Two billion check-ins. Twenty million users. These are incredible figures for any company, let alone one that is only three years old. And while foursquare boasts staggering counting numbers, the only numbers that matter to investors – who recently provided $50M in additional funding – are revenue and profit figures. In a recent interview with the Wall Street Journal foursquare founder Dennis Crowley touched upon some of the ever-present questions on foursquare’s ability to monetize:
“The company, which lets users alert their friends to their location by “checking in” via smartphone from coffee shops, bars and other locations, revealed for the first time that it plans to let merchants buy special placement for promotions of personalized local offers in July in a redesigned version of its app. All users will be able to see the specials, but must check into the venue to redeem them.”
Couponing within foursquare’s app is an evolution of foursquare’s partnership with American Express to deliver discounts and check-in specials to cardholders. While the program has been a success so far, it has been limited to a few partners. The new couponing system will be automated by vendors who, in turn, will pay for the visibility within foursquare’s walls. As Crowley noted, foursquare may be achieving its goal of “connecting people with places and places with people.”
A great deal of the move’s success hinges on foursquare’s recent addition to its app, the ‘Explore’ tab. The Explore Tab, unlike other recommendation and review portals (Google Places, Yelp), utilizes an algorithm based on total popularity, friends’ check-ins and personal check-in history to deliver personalized recommendations. foursquare’s move from a check-in app with badges to a legitimate discovery powerhouse ultimately made this move possible. The move also signals the continued evolution of mobile as a source of revenue. The stats speak for themself:
- Nearly half of all online consumers in the US will redeem digital coupons online or in a store (eMarketer)
- $2.37 billion of mobile coupon transactions will take place in North America in 2013, up from $5 million in 2010 (Yankee Group)
- One in Ten Mobile Users Redeem Coupons (eMarketer)
Apps like Path, Instagram, and foursquare have been ultra successful without a desktop presence. Yesterday Google quietly integrated Google Offers across its ‘Maps’ for Android product. Mobile gaming, shopping, and consumption are all on the rise with no sign of decline in sight.