The app does not cost money.

I don't know what Loopt's business model is but I would imagine a location-aware mobile ad platform would be pretty valuable.

If they can get people to use it, and get them to put up with ads, perhaps.

It's as if "location-aware" is some magic buzz word these days.

You can call it a magic buzz word, but I think it's common sense. There's a whole existing segment of the offline advertising market that is built around marketing things close to you. Meanwhile, people routinely use their smartphone to look for places to eat, things to do, places to buy things, etc.