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Search Will Drive Local Mobile Ads To $9 Billion By 2017

Megaphone-A3Text advertising applied to search queries on mobile devices will increase from $704 million in 2012 to $5.7 billion in 2017, according to a report released Thursday. This growth will occur because voice commands will make the size of the screen irrelevant.

Search advertising currently holds the largest share of mobile local ad spending, followed by display and SMS, according to a BIA/Kelsey report that breaks down mobile local ad spending by format.

Display advertising in apps and on the mobile Web will rise from $379 million in 2012 to $2.7 billion in 2017. SMS messaging will grow from $101 million in 2012 to $162 million in 2017, and video from $38 million to $515 million, respectively.

The forecast estimates that U.S. mobile local advertising revenue will reach $9.1 billion in 2017 -- up from $1.2 billion in 2012, representing a compound annual growth rate (CAGR) of 49.3%. The analyst firm estimates mobile local ad revenue will represent $16.8 billion in 2017, a portion of U.S. mobile ad spending. This puts locally targeted mobile ads at 38% of overall U.S. mobile ad spending in 2012, rising to 54% in 2017.

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Search on engines, social and apps will dominate mobile through voice. The size of the screen and the device will become a non-issue, especially with technologies like Nuance voice ads hitting the market.

The company announced on April 1 a mobile advertising format that enables people to have a two-way conversation with the brands they love. And it gives consumers a say in the way brands advertise to them. In March the company announced that Panasonic's lineup of Smart Viera HDTVs would feature voice capabilities powered by Nuance's Dragon TV. With Dragon TV's text-to-speech, television content and options on the screen can be read aloud.

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