I recently spoke with Blair Swedeen, the VP of Market Development at location-based advertising network 1020 Placecast. After Swedeen left a comment on the post I’d written about location-based advertising, he took some time to speak about his own company, as well as the location-based advertising market as a whole. This is part one, where we cover the basics of 1020’s business plan and location-based advertising. In part two, we talk about the small but growing mobile ad market, what industries are a good fit for location-based advertising, and the three things that need to happen for the mobile-advertising market to take off.

BNET: Can you talk about what 1020 Placecast does?

Blair Swedeen: We work across fixed broadband, mobile, and WiFi connections. We work with ad agencies and publishers like any other ad network, but our way of inferring relevance it what sets us apart, which is using the place vector. Place is the combination of location, and what’s going on in that location that makes it meaningful to someone who’s going to see an ad. So we can reach a business traveler who is in an airport in between 8 and 5, Monday through Friday. We can reach them at where they are logging on to the Internet and serve them up an ad that is significantly more relevant because we can infer the audience that is going to see that ad. And relevance is how you jack up clickthough rates, that’s how you get better CPMs.

BNET: What’s the user experience for a mobile user that is near a location where you’re running a campaign?

BS: There are a couple of ways that you’d see a location-relevant ad being served from the Placecast network on a mobile device. One is within a mobile website – you’d see a banner or a combination of display and/or text that would be relevant to your location. So you’d see an offer that, in addition to some standard branding, also includes a local phone number and address for the closest location.

In mobile applications, we have partners that have implemented our technology, but the carriers have not yet pushed forward how they’re going to do location-relevant advertising within applications. But there you could see the equivalent of an interstitial within an application, so a similar type of an ad to what you’d see on a mobile website, but it would embedded in an application that was consuming GPS information, or some sort of location information.

BNET: How vital is GPS becoming a standard feature in mobile phones to location-based advertising?

BS: Within in the market, people talk about positioning, which is the generic category for things like GPS, cell-tower triangulation, and WiFi-triangulation. So on the iPhone currently, the Google Maps is supplying cell-tower triangulation, which is accurate to anywhere to 1500 meters, roughly. The iPhone also has SkyHook which uses WiFi-triangulation, which they’re making available to third-party developers. WiFi-triangulation is a bit more accurate, but if you’re in an area that isn’t densely populated with WiFi connections, you won’t get a fix at all from that technology. And then with the 3G iPhone, you have GPS. GPS is very accurate if you have open sky conditions and can wait a while to get a fix.

We can match an ad to whatever the level of accuracy is available, whether it’s coming from cell-tower triangulation or GPS. So if you’re looking at a map and you’re zoomed into a four-block radius we’ll show you an ad for something that’s half a mile away, if there’s a heavy geo-targeting component to it. If you’re looking at the whole state of California, we’re not going to show you the same ad if it’s 500 miles away.

(Click here to go to part two.)