Report: Mobile Advertising To Reach $790 Million In 2010

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U.S. mobile advertising this year will reach $790 million in 2010, up more than 50% from $491 million in 2009, according to a new forecast from media research firm BIA/Kelsey. It expects mobile advertising to grow at a 43% annual rate for the next five years, hitting $2.9 billion in 2014. To put that in perspective, that's less than half the $6 billion Google is said to be bidding for Groupon.

Mobile search ad revenue is projected to grow especially fast in the coming years, surging from $163 million this year to $1.6 billion in 2014. Mobile display will increase at a slower clip of 31% annually, from $356 million now to $803 million in four years. And SMS text advertising will more than double over that period from $271 million to $562 million, growing at a 20% rate each year.

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The BIA/Kelsey forecast envisions local playing an especially key role in mobile advertising, accounting for about $2 billion of the $2.9 billion total by 2014. The firm defines local mobile advertising as that "targeted at a user's location and/or actionable locally." This year, local will amount to an estimated $404 million in mobile ad dollars, divided across each of the three main formats of search, display and SMS.

"We expect to see more bundling of mobile advertising by digital and local media companies, in an effort to lower the barriers for adoption by small and medium-sized businesses," said Michael Boland, program director, BIA/Kelsey, in a statement. That shift will bring more local businesses into the mobile ad market and increase the share of geotargeted ads, according to the firm.

Google in October said its mobile revenue had reached an annualized run rate of $1 billion, but didn't break out that figure by ad format or any other way. But Boland points out that this represents a worldwide (rather than U.S.-only) total and includes non-ad revenue such as any revenue from its Android Market app storefront.

The BIA/Kelsey estimate for mobile advertising in 2010 is roughly in line with the eMarketer projection of $743 million. The company pushed up its previous 2010 estimate of $593 million in the wake of Google's acquisition of AdMob and Apple's introduction of the iAd, which alone drew a reported $60 million in upfront spending by major brand advertisers. eMarketer's projected total of $2.5 million by 2014 is also in the ballpark of BIA/Kelsey's outlook.

 

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