Foursquare, the geo location service where users “check in” to locations is expanding its advertising platform to cover small businesses. Up until now a small number of larger businesses have been trialling Foursquare as an advertising platform. The rollout to smaller businesses is only in the US, UK, Brazil, Russia and Turkey at the moment and you need to sign up here.

The way that an ad on Foursquare works is based on the location of your business and the interests of those that are nearby. For example, if you owned a coffee shop in Blackburn and somebody from Preston who has checked into coffee shops in other locations is near to your store then the ad would appear. Here is where it gets more interesting. You pay if somebody clicks on your ad and then pay more if that person then checks in to your location.

This might seem a little odd but while it is definitely good for Foursquare to help increase their revenue it is also useful for businesses to know how many people clicked on their ad and what percentage of those people then visited them in person. This will help companies to refine and optimise their ads in order to not just gain a higher click through rate but to also get a higher check in rate. The paid for ads on Foursquare are clearly noted as being promoted so users know the difference between a paid for and an organic listing. Advertisers will also gain access to a special dashboard that will allow them to set up or amendwith their ads as well as getting a weekly email which will report on ad performance.

I cannot say what the costs are of advertising on Foursquare and obviously it will not be suitable for every business, in fact it is mainly aimed at B2C businesses. I would think though that with so few companies currently using Foursquare advertising as part of their online marketing activities it is very likely that initially the costs are likely to be quite low. In addition Foursquare cannot boast anywhere near the sort of numbers of users that the likes of social media giants such as Facebook and Twitter can. The advantage that Foursquare does have is that its users are often searching for businesses that are close to their current location. This means that they are probably users who do not know the local area particularly well and so Foursquare can be a great way to spread the word that your business exists.

Mobile advertising is growing and growing as more of us adopt smartphones. There is no real clear winner as a business model for mobile advertising as yet, but Foursquare have now introduced some innovative ideas that will help the online marketing and PPC industry evolve.