Foursquare has come a long way from its early days as a social “check-in” app. Along the way, the company repositioned its app as a Yelp competitor; now the company is substantially focused on “place insights” and “location intelligence” for enterprises.
Earlier this year, Foursquare introduced its advertising platform, “Pinpoint.” Foursquare works directly with advertisers and makes media buys through exchanges (on both the desktop and mobile) and then measures offline actions (e.g., store visits) after ad exposures. This model is radically different from selling ads to local restaurants and bars — even check-in ads to brands — which is where the company began.
Foursquare is also making money off location-data licensing. This is not just business listings data but audience data based on real world store visitations and movements. It’s selling that data to hedge funds, commercial real-estate interests, banks and others.
For example, banks can use the data to determine business credit-worthiness based on foot traffic patterns. The company used the same type of location analytics to correctly predict the success of the iPhone 6s launch. Revenue and sales prediction capabilities like this have piqued the interest of investors.
I spoke with Foursquare CEO Dennis Crowley last week about the company’s evolution. There are a range of mobile marketing providers and platforms now using location data and location history for ad targeting and location analytics. I asked him what differentiated what Foursquare was doing from the myriad other companies doing similar things.
The outspoken Crowley said that Foursquare’s data is much more accurate than its competitors’ because the company has first-party data from 50+ million global users, whereas most of the location data many of Foursquare’s mobile marketing “location intelligence” platform competitors rely on comes from ad calls, which are often inaccurate.
“We do this better than anybody else,” says Crowley.
Crowley argues, “Everyone is drafting off someone else’s data,” except Foursquare. In fact, Foursquare isn’t the only location targeting platform with first-party data (YP and UberMedia have first-party location data, for example), but it has a larger dataset than others.
Foursquare has developed a “couple thousand” audience segments that marketers can use to target ads via the exchanges, says Crowley. As mentioned, Foursquare also provides location/offline attribution on those ads — even if they’re shown on PCs. However the company disregards and discards “about 80 percent of the location data” it sees from exchanges because of inaccuracy and poor quality.
Crowley asserts that many mobile marketing companies are unable to disambiguate business locations in malls or areas of high population density (e.g., urban centers). “We’ve spent years figuring out where people are; and we can do this quickly at a high degree of precision and speed.”
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