A recent location-based campaign has tied physical ads to virtual ones. People waiting for the bus or other public transportation in New York, San Francisco, and Chicago from Feb 20 to March 6 saw standard poster ads for Gap clothing stores. When they opened Words with Friends, they saw another ad offering a coupon — this one triggered by being inside a "geofenced" area around the poster. According to Gap and Titan, which managed the campaign, the mobile ads had an average 0.93 clickthrough rate, several times the standard mobile rate of 0.2 percent.

Most ads for brick-and-mortar stores are location-based to some extent, but this campaign is more granular than most, activating only within a very specific area. In this case, it's being used to enhance the effectiveness of standard offline ads, but we could easily see geofencing being used in hyper-local advertising — say, by offering a discount at a nearby store. Of course, more potentially invasive uses — like building a rough profile of where you're regularly using your phone and serving ads based on it — are also possible.