Google is stepping into location-based advertising with the introduction of mobile banner add that show users nearby services.
The unit is an offshoot of AdWords' location extensions. It allows advertisers to attach their phone numbers and business location on an expandable map.
The new ad format will run on sites and applications that are part of the Google Display Network. Users of smartphones like iPhone and Android will see a text call to action and small thumbnail graphic. Tapping on the ad expands it to show a Google Map with the business plotted and number displayed.
Google will only charge advertisers when users tap to call the business or visit the advertiser's mobile site.
Surojit Chatterjee, senior product manager for mobile ads at Google, said Google would determine the location of users through a variety of means, including nearby WiFi networks and the Internet Protocol address. The process is trickier than location-based search ads since users will not opt-in to provide Google specific location information.
"We try to do our best to get the location as good as possible," he said. "We're trying to infer it from indirect means as best we can."
The process is complicated by the large role Google rival Apple plays in the mobile market. Its rules forbid application developers, for example, from collecting location data only for advertising purposes.
Chatterjee said the radius for location ads would vary. A car dealership listing, for instance, could be miles away, while a coffee shop ad would be within blocks.
Google has eyed mobile advertising as potentially a huge driver of future growth. It faces competition in the area from independent ad networks like Millennial Media and Greystripe as well as Apple's new iAd net. Google bought mobile network AdMob for $750 million, and it has rolled out several types of mobile ad products, including click-to-call placements and expandable ads that display video and other content.
See also: "Apple Extends Mobile Ad Platform to Developers"