June 19, 2012 at 7:26 PM ET
Facebook is on the verge of creating an advertising scheme for the social network that relies on real-time location data from mobile phones. Such hyper-local data is extremely valuable to advertisers, who like to be as relevant as possible in order to maximize click and purchase rates. But the move may not be popular among the social network's users.
Facebook's vice president of global marketing solutions, Carolyn Everson, told Bloomberg in an interview Monday:
Phones can be location-specific so you can start to imagine what the product evolution might look like over time, particularly for retailers.
With smartphones overtaking traditional phones and landlines as the primary mode of communication for millions all over the world, it's to Facebook's advantage both for social and advertising reasons to utilize features like GPS. The site already allows users to check in to locations and advertise their whereabouts to friends, but that data has not yet been used extensively for ad targeting purposes.
But Facebook has been testing just that thing over the last few months, Everson said, and the company is already in the middle of a serious advertising expansion following a lackluster IPO and questions regarding their viability as a business.
Users may feel they are already tracked too closely by the services they use, but Facebook can at least make the case that localized offers are often far more relevant to users than ones based broader demographics like age or gender. Checking into a Starbucks, for example, might cause a coupon for half off another drink to show up next to your friends' status updates, or perhaps a similar offer from an adjacent business.
Many companies already specialize in this type of advertising, but Facebook's reach would be larger and their data richer, making their ad platform potentially extremely valuable.
One problem is that users have to opt into location-based services like check-ins and local news, and many are wary of taking this step. Facebook will have to work to make those services more enticing — or less optional.
Devin Coldewey is a contributing writer for msnbc.com. His personal website is coldewey.cc.