Recently, Cantor Fitzgerald internet analyst Youssef Squali paid a visit to Yelp and came away impressed with its roadmap to attract and maintain its string of national advertisers. Yelp has 100 million monthly uniques worldwide, 36 million-plus reviews and over a million merchants signed on to its system. The company "seems close to hitting a tipping point in terms of scale and reach to become a major buy within this growing pie... Yelp is clearly positioned to benefit from the ongoing shift from offline to online," Squali says.
But Foursquare does have certain advantages that it only now seems to be activating, notes Tadji Akhavan, social strategy director for digital ad shop mOcean.
"The fact that Foursquare has 93% penetration in local retail is a tremendous marketing opportunity," Akhavan said. "Even beyond direct advertising on Foursquare, the data about consumer behavior and business traffic in local areas represents a significant business potential for them... If they can figure out a way to market their data effectively, they could make a leap from just being a geo-targeting app."
With 3.5 billion check-ins in four years, plus current relationships with 1.3 million business, Foursquare has covered a lot of ground so far. Thirty-three million have tried Foursquare already, Crowley notes in the funding blog post, suggesting retention has been a problem
But observers in the local geo-targeting space still have questions about whether Foursquare can effectively turn its analytics into actionable insights.
"Only when you can understand consumers’ offline behaviors, can you take steps to effectively change them," noted David Shim, CEO of local analytics provider, Placed. "Foursquare is one of the few players with insights into offline behaviors, but the monetization of this data beyond ads is an open question. How will users respond if Foursquare commercializes their data outside of the app? Will the biases inherent with check-ins impact the actionability of insights?"