The Future of Foursquare: Understanding Location-Based Marketing

Foursquare 3 small At SXSW Interactive, Foursquare founder Dennis Crowley and Mashable founder Pete Cashmore took the stage for an interview about the future and evolution of location-based social network Foursquare.

During the interview Crowley announced that the service was going to expand its venue API and is working to create a standard for venue identification numbers. Crowley also elaborated on the recent launch of Foursquare's 3.0 version. This new version, he said, is all about recommendations and resurfacing user data to help improve serendipity for users. 

Creating Serendipitous Experiences

The new app adds an Explore tab which is Foursquare's first attempt at becoming a true recommendation engine. The addition of that feature throws Foursquare into the competitive land dominated by Yelp, Google and Facebook. In a year, Crowley stated, Foursquare should be a tool that knows what people like and recommends new things for them to do.

Crowley is working on partnerships and not looking to sell the 50-person company at this point. He explained that 250,000 businesses use Foursquare and the company will be charging businesses for some advanced marketing opportunities. While Crowley isn't planning on including ads in Foursquare, he did not completely rule out the possibility.

Prompting People to Be Proactive

Foursquare proactive notifications is something else Crowley would like to build. When a user walks by a coffee shop, for instance, they would receive a notification that a friend visits that shop often and recommends it. Foursquare would also be looking at new technologies like NFC that will help users checkin to locations more easily in the future.

Marketing Takeaway

Location-based marketing can be a valuable customer aquisition and retention tool for brick-and-mortar businesses. Many Web platforms will be competing to offer services bridging the gap between online and offline marketing efforts. With fewer than 8 million users, Foursquare is fighting an uphill battle against some of the Internet's most successful companies.

As a business with a retail location, you should claim your business on location-based networks like Foursquare and test out some of their marketing features to see if it impacts foot traffic into your business. After this type of testing, you can determine if a bigger time and monetary investment is needed. If you don't have a physical location, it is probably best to monitor the changing opportunities in the location-based marketing industry while investing time and resources into tactics that are currently a better fit for driving results for your business.

Do you like the direction Foursquare is going with version 3.0?