Google is serving location-based advertisements within its Maps for Mobile feature, which is preinstalled on Apple's iPhone.

The sponsored listings are now featured on the map and in the listing after a consumer searches within the preloaded map application. Google said these new location-based ads are a continuing experiment.

?As we?ve said before about our philosophy, we?re always experimenting with new advertising strategies and are being smart about where we place relevant ads,? said Eric Obenzinger, New York-based spokeman for Google.

?We felt there was an opportunity to provide useful and relevant ads on Google Maps for Mobile, and believe this will have a positive impact for users who search for info via their mobile devices,? he said.

In a blog post, Nick Fox, director of business and product management at Google, said the search engine giant will continue to experiment with placing ads in new places after inserting them in Google Image Search results and Google Finance.

According to the blog, the different text and image advertisements being tested and the sponsored videos on YouTube are an example of matching ads to content.

Google evaluates consumer reactions whenever advertising practices are changed to ensure the ads meet Google?s principles of being relevant and useful.

Scott Dunlap, CEO of NearbyNow, Mountain View, CA said the iPhone changed location-based search, so it is only natural it will be a part of location-based advertisements.

?Location-based ads showed a lot of promise on the Web and within mobile they really delivered, so it?s no surprise we?re going to see lots of experimentation on mobile maps,? Mr. Dunlap said.

NearbyNow builds search technology to help consumers find what they want near them at any time. The company's "find near me" button appears next to products in mobile applications and online sites.

Mr. Dunlap said that NearbyNow tracks the conversion rates of local searches that result in in-store sales and it is between 5 and 6 percent. He said that since the conversion is so high, it should be an indication of a bright future ahead.

But, who will really benefit from location-based advertisements in tools such as Google Maps?

Mr. Dunlap said the companies who get the most benefit from serving location-based ads are local retailers and small shops, yet they are still having trouble understanding how to use the mobile platform.

If these small businesses see that buying an advertisement on Google can get it served on a local level, Mr. Dunlap said that retailers can then easily jump onto the mobile channel.

Mr. Obenzinger said that Google will continue to experiment with new ways to serve ads to consumers.

?We've consistently said that we'd introduce ads when we were certain it would be a good experience for users and advertisers,? Mr. Obenzinger said. ?We think that is the case now for Google Maps for Mobile."