Following in the footsteps of other social networks, Foursquare is finally incorporating paid ads into its service.

Last week, the company launched Local Updates, which allow business owners to share their daily specials, for example, with loyal customers nearby.

Promoted Updates, which come in two forms, are essentially the paid version of Local Updates. You’re no longer limited to reaching only your current customers. Instead, you can update members about a new product or service (Promoted Updated) or offer Foursquare customers a deal or reward (Promoted Special).

“Local Updates are really about engaging with your existing customers when they’re in the feed, when they’re nearby,” explained product manager Noah Weiss. “[Promoted Updates] … are about showing your business more prominently, hopefully with a compelling piece of content, in the Explore tab, which is where our users go when they’re actually looking for ideas for what to do next in the real world.”

The new updates are being rolled out to a pilot group of large chains, including Walgreens, Old Navy, Best Buy, and more. According to TechCrunch, all of these companies are paying Foursquare on a “cost per action” model, not based on views or impressions.

Foursquare’s latest updates are really making it a valuable tool for local businesses, as well as larger brands. Although it isn’t currently known when Promoted Updates will be available to all businesses, it’s definitely something to keep on your radar.

[Via: VentureBeat, TechCrunch, Image credit: Dennis Crowley]