While Facebook may hold the lead in the realm of social media, location-based Foursquare continues to grow and show that it may be a worthy competitor. So what is location-based social media, how are people using it, and how can you use it to promote your business?

Don't know much about Foursquare? This social media site works with an app on your phone to track businesses and other places you frequent. When you "check-in" to a location via your phone, it shows up in Foursquare and keeps count of how many times you visit certain places. Some businesses will offer specials or discounts to those who frequent their business and check in via Foursquare.

In some ways, Foursquare is like a game. You can earn points by visiting venues, obtain badges, and see how you rank against other customers. Users rank not only against their friends, but also everyone else in the city, creating a competitive aspect. And if you're a really devoted customer, you might strive for "mayorship." The mayor of a venue is the person who has visited the most in the past 60 days, and usually gets a freebie for doing so.

This provides a great opportunity for businesses to reach out to local audiences. By promoting your business and offering specials, you can entice new customers to visit your business. Also, users are rewarded with points for being adventurous and visiting new places, and so people who have never visited your establishment might have incentive to do so, even without a special offer. And for those who are already customers, it encourages them to visit more often when you offer special discounts and freebies for frequent visitors.

Customers can also help you promote your business via Foursquare, by creating tips and to-dos. They can tell friends and the general public about information regarding your venue (like nights you offer a special, or a dish or product to try), which will be seen by anyone nearby.

Once you've signed up, Foursquare offers tools and services to help you promote your business. You can choose what type of offers you'd like to make available to your customers, and even check real-time stats to see how many visitors you’re getting.

With the success of Foursquare, other similar sites have cropped up and tried to compete. Social media giant Facebook came out with a similar app, Facebook Places, which was hailed as being a "Foursquare killer." However, instead of killing Foursquare, Facebook Places helped it grow even more. So how did that happen? Mainstream media extensively covered Facebook Places, saying it would rival Foursquare, which many people hadn't heard of until then. This caused people to look up Foursquare, and many signed up when they learned about what it is and how they could benefit from it.

Facebook also helped to legitimize location-based social media. Those who had heard of Foursquare, but were reluctant to use it for one reason or another, saw that Facebook had a similar service and figured that it must be something worth using.

However, Foursquare is not for every person or business. Since you need an app on your phone to use Foursquare, those who don't have Internet on their cell phones won't be able to use this service. Also, by using Foursquare you're basically announcing where you are at all times. Those who wish to keep their lives more private will likely never use Foursquare. Therefore, there is a significant portion of the general population you won't reach via Foursquare.

It also will not benefit every business the same. Businesses such as car dealerships, law firms, or funeral homes that people only visit when necessary or infrequently, will probably not find a lot of success. However, businesses with frequent repeat visitors, like restaurants, bars, and coffee shops can benefit greatly from Foursquare. Of course, with other forms of social media marketing, it all depends on how you use it.