To date, most location-specific advertising requires in-store check-ins to unlock discounts and special offers. Naturally, that necessitates having a storefront that lends itself to walk-in — and check-in — traffic. Foursquare, Gowalla, Loopt and others have garnered first-mover hype with these location-based services but have struggled to achieve mainstream adoption beyond the tech elite.

JiWire is extending geotargeted opportunities to brands that have a local presence but may not have a storefront with a sign bearing their name. The public Wi-Fi network provider is introducing Compass, an advertising platform that creates a geo-fenced, ad-in-app interactive experience for users, allowing them to discover nearby brands and then connect with them.

Compass is a direct outgrowth of JiWire’s recent acquisition of NearbyNow, one of several companies (eBay’s Milo, Google Product Search, Krillion) competing to showcase real-time product inventory at store level. Fusing NearbyNow’s capabilities, Compass enables its 40 million on-the-go users to survey brands that are in stock at local stores, then engage them directly. These behaviors include accessing walking and driving directions, clicking to call or text a retailer, reserving and/or purchasing products, and booking appointments. Advertisers can layer on additional content such as promotional videos as part of customized tabs that they build out.

David Staas, JiWire’s senior VP of marketing, told BIA/Kelsey that the integration of NearbyNow allows JiWire to generate “advertising with location content as part of the overall message.” The implications are a more delightful customer experience and a potential move to performance advertising models based on the actions that the ads can motivate. Ads will be sold on a CPM basis to start.

Here’s how it works. JiWire’s networks serve a mobile, tech-savvy clientele in public places such as cafes, coffee shops and airport lounges. These users are shown standard display ads. But when they click through, the ads expand into a full-screen, app-like experiences. JiWire-NearbyNow synergy kicks in when the app is launched, as Compass uses geo-fencing technology to target a user’s location to present location-relevant store information and product data.

Launch partners include Clinique, HP, Ritz Camera and Groupon. JiWire struck an agreement with the deal-a-day giant last week to generate neighborhood-level deals … a fit for JiWire’s transient audience. For Groupon, the pact marks a new level of geographic granularity.

More generally, the implications could be numerous. Check-ins could be scaled to a wider base (JiWire’s 40 million customers to Foursquare’s 4 million) and scaled to businesses with strong brands but without storefronts. It also broadens the opportunity beyond retail outlets and into a variety of franchise industries. Furthermore, it begins to close the loop on LBS and social buying. Geo-fencing locates consumers at neighborhood level, feeds them an array of search-and-shop options, and offers related deals.

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