Access to Foursquare check-ins isn’t free anymore, at least not for developers who heavily rely on the location-based social network’s database. The 5-year-old company is now going to charge certain businesses to use the information it has gathered from user check-ins, according to reports from The Wall Street Journal (WSJ).
Currently, Foursquare is negotiating with its heaviest data users about the fees. However, Jeffrey Glueck, chief operating officer (COO) of Foursquare, told WSJ that although access to the company’s database will no longer be totally free, the change in policy will only affect less than 1 percent of the 63,000 clients that use the platform’s information.
Nevertheless, some suspect that the fees may irritate developers from Pinterest, Twitter, and Vine, as well as others who use Foursquare’s location data in their own apps.
“I don’t see it jeopardizing relationships with outside developers,” says Angie Pascale, director of social and search engine optimization at digital marketing agency Location3 Media. “The practice of charging businesses for data is quite common, so as long as the fees are in line with what others charge, I’m sure it will be fine.”
“When Twitter filed their IPO last year, they disclosed a cool $47.5 million in earnings from selling off data,” she notes, adding that if Foursquare can claim even a small percentage of that revenue from these fees, the company will stand to benefit.
So far, the platform hasn’t made much profit, despite its 50 million registered users. But it has been working on a sustainable business model to monetize its user information.
Earlier this year, Foursquare inked a similar deal with Microsoft, where the tech giant agreed to pay the check-in service business fees to incorporate Foursquare’s location data into Microsoft products. And in June of 2013, Foursquare started charging businesses a $20 registration fee.
Looking beyond Foursquare itself, the larger practice of charging fees for database information which brands and marketers are willing to pay for, indicates the increasing value of social data and the insights it can provide.
“Understanding what places consumers frequent can reveal a great deal about their interests and preferences, information which every marketer is drooling to get their hands on,” says Pascale.
“In the case [of] Foursquare data, it ties offline behavior to online activity, which is more challenging to come by but also more desirable for marketers,” she adds.