Foursquare hopes to launch paid search during the next two months. Merchants will be able to promote check-in deals on the platform when users search for local specials, employing the same algorithms currently used on the app's "Explore" tab.
ClickZ has confirmed the news, first reported by Advertising Age, with two sources close to the situation. One was Walgreens social media director Adam Kmiec, who has spoken with Foursquare about its future plans.
"We are interested in any way we can make our customers more aware of our specials," Kmiec said. "We also think it shows that Foursquare is maturing as an organization."
Up until this development, Foursquare mobile app searches have produced organic results. The same has been true when users tap "Explore" and then hit a "Specials" button before seeing local merchant specials on Foursquare, as well as syndicated deals from Groupon, LivingSocial, Gilt City, ScoutMob, etc. Sometime during June, sponsored results will begin appearing in both cases.
Foursquare is evidently collaborating with past brand partners to create the paid ads platform. During the last two years, it has worked with names like Walgreens, Pepsi, Dunkin' Donuts, Whole Foods, and Radio Shack.
Former Apple iAd sales director Steven Rosenblatt has been assisting Foursquare with ad products development since January when he left the tech giant. His role with the geo-social app may shed some light not only into why Foursquare is ready to launch its paid search/discovery platform, but also into what its ads may look like.
"Steven has been working closely with our internal monetization team as an advisor," Erin Gleason, Foursquare rep, told ClickZ via an email, adding that the relationship began several months ago.
Rob Reed, CEO of local-social marketing provider MomentFeed, said Rosenblatt could be a big asset to Foursquare because specials on the app platform "are also full-screen smart phone experiences, not unlike iAds, and there is plenty of room to innovate with scannable barcodes, dynamic targeting, and point-of-sale integration… Foursquare can drive sales, and that's ultimately what marketers want."
From a longer view, it's the latest business-minded step for Foursquare, which has 20 million usersand aspires to be a local marketing platform worldwide. Last August, the three-year-old companyreleased Pages, a free-to-use self-service platform for business pages. The pages product is available to marketers in 11 languages.
The paid ads development isn't necessarily unchartered territory for the geo-social brand. Nine months ago, ClickZ learned Foursquare was selling custom badges to brands on its platform starting at $75,000. And its mobile distribution deal with the aforementioned daily deals players was unveiled last August. It's been assumed by industry watchers that Foursquare has been getting a sales cut for the converted referrals it dishes out to Groupon, LivingSocial, and others.