• by Gavin O'Malley  @mp_gavin, April 20, 2011

To bolster PayPal's mobile commerce efforts, eBay on Wednesday said it agreed to buy location-based media company Where Inc. Best known for its location-based discovery mobile apps, Where also runs a hyper-local ad network, Where Ads, which claims to process some 2 billion ad impressions monthly.

Financial terms of the deal were not disclosed.

Richard Brewer-Hay, senior manager of social media at eBay, described Where as "at the forefront of the intersection of local and mobile commerce -- two of four trends eBay has clearly been focusing on for some time now -- the other two being social and digital."

In December, Boston-based Where won a patent for "geofencing" technology, which creates a user-defined virtual perimeter for a geographic area and allows users to send and receive notifications based on their exact location.

Per the deal, PayPal is now expected to begin integrating its payment service into Where's mobile apps.

"By delivering personalized, hyper-local advertising, offers and deals to shoppers on their mobile phones, we see a huge opportunity for retailers and brands to reach more buyers, and for consumers to get more choice and value when they shop," Brewer-Hay says.

Supported by positive research, marketers are showing increasing interest in hyper-local targeting.

Recent research from Yahoo indicated that hyper-local targeting of retail display campaigns generated more than five times return-on-ad-spend, measured by sales lift at the retailer.

Customers that live within two miles of a retailer's stores represented 10.6% of the audience that sees the ads, but generated 56% of the revenue, Yahoo found. Return-on-ad-spend was four times the spend for customers living within five miles of a store, and 21 times the spend for customers living within two miles of a store.

EBay adds that mobile commerce -- or "MCommerce" -- is booming. Its global mobile sales generated nearly $2 billion in 2010 -- up from $600 million in 2009, ebay noted at the beginning of 2011. The figures do not refer to revenue, however, but gross merchandise volume.