Check Those Check-ins: Foursquare To Start Selling Your Data

Oh, I am so glad that Valleywag is back. Silicon Valley’s beloved tech slash gossip blog has finally been brought back from the dead, and without even missing a beat has managed to get their sticky little hands on what might be some of the hottest news in the social media and advertising industry this year.

And it’s not even about Facebook.

A few weeks ago, speculation surfaced that Foursquare was poised to start offering targeted ads to users based on check-in data. According to Adweek, the new revenue model would eventually allow advertisers to use Foursquare data to target ads purchased through ad exchanges or networks. At the time, Foursquare said in a statement that “We are always looking at ways that could make our data more useful for advertisers and partners, while respecting the privacy of our user’s information. We’re really excited about our 2013 monetization roadmap, and will provide more details when the time comes.”

Currently, Foursquare’s revenue model is mostly based on profit from businesses buying promoted listings and specials advertised solely within Foursquare as an app.

Yesterday, Valleywag – a Gawker property – leaked the presentation Foursquare has been showing advertisers promoting the new ad units. Foursquare’s pitch includes the fact that the location-based app has 30 million users who have checked in at restaurants, bars, and other venues more than 3.5 billion times – and that these check-ins can be leveraged as targeting markers for advertisers.

Yes, you read that right; your previous Foursquare activity is going to be sold (to advertisers with budgets between $50,000 and $75,000) and used as part of retargeting campaigns. Now, we love a good retargeting campaign and smart advertising that is destined to perform well. What scares us – as it should you – is the fact that these new ad units are due to roll out in May…yet with the exception of some savvy tech press, no one knows about it.

This includes most of the 30 million Foursquare users who are about to have their entire check-in history sold and leveraged by third-parties to make even more money. Currently, Foursquare’s Privacy Policy even states that “Personal Information about our users is an integral part of our business. We neither rent nor sell your Personal Information to anyone.” This “Personal Information” includes the location when you use Foursquare. Further, in the Privacy FAQ, Foursquare explains in detail that “Only your Foursquare friends can see your check-ins, and they must be logged in to the app or the website to do so. Venue owners can see if you recently checked in to their venue or if you are a frequent visitor, but they can only view your first name, last initial, and total number of non-private check-ins at their venue (you can opt out of this by going to ‘my settings’ > ‘account settings’ > ‘privacy settings’ and unchecking the corresponding box).”

There is no mention of advertising anywhere in Foursquare’s Privacy Policy, let alone an option to opt out. Unless Foursquare is ready to face the same backlash Instagram faced last December over a similar lapse of communication, Foursquare better quickly explain how they will be displaying advertising and leveraging user data to do so – and also offer users that critical opt-out page to prevent legal ramifications, too.