Foursquare is best-known as the consumer location app launched in 2009 that let users “check-in” to different locations – but its biggest business now is all to do with data and ad tech.
After splitting Foursquare into two apps in 2014 – Swarm for the check-in side and Foursquare, a Yelp competitor that offers local recommendations – the company launched its programmatic ad platform, Pinpoint, in April 2015.
Pinpoint uses data from Foursquare’s consumer apps to help advertisers identify, target, and measure the audiences they want to reach, based on their location. It’s used by brands such as Samsung, Olive Garden, and AT&T.
Last year, Foursquare’s advertising solutions business grew 170% to, as of September, a $50 million annual revenue run rate.
Peter Krasniqi, Foursquare’s VP of global sales strategy and operations, told Business Insider that this year it’s going to grow “even faster” – partly thanks to becoming a customer of a tiny ad tech startup based in New York City, founded by three former Googlers.
Foursquare picked up a bidder
In the first quarter of this year, Foursquare began using Beeswax, which was founded last year by ad tech veteran and former Google product director of advertising products Ari Paparo, Shamim Samadi, the former lead on Google’s video ad exchange, and former Google technical lead Ram Kumar Rengaswamy.
Beeswax markets itself as a “bidder-as-a-service.” It offers a cloud-based bidder – technology that automatically places bids on the real-time auctions for ad space that take place as a web page loads.
The appeal of Beeswax to Foursquare was that it undercuts the other bidders and demand-side platforms in the market on price. Beeswax’s fees start at $7,500 a month – far cheaper than the $1 million Beeswax says it would cost to build a bidder in-house.
Krasniqi said: “We did an extensive review of many different options including building a bidder ourselves or licensing a bidder through an outside partner. Out of all the options, Beeswax proved itself to be the best option in terms of both cost-efficiency and time to get new products to market.”
The other benefit of using Beeswax, according to Krasniqi, was that the service is customizable. Foursquare has started using its location data in new ways – like building audience segments in real-time and optimizing media placements based on offline place visit data – rather than just using the same technology as its competitors.
Krasniqi said: “DSPs offer a great toy that works really well for most people right out of the box. For us, it makes more sense to use Beeswax, which is more like Legos. They give us the pieces, we have our own attachments that no one else has, so we can create custom products.”
Looking ahead, Foursquare is hoping to use Beeswax to accelerate the development of its programmatic ad platform and, by doing so, perhaps clear up any misconceptions that consumer usage of Foursquare – and therefore the amount of its reliable first-party data – is on the wane.
Our first-party data comes from our apps, and our users and usage are up more than ever. Today, over 50 million people use Foursquare, Swarm, and our websites every month. People check in over 8 million times in a day on Swarm, and overall, through our apps and those of our 100,000 developers, we get nearly 1 billion data points on place visits every month. Our database of over 85 million places is refreshed on a daily basis by this enormous community.
Outside of our own products, Pinpoint also pulls in location data from over 147 million devices through third-party publishers and exchanges. We use our own robust dataset as a model for corroborating the accuracy of the location data we ingest, and segment audiences based on movement and location of these phones.
Beeswax launched out of beta on Thursday. The company says the platform has adopted by “over 30 ad tech companies and marketers” since it began testing its cloud bidder service last July.