The budding business model for Foursquare is local ads through geo-targeted offers. When you check into a bar or restaurant, you might get 10 percent off your meal, or maybe a free drink if you are the mayor (it’s good to be the mayor). But how do you find all of these venues on a map. On the the Foursquare iPhone app you get a list of nearby venues, but that is it. Not even a map.
Fortunately, Foursqaure makes all of its venue data available through its liberal APIs. Developers like James Gillmore can take that data and create their own products around Foursquare like he did with Snacksquare. The Website is a business directory for Foursquare. Select a city and it shows you all the venues currently offering deals on a Google map, as well as by badge. Try New York City, Chicago, or San Francisco. If you like a deal, you can send it to your phone to redeem later. Snacksquare launched just in time for Foursquare Day tomorrow, which will be a massive festival of Foursquare offers across the country.
When you go beyond the big cities, there aren’t that many deals. In fact, according to Gillmore, there are only a total of 1,500 business venues (stores, restaurants, bars) running specials right now in all of Foursquare. (Tristan Walker from Foursquare says it is closer to 2,000). But that number will surely grow. Gillmore wants to turn Snacksquare into a way for local merchants to manage their Foursquare venues and contact loyal customers. Businesses can add their Foursquare venues to Snacksquare and create SMS advertising campaigns that target the people who come to their venues.
Now here is where Snacksquare’s business model enters questionable territory. Snacksquare basically harvests all the checkins for all the business venues on Foursquare. Then it helps businesses who sign up to scrape those lists of customers from Foursquare and try to add them as friends in order to get their phone numbers. (It makes them change their Foursquare names to the names of their business). Once they have their phone numbers they can send them marketing messages and offers via SMS (trust me, this can get annoying very quickly). But for local businesses, it’s another way to capture existing customers who walk in the store.
The big question is, would you become a friend of a business you frequent on Foursquare? If the answer is yes, Snacksquare might be onto something. It is certainly an aggressive approach, but it is also a taste of what’s to come with geo-advertising in general. Either way, get ready for more Foursquare spam.