Twitter is reportedly developing geo-targeted ads that will let brands show promoted tweets to people who open its mobile apps within close range of their stores. According to AdAge, the new ad unit could be available as soon as the end of the year.

The company already displays trending topics based on geographic location, but currently consumers can only see promoted tweets based on who they follow, what device they’re using, or what city they live in. Twitter’s recent acquisition of search technology company Spindle makes it look like geo-targeting is a high priority.

For larger chains like Walgreens or McDonald’s, this kind of ad could help drive in-store traffic with a deal or a special, or just by simply notifying nearby consumers of their presence in the area. Sephora’s VP of interactive media Bridget Dolan told AdAge that geo-targeted Twitter ads could also be used to alert people to in-store events and to new brands that have recently been made available in stores.

If this concept seems familiar, that’s because it is. Companies like Google, Foursquare, Yelp, and even Facebook have turned local discounts into a business. Facebook in particular has been offering zip code targeting for a couple of years, while Twitter has yet to offer anything similar. This currently gives the social network an advantage, but it’ll be interesting to see how promoted tweets compare in terms of sales conversions once this ability is live.

Twitter declined to comment on the product or the timing of its release. With major features like this one, it’s likely that it’ll be delayed — although an end-of-year launch would be great for marketers targeting holiday shoppers. We’ll keep you updated as more details are made available.

[Via: AllTwitter, Image credit: Cliff (Jasper Johns)]