With the ongoing boom in location-based services like Foursquare and Gowalla, marketers are simply salivating at the possibility of knowing where you are at any given time. As I've said before here, location is the holy grail of online advertising. Effective ads are all about context--hit people with the right ad at the right time, and you increase your chances of closing that sale tremendously. And now with more and more people willing to share their location online, marketers can send people ads while they are at or near the point of sale. This is huge, and marketers are rightfully drunk with the possibilities.
But will consumers go along with it? I think so. I actually think most people would welcome ads that were more relevant to them. It annoys us when we see an ad for something we're completely uninterested in, but, go ahead, please do send me a coupon for something I'm about to buy anyway!
Google's Adwords are more effective than banner ads, simply because they're more targeted, and this accuracy will only increase with the proliferation of location data. I think as long as the social networks continue to give users compelling reasons to ignore their privacy concerns and share their location with friends, users will not only tolerate any targeted ads sent their way, but they also might even welcome them.
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