National brands that do not build effective local mobile ad campaigns will miss a major opportunity to connect with consumers in their neighborhood, Mike Boland, program director for BIA/Kelsey's Mobile Local Media practice, told MediaPost.
BIA/Kelsey's mobile ad revenue forecast suggests local, mobile campaigns will grow from $664 million in 2011 to $5.8 billion in 2016, representing a compound annual growth rate of 54.2%.
While the word "local" typically conjures up images of small businesses, Boland said national brands have begun to see a clear increase in performance for location-based targeted mobile ads. Adoption has been relatively slow until now, but Boland has begun to see signs of change. That change is coming from national advertisers.
As the second-largest mobile ad network, Millennial Media provides statistically significant evidence of mobile local advertising performance. The network reported last year that location targeting in mobile ads rose 53% year-over-year. Similarly, a September 2012 Balihoo survey indicates mobile local ad growth from national advertisers.
xAd, YP, LSN, Telenav, Moasis, and WHERE are other networks that provide insight. Boland said supporting Millennial's data, xAd also shows mobile local display ad click-through rates (CTRs) of 0.72%, compared with 0.1% mobile average, and 8.13% for mobile local search, compared with the 5% mobile average.
While CTRs offer a good form of measurement, Boland said mobile marketers really need to look more closely at what happens after the click because there's a high likelihood an ad can generate a phone call or request for directions.
"We know ads generate user intent, so craft the campaigns to include click-to-call links or an easy way to get directions for those that rely on foot traffic," Boland said. "It provides a tool to measure performance."
Some 36% of the search clicks measured by xAd resulted in at least one secondary action. Some 58% were phone calls, followed by 36% for directions, and 1% clicking to view more information about a business.