July 25, 2012, 2:24 PM

Location, location, location: Foursquare debuts paid search ads

Merchants can reach Foursquare users with ads related to consumers’ locations.

Lead Photo

Foursquare, a mobile check-in app that consumers use to let friends know where they are, today introduced an advertising platform. It enables retailers to target app users with ads related to where they are and what they or their friends have indicated they’ve liked.

Called “Promoted Updates,” the ads appear when consumers use the app’s “explore” function, which is akin to a web search, Foursquare says, for example, if a consumer searches for blouses, she may see a Promoted Update in the results from an apparel retailer nearby her location about a weekend sale. Foursquare does not say exactly how close a consumer must be to a store to see an ad, but says consumers will see ads only from businesses “when they’re close enough to actually stop by.” Ads may include a picture of the retail store, an offer and the pictures of friends who have previously checked into that store.

Foursquare declines to reveal the pricing model it is using for the ads.

Foursquare says it applies the same algorithm it uses to show consumers the most relevant updates from their circle of friends to Promoted Updates. “We’ve spent a lot of time designing this so you’ll never see a promoted update from a place that the Explore algorithm wouldn’t recommend for you,” the company says in a blog post introducing the service.

Foursquare says more than 20 retailers have signed on to try the ad platform, including Best Buy Co., JC Penney Co. Inc., Walgreen Co., and Lowe’s Cos. Inc. Best Buy is No. 11 in Internet Retailer’s Top 500 Guide, JC Penney No. 20, Walgreen No. 33 and Lowe’s No. 47.

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