Advertisers are lining up to become a part of Foursquare’s developing mobile-ad business, the only problem is that the startup is having trouble keeping up with the demand.
Even Foursquare itself is surprised the service has caught on as quickly as it has, and the inherent growing pains of a fast moving startup are beginning to take hold. The ecosystem that’s evolving around the service is growing by leaps and bounds, and advertisers have seized on the model as a way to serve up location-based ads and special offers, without annoying mobile users.
Upon launching its “Local Business Dashboard,” which allows local businesses to sign-up and launch offers and promotions to take full advantage of the potential, Foursquare has been bombarded with local businesses wanting a piece of the pie.
“Foursquare’s funnel is overflowing now. They’ve got so many people that want to work with them that they can’t handle it all,” said Michael Schneider, vice president at ad agency Allen & Gerritsen Inc. “We’re kind of stuck with the vanilla experience of go to the site and fill out a form.”
Advertisers aren’t the only ones that want in on the Foursquare craze. The site’s Web traffic quadrupled in the first quarter of 2010, to 2.1 million unique visitors monthly. With a $1.4 million Series A round of venture capital in its pocket, Foursquare last week reportedly turned down an acquisition offer of more than $100 million from Yahoo.
The folks at Foursquare are likely beginning to realize what they’ve stumbled upon- which is a solid foundation to pioneer the concept of location-based mobile advertising, combined with integrated social networking and mobile apps. Though that wasn’t the initial goal of the startup, the evolution has begun and will likely pave the way to Foursquare being a massive player in the mobile-ad game very quickly.
Location has long been regarded as the “holy-grail” of mobile advertising. Finding effective ways to incorporate location for increased relevance and targeting will do wonders for the advancement of the industry, and Foursquare is currently in the best position to make it happen.