Commentary

Forecast: U.S. Mobile Ad Spend Will More Than Double By 2021

By 2021, U.S. annual mobile ad spending will reach $72 billion, according to a fresh forecast from BIA/Kelsey.

That’s up from $33 billion last year, by the research firm’s reckoning. If accurate, mobile ad spending will see a 17% compound annual growth rate through 2021.  

Of the overall mobile ad spend, the location-targeted portion is projected to grow from $12.4 billion in 2016 to $32.4 billion in 2021.

This growth translates to 38% of overall mobile ad revenues, today -- growing to 45% by 2021.

One of the biggest mobile success factors for local mobile is native thinking, which involves building content, apps and ads that fit the device’s unique form factor, rather than porting formats from legacy media.

The smartphone’s location-tracking abilities and portability, combined with users’ transitory behavior, make location-targeted content a natural fit.

In addition to segmenting mobile ad spend by its locality, the report also reveals BIA/Kelsey's estimates for each mobile ad format including search, traditional display, messaging, video and native-social.

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Search has long maintained a top position but is slowly losing share to emerging formats like native-social. Native-social ads are expected to derive $10.2 billion in 2016 and grow to $24.2 billion in 2021. This growth stems from the format’s advantages, high performance and resulting demand.

For example, mobile screens lack real estate for traditional top and side banner ads that ruled the desktop Web. A vertically scrolling feed (a la news feed) conversely holds greater capacity for ad inventory.

The mobile forecast covered in the report mirrors BIA/Kelsey's cross-media U.S. Local Advertising Forecast for 2017 that covers 12 media.

The forecast defines location-targeted ads as those that are targeted based on a user’s location or include proximity-relevant content to trigger local offline conversions.

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