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Foursquare, Swarm and the Future of Location-Based Personalization

in Mobile Marketing, Social Media with tags , , , Both comments and trackbacks are closed.

Most of us in the digital space are familiar with Foursquare, the location-based app launched in 2009 to allow users to easily meet up with friends and discover great places. Foursquare’s user base of more than 50 million people has generated more than 6 billion check-ins – with 2 million businesses leveraging the Merchant Platform (stats via Foursquare).

Over the years, Foursquare has been commonly referred to as a “check-in” app, as critics have pointed out that the platform’s capacity has failed to evolve beyond encouraging people to check into the locations they visit. In response, the company unveiled a restructure in May, which involves splitting the current platform in two: Foursquare (focused on discovery) and Swarm (focused on socializing).

GIF via Tumblr

Breaking apps into smaller components is not an entirely new move in the industry, as users are accustomed to opening multiple apps for specific uses, and would prefer to leverage several faster, sleeker apps that achieve a single function versus one giant app that tries to be everything to everyone. Moving forward, Foursquare will be used to explore locations within a user’s area; Swarm will allow users to easily see which of their friends are nearby to meet up.

The new Foursquare & the debut of Swarm

As Foursquare as we know it splits in two, the “check-in” button will soon disappear altogether – but users will still be able to explore the areas around them thanks to Foursquare’s predictive intelligence technology, called Pilgrim. For example, if someone walks into four different Chinese restaurants, Pilgrim will enable Foursquare to understand their movements to make recommendations based on this data without the user actively checking in.

The ability of Foursquare to track location without requiring a formal check-in can be viewed as passive sharing. Swarm, Foursquare’s social utility spin-off, embraces this same form of ambient sharing, as Foursquare believes that while people might not want to share their exact location, they would likely be more comfortable sharing their neighborhood, or knowing that their friends are a certain distance away.

Marketer implications

While much of the buzz has focused on Foursquare’s structural changes and the introduction of Swarm, brands will be most interested in what all this means for their location-based advertising efforts. The short of it is that marketers can expect new local search targeting options from Foursquare.

Foursquare has emerged as one of the best options for marketers looking to reach people based on their local preferences – and local search isn’t going away anytime soon. In fact, a recent comScore study found that 56 percent of local-mobile searches have local intent. Combining what we know about Foursquare’s ad platform with an anticipated boom in ambient location shares via both Foursquare and Swarm, one might speculate that the company has made these changes to strengthen their foothold in the location-based advertising space. And while Foursquare hasn’t formally unveiled any new ad products or features yet, we anticipate that their ad platform will evolve as the app changes take hold.

Here’s a real world scenario that illustrates this point: Just yesterday for lunch, I checked into a local sushi restaurant on Foursquare and the venue offered free edamame with my check-in – but the freebie was not what drove me to this restaurant, as I didn’t know there was a deal until I was already seated. One might argue that the restaurant didn’t even need to offer this promotion, since at that point I was already a customer.

But what if an advertiser knew that I frequented sushi restaurants for lunch (along with a few friends), and could take action before I even considered choosing a venue? It’s easy to consider the opportunities that open up when marketers are able to target users (and their friends, too) with relevant deals and group incentives. Perhaps in this case, the restaurant could have pushed a late-morning message to me and my friends that said, “Up for sushi with your pals today? Come back and receive free edamame for the table.”

Of course, the success of these types of targeted campaigns will depend on user behavior – how people take to the passive location sharing, and how many users Foursquare/Swarm are able to maintain and amass. That said, the latest Foursquare update has the potential to unlock exciting new advertising opportunities for marketers who promote brick-and-mortar locations in key markets.

Given the launch of the new app and how the industry is moving towards location-based personalization, it will be interesting to see how big Foursquare’s impact will be relative to bigger players (e.g. Google) in the coming months/years.

Cover photo via SlashGear.