increasingly popular. Budgets for "retargeting" are growing, even as critics say the system is broken. Earlier this year, Facebook announced partnerships with powerful third-party data marketers so that advertisers could target Facebook users based on where they spend their month offline.
They include Acxiom, which aggregates data from a variety of sources, including financial services companies, court records and federal government documents; Datalogix, which claims to have a database on the spending habits of more than 100 million Americans in categories like fine jewelry, cough medicine and college tuition; and Epsilon, which also collects transaction data from retailers.
(Some of those companies are currently being investigated by the Federal Trade Commission.)
Foursquare claims they can segment users by age and gender, drilling down to categories like Mobile Mass Market Mom (attention purveyors of mom jeans!) and Luxury Affinity ("They like the finer things & have money to spend on fun," i.e. startup founders.) That product is launching in beta in May and Foursquare is asking for a $50,000 commitment for a six-week program.
2. Post Check-In Ads
The other new ad product, available in June, is less of a leap in terms of using your data. It lets advertisers show a "contextually relevant" ad after you've checked in. The example in the deck is a Stoli ad showing up after someone's checked in to Sweet and Vicious. To be honest, if you're checking-in to Sweet and Vicious, an ad for NJ Transit might be more appropriate.
I think there’s a lot of people that still think of us as the 2009 Foursquare, with points and badges. We still have those things, but the biggest haters are the same people who haven’t opened the app in 6 months. The stuff we’re doing now — [the social algorithms, the predictive functionality] — it’s rocket science.
But it's hard to silence critics in the same breath that you admit users have stopped opening the app because they gave up on an earlier version. After all, at $50k a pop, you're gonna need to keep those check-ins coming to get close to $760 million.
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