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Facebook may soon roll out location-based mobile ads

An ad for the shoe store a block away might soon makes it way into your mobile Facebook newsfeed. The world's largest social network is reportedly working on location-based mobile advertising.

As reported by Bloomberg, the service will allow companies to use real-time data to target users based on their whereabouts.

"We're always looking at different opportunities across mobile," a Facebook spokeswoman said in a statement. "But we have nothing to announce [at] this time."

Back in February Facebook announced plans for mobile ads via sponsored stories in a user's newsfeed. But the company has been testing location-based options over the past few months, Bloomberg reported.

"Phones can be location-specific so you can start to imagine what the product evolution might look like over time, particularly for retailers," Carolyn Everson, Facebook's vice president of global marketing solutions, told Bloomberg.

Everson did not reveal when locale-based advertising would start rolling out.

Facebook advertising is still in its infancy, garnering interest from only 20 per cent of US users buying products based on ads they saw on the social network, according to a June study by Reuters and Ipsos.

Still, Facebook's earned media activity has performed well, eMarketer reported, citing a joint Facebook-comScore study that found that fans who were exposed to an earned brand impression from a retailer were more likely to make a subsequent purchase.

As part of its IPO filing, Facebook said that it had 425 million mobile users, but was not yet making any money from them, which could negatively affect its business. In April, Facebook filed an amended S-1 filing with the SEC that said it had 488 million mobile users, who were still not generating any revenue for the social networking giant, prompting concern from the SEC.