Social Media Paid Ads
Think about a local cafe you’ve ordered from, imagine you work for them; its a highly competitive industry, you have been asked to look into social media advertising, but you don’t know where to start.
Introducing Foursquare, a social media application that allows users to locate local businesses and post geographically where they are situated for their social friends to see. Foursquare announced recently that they are about to test 800 businesses with self-service paid ads. The idea is to function much like Google Adwords where the business can ‘bid’ for how much they want to spend on their ad (minimum $50 per month); which will determine where the ad will be ranked. The self-service ads target consumers through their geography settings, called geo-targeting. The app primarily assists in promoting local businesses, by creating awareness of the business and recommendations from other users. Although how does Foursquare’s ad potential compare to other social media sites?
E-Marketer estimates in the table below that Facebook will earn over $6 billion (2013) in Ad spending, compared to Twitter with close to $600 million. Foursquare unfortunately does not receive a mention in this table, although it will be interesting to see in the following years if their new paid ads will contribute on a competitive level in social media.
Secondly a survey completed by STRATA, a software company, concluded that 90% of Agency Executives were more likely to use Facebook for brand promotion. Comparing this to Foursquare, with 8% of executives stating that they would be likely to use this platform.
However the data presented does not segment what type of industries and markets are most likely to use which social media site. Even though Foursquare has only 8% interest, this could be mostly local companies that can benefit from reaching the consumer on a different level such as local restaurant promotions. The application allows local businesses to interact with consumers, without being bombarded by larger corporations. There is a local potential for this social media platform, it will be interesting to see if it can create some competitive advantage with the other social media sites. Could Foursquare be the next social media craze, your thoughts?