CBS (NYSE: CBS) announced today that it has partnered up with social mapping and networking service Loopt to roll out what they are calling the US’s first serious foray into location based mobile advertising. The service, which is set to go live later this year, will serve up localized banner ads on two of the broadcaster’s mobile sites, CBS Sports Mobile and CBS Mobile News.

SEE ALSO: @ CES: Privacy Issues Holding Back New Era Of Mobile Personalization

For now, the service is limited to mobile subscribers of Sprint (NYSE: S) Nextel or its youth MVNO Boost Mobile who have GPS-enabled phones and who opt into it. But Loopt expects the other carriers to come on board later this year when the service actually starts. According to the New York Times, CBS has not yet signed on any advertisers, but the company’s EVP of mobile Cyriac Roeding expects that national sponsors will be the first to sign on.

Location based advertising has been touted as the holy grail of mobile marketing since the wireless web was first being talked about in the late Nineties. But location based advertising’s strength—its ability to hone in on a consumer’s exact whereabouts—is also its potential weakness. Media owners, advertisers and operators have been wary of angering consumers with ads that are too intrusive and too “Big Brother.”

It’s interesting that CBS has chosen to serve up localized banner ads rather than going for SMS coupons or ads. They actually pointed out in their press release that the ads were NOT SMS ones and that they “appear non-intrusively” on their mobile web sites—so privacy is a big concern. This is obviously going to limit the effectiveness of the ads as consumers will actually have to be surfing either the mobile news site or the sports site to even see them. CBS reports that its mobile sports and news sites generated some 75 million page views and counted 5 million unique users in Q4 2007. Still what are the odds of a consumer surfing CBS Sports Mobile while walking past a Starbucks for example?