• by Jack Loechner , Staff Writer @mp_research, December 9, 2009

According to a new report from BIA/Kelsey, the geotargeted display (aka banner) ad market in the U.S. is expected to grow from $897 million in 2008 to $1.9 billion in 2013, representing a compound annual growth rate of 16%. The forecast also anticipates that the geotargeted display market will grow from 10.2% of all display ads sold in 2008 to 15% by 2013.

Geotargeting is the method of determining the physical location of a website visitor and delivering different content to that visitor based on his or her location, such as country, region/state, city, metro code/zip code, organization, IP address, ISP or other criteria. (Wikipedia)

The locally bought portion of the market, which primarily comprises small and medium-sized businesses, will see the highest growth, at a CAGR of 66%, the report said. The segment will grow from $45 million in 2008 to $565 million by 2013. This market is expected to swell from 5% to 30% of the total geotargeted market over the same period.

BIA/Kelsey anticipates that geotargeted display advertising will soon be sold alongside geotargeted search advertising as reseller sales forces look to localize the current glut of banner ad space in efforts to improve their economics and diversify their interactive revenue streams.

Matt Booth, SVP and Program Director, BIA/Kelsey, says "The basis for growth of the geotargeted ad market is rooted in the economics of existing search resellers... effective strategy for companies... will be to use geotargeting to increase margins by shifting spend from paid search to geodisplay... where similar quality leads can be obtained for less."

Booth noted that the display ad networks have so much excess inventory, they will run whatever impressions are needed to meet reseller targets.

GeoTargeted & Display Ad Market Forecast (US $ in Millions; CAGR @ 16.0%)
Year	Geotargeted Ad Market ($MM)	Display Ad Market ($MM)
2008	$897	$8,795
2009	1,046	8,713
2010	1,183	9,316
2011	1,390	10,372
2012	1,625	11,528
2013	1,884	12,557
Source: BIA/Kelsey, November 2009

 

Local & National Geotargeted Display Ad Market (Million $)
Year	Local ($MM)	National ($MM)
2008	$45	$852
2009	105	941
2010	177	1,006
2011	278	1,112
2012	406	1,219
2013	565	1,319
Source: BIA/Kelsey, November 2009

Another growing trend in the online marketing arena is Behavioral Targeting (retargeting), online targeted advertising delivered to consumers based on previous Internet actions that did not result in a conversion.

A previous SEMPO/Advertise.com study showed that only 30.5% of the marketers surveyed had tried remarketing with online advertising, and 51% of them said it was "impactful."

The same study found that remarketing, also known as retargeting, topped the list of most under-utilized marketing technologies. (% "underutilized" responses)

• Remarketing/Retargeting... 46.3%
• Geo-targeting... 18.3%
• Traffic source optimization... 15.9%
• Keyword targeting... 13.4%
• Other... 3.7%
• Category targeting... 2.4%

Daniel Yomtobian, founder and CEO of Advertise.com, reported that "... retargeting can boost ad response up to 400% so it's definitely something online advertisers need to stay informed about and use more strategically."

Finally, according to btobonline, a hearing held last month by U.S. House of Representatives' Subcommittees on Commerce, Trade and Consumer Protection and Communications, Technology and the Internet, questioned whether marketers were collecting too much information about prospects that they may be using to conduct behavioral marketing. Though there is no verdict yet on whether a privacy bill will be introduced as expected, the b2b conclusion is that "...e-mail marketers doing behavioral targeting should make sure they are doing it right."

In the post, Stefan Pollard, senior strategic consultant at Responsys, cautions that "...prospects might find it creepy if you show you know too much about them... If someone took the time to research articles about something but didn't download... sending them a link... is probably fine as long as you don't make that hard-line connection between his or her previous research and the (link)."

Pollard continued, "... you don't need to send an immediate response unless someone takes action... Otherwise... take a day or two to follow up."

For additional information from B2B, please visit here. For more from SEMPO/Advertise, go here. And for more about the BIAKelsey study, please go here.