Is Foursquare Poised to Rule Local Advertising?

Foursquare created buzz with its mobile social networking app that encourages users to get out and explore the businesses in their neighborhood. It even made a game out of meeting up at your local watering hole. Now the company is planning Foursquare for Business, giving it access to what may be a local advertising goldmine.

Here’s how it works: Foursquare tells your iPhone (or other smartphone, via its Web app) that there’s a good deal down at the local pub. That place happens to be your number one hangout; you’ve been there 10 times this week already. As Foursquare explains on its site,

In the past few months we’ve seen local businesses encouraging users to
show their phones to servers and cashiers as a way to prove their
loyalty to a particular place.

“Foursquare says you’ve been here 10x? That’s a free drink for you!”

“Foursquare has deemed you the mayor (aka you’ve been here more than any other user)? Enjoy this free order of french fries.”

We’ve seen venues promote their involvement with foursquare via
Twitter, signs at cash registers and sidewalk blackboards. We’re just
starting to make these specials “official” by including them in our
mobile apps and on our website.

This means two things: First, that Foursquare can monetize this kind of cottage industry activity by making it all part of the system (watch your back, Yelp). Second, it gives small business owners an easy conduit through which they can run promotions, reward regulars, and track customer loyalty. Find out more from the company’s blog. Thanks to Foursquare’s already aggressive growth, this may be a service that explodes in popularity.

Images via Foursquare.