I don't like ads (typically). But as ads get more and more targeted (ie., when i haven't gone to the dentist in 2 years and the ad says, "great dentist with promo offer just 2 miles from you", that's kind of enticing). I think it will migrate to where ads need to be helpful (ie., google ads). Search was easier because Google could target on the search term. But it's harder when the user isn't proactively searching for something.
But I think it can be done. The ads just need to be super-targetted and helpful.
it's not just health. look at Google Now on android 4.1. they're going to know everywhere you went and a lot more info. sooner or later, this will likely lead to targeted ads if they can deliver high-value ads the user actually wants. ie., [you're driving past your favorite pizza shop] Pizza Boy is offering $5 off today your normal order. Should i place the order for you?" the reason most everyone will opt in is because of the high value-add it provides. my wife quickly opted in to Google Now on her android phone cause she wants the extra features.
I'm skeptical of the "driving by the pizza place" examples. Physical proximity to the pizza place usually doesn't imply any intention to consume pizza. There has to be a stronger signal. I'm physically close to a pizza parlor and I just searched for "dinner and beer" would be enough to assume I have some intention of consuming pizza hence advertising the pizza parlor at that moment is valuable to both myself and the business.
Advertising based entirely on physical proximity could be almost useless. Imagine driving through downtown at 11 PM on a Friday night. As you pass the dentist you're prompted with "50% off your next teeth cleaning!". As you pass the park you're prompted with "Sunday Parade at the Park!". As you pass the liquor store you're prompted with "Beer sale!". Finally something useful. However by this point I would probably be ignoring the ads.
The pizza example would be more like you're driving home from work at 5:30pm on Wednesday on your typical route which passes by the pizza shop. Google Now knows that it's dinner time and that you've purchased from that pizza place before on a Wednesday for dinner. Thus, it "alerts" you of a special deal if there is one.
Yes that would probably work. I think the pieces of the signal in decreasing importance are: you purchase from a business frequently, the current time is close to the average time at which you purchase from that business, you're physically close to the business.
I wonder if physical proximity really matters relative to the other two pieces? Pizza places can deliver so even if you're across town the ad could still have value. Corner case is when you're on travel and physical distance is very large.
Sharing location with apps is trivial to avoid (just don't use them if you're not comfortable), it's not an iphone secret file that stores everything until someone exposes it (zing!). Besides, 'you are on main street' vs 'your daughter has herpes' are far different levels of invading privacy, the former is not a particular secret at all.
But I think it can be done. The ads just need to be super-targetted and helpful.