Location-Based Mobile Ads Forecast To Hit $10.8B In 2017

by Gavin O'Malley @mp_gavin, January 16, 2014

Delivering on mobile’s full potential, location-based ad targeting is finally ready for the big time.

By 2017, spending on location-targeted mobile advertising will reach $10.8 billion, which would represent a 52% share of all mobile ad dollars.

That’s according to a new forecast from BIA/Kelsey, which reports that marketers spent $1.4 billion on location-targeted mobile campaigns in 2012.

More remarkable, however, is the finding that post-engagement attribution tracking is “already here as a competitive imperative for mobile advertisers, publishers, networks and ad tech providers,” Mike Boland, vice president of content, at BIA/Kelsey, told Mobile Marketing Daily.

“Smartphone penetration combined with myriad behavioral and location signals enable better attribution, while advertiser demand for tighter ROI further compels it,” Boland explained. “Tying conversions back to specific ad campaigns is the holy grail of advertising, which will make campaign attribution the mobile battleground of 2014.”

Still, BIA/Kelsey’s forecast is extremely optimistic, considering the nascent state of location targeting and arguably, attribution methods. For example, mobile ad network Thinknear by Telenav recently compared ad exchange-supplied location data with its own location data and found that 26% of exchanges reported locations that were off by more than 10,000 meters. Brands hoping to connect with consumers in a particular retail location would fail miserably a quarter of the time.

These and similar findings partially explain why mobile still only sees 3% of ad dollars, while U.S. consumers currently spend about 12% of their “media time” on mobile devices, according to BIA/Kelsey.

Worldwide, Juniper Research recently predicted that spending on smartphone and tablet advertising and marketing programs would grow from $13.1 billion in 2013 to 39.3 billion in 2018.

In the Juniper report, author Sian Rowlands noted: “By harnessing Big Data and location information, mobile ads are being better targeted to users.”

Attribution -- the marketing model that attempts to attribute sales to multiple touchpoints rather than the last ad consumers click or view -- remains a sore point for many brands and agencies.

It is a problem that Chris Knoch, vice president of Strategic Solutions at attribution expert IgnitionOne, knows all too well. “I think people want to kill [attribution] because it’s getting more complicated,” recently told OMMA conference attendees. “If you’re still doing last-click attribution, you are light years behind!”

ad targeting, advertising, behavioral targeting, local media, location-based, marketing, mobile

4 comments about "Location-Based Mobile Ads Forecast To Hit $10.8B In 2017".

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Mike Skladony from Semcasting, Inc., January 17, 2014 at 12:15 p.m.
I'd be willing to bet that it's significantly more than 26%, unless it's in app or tied to wi-fi....test it yourself...connect to 3g or 4g and go to whatismyip.com and see where they have you pegged.
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Anni Paul from BoscoSystems, January 17, 2014 at 6:20 p.m.

Geolocation and targeting will be as important to mobile advertising this year as relevant messaging and native advertising. I don't care how much people profess to hate ads, when they are relevant and well-targeted, they're seen as "invitations" not annoying disturbances to digital content disruptions. http://www.airpush.com/how-consumers-are-driving-a-new-acceptance-of-mobile-advertising/

Jeff Zwelling from Convertro, January 22, 2014 at 3:01 p.m.

Great article, Gavin, but marketers shouldn’t rely on location-based ads too much. A prediction of $10.8 billion is impressive and these ads certainly have their place in the industry, but they aren’t a fool-proof answer for every client. Each campaign is different, and it takes a lot of research and calculation to determine what combinations and strategies will work best for each brand. Marketers need to implement all the resources and tools at their disposal to get a clear picture of the results each channel is generating. For example, attribution tracking offers an accurate and well-rounded analysis of the full scope of a campaign, ensuring companies aren’t wasting their budgets on one method just because it’s the latest trend. Location-based ads might be popular now, but additional research might show a brand that TV commercials or display ads will actually be more effective for their campaigns. In the end, it’s all about ROI, and that’s something each individual brand needs to measure for itself.

Jeff Zwelling
CEO and co-founder of Convertro

Kavin I from Independent, June 2, 2014 at 12:43 a.m.

Nice article. Great to see location based advertising becoming big for marketers and consumers alike. Even nicer to see the numbers to complement popular opinions. But as for large scale adoption I think we're still way behind. Limited reach (target market wise), Privacy issues and confusion over messaging are still niggling issues. I read a great post on Location based targeting and though I's share the same here for all to consume. http://bit.ly/1gWbgcg