July 19, 2012, 10:50 AM

Is foursquare checking into advertising?

The check-in app is adding business updates from the places app users frequent.

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Mobile check-in app foursquare is adding a feature that could open the door to ad revenue. Consumers will now see updates within foursquare from the places where they frequently check in, foursquare has announced in a blog post.

“Starting today, you’ll start seeing updates in your friends tab from the places where you’re a loyal customer,” the post reads. “It’s an easy way to keep up with news from places you frequent, including things like new specials, pictures of the latest shipment of shoes, or a serendipitous food truck appearance. The best part is there’s no extra work for you to do: we already know you care about a place if you’ve checked in often or liked it, and will show you updates from it when you’re in the same city.”

Consumers can turn off the updates if they choose, foursquare adds. Foursquare users also will see updates on business’ foursquare pages when they check in or search for a specific shop or restaurant in the app and land on a shop’s foursquare page.

“For example, when you’re on Northern Spy Food Co.’s page, you’ll see their recent update about their latest seasonal drink,” the blog reads.

The service is free for now and several national chains including H&M and Outback Steakhouse are participating. The service will be available to all businesses later this week.

The news follows earlier rumors that foursquare would start selling ads to businesses this summer to generate income. Analysts say the platform could be an effective advertising opportunity for bricks-and-mortar merchants and will likely compete with Google’s mobile ads. Google has said in the past that it sees great revenue potential in mobile advertising.

Brian Klais, founder and president of Pure Oxygen Labs, says a foursquare paid media platform will likely compete with Google's local Maps and Places ads. “The difference I see is that consumer usage of Google’s services tend to be search-driven which limits reach, where foursquare's highly social use-case gives foursquare a unique opportunity to drive broader mobile local discovery,” Klais said earlier this year commenting on the advertising speculation.

It’s hardly shocking that foursquare is trying to find a way to make money. The app,  while popular with consumers and businesses, has yet to find ways to generate significant income.

“I think it's a smart move although not really surprising as foursquare matures and looks to monetize demand for local specials, particularly among mobile users,” Klais says.  “Currently, the listings you see on the foursquare app when exploring local specials are driven by popularity or by your friends, kind of like organic search results.”

For merchants, a foursquare ad platform has the potential to drive more traffic into stores and increase sales, says David Eads, CEO of Mobile Strategy Partners, an m-commerce consulting firm. More than 20 million consumers use foursquare, the company says, and have checked in to 750,000 businesses more than 2 billion times since the company’s launch in March of 2009.

 “The holy grail of mobile advertising is getting relevant offers to consumers with intent to purchase when they're in exactly the right location at the right time” Eads says. “This brings this a step closer.”

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