Location-Based Mobile Ads To Reach $4.5 Billion This Year

Spending on location-targeted mobile ads will increase 55% from $2.9 billion in 2013 to $4.9 billion this year, and reach $15.7 billion in 2018.

During that five-year span, the share of overall mobile ad revenue earmarked for location-targeted campaigns will increase from 40% to 52%. As a portion of total U.S. ad spending, it will jump from 2.2% to nearly 10%. All stats are per a new forecast by local media research firm BIA/Kelsey.

Since its last forecast in November, BIA/Kelsey has raised its outlook for U.S. mobile advertising, projecting a more than fourfold rise from $7.2 billion in 2013 to $30.3 billion in 2018. The higher forecast is a result of guidance from mobile ad networks and ad share leaders, such as Google and Facebook.

Driving the upswing in location-targeted advertising are factors including growing demand, performance and resulting increases in mobile ad rates. The category is also benefiting from wider adoption of location-based tactics like geo-fencing, click-to-call and click-to-map by national advertisers, who account for the bulk of mobile ad spending.

Small- and medium-sized businesses have been slower to embrace localized advertising because of budget and resources constraints and less technology expertise. Still, increasing tech-savvy and access to self-serve platforms like Google AdWords and Facebook will help SMBs increase their share of location-focused advertising.

Looking at formats, search is expected to account for the lion’s share of location-targeted mobile advertising, at $2.5 billion followed by display ($1.1 billion), native/social ($499 billion), video ($317 million) and SMS ($110 million).

In addition to interviews and company reports, BIA/Kelsey says its mobile forecast is based on usage trends, mobile ad spending across formats, consumer adoption patterns and ad performance measurements, among other data. Projections do not include promotional expenditures such as coupons.

The firm defines location-targeted advertising as campaigns that are geographically targeted for user impressions or engagement within specific locations. In addition, ads with location-specific copy or calls-to-action also fit within this definition. 

2 comments about "Location-Based Mobile Ads To Reach $4.5 Billion This Year".
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  1. Chris Nosky from The Marketing Grid, April 11, 2014 at 8:59 a.m.

    Zip Code level targeting breaks the U.S. into 40,000+zones, however there can be drastically different demographics within each zip code. This generally means that the zip code solutions are currently used for low cost remnant inventory or as filler in campaigns.
    Over the past year The Marketing Grid has been working with our partner Semcasting who has been working on ways to reinvent online advertising targeting as it is currently defined. Our design objectives were to dramatically improve the precision of the digital ad targeting, increase the reach of campaigns to near 100% coverage, while still adhering to all privacy and Do Not Track guidelines. The result is Smart Zones.

    Smart Zones is a breakthrough audience identification platform that maps nearly 100% of online traffic into qualified, target ready audience while protecting user privacy. Smart Zones is the first compiled demographic database for the Internet.

    Smart Zones segments the U.S. Internet into 46 million zones (27 million consumer and nearly 19 million business), creating more granular targeting than zip code level targeting that is typically used for the 65% of remnant inventory. It proves a tremendous advantage over traditional zip code demographic targeting in that it triples the reach of most campaigns while ensuring exposure to prospective consumers who actually meet the targeting criteria.

    For example in zip code 01810, Andover MA, the average income is $155,000. Using Smart Zones, 01810 can be broken in 28 demographically qualified zones that each reveals very different incomes from the zip code average. For example in one zone in Andover there are 30 individuals with an average income of 98,000, well below the zip code average, while another zone across town there is a zone with 28 people who have an average income of $252,000. Having this information as part of the targeting methodology allows companies to more accurately identify their best prospects and suppress the worst – at a sub-zip code level.

    Smart Zones maintains the highest standards of online privacy and complies with "Do Not Track". There is no application or usage of cookies or tracking pixels. There is no communication, linkage, or access to personally identifiable information – making Smart Zones 100% privacy friendly.

    Through Smart Zone's 27 million+ target ready consumer zones with more than 70 million demographic combinations an average of 600 times more accurate targeting resolution is achieved with 3 times the coverage of any cookie dependent alternative.

  2. Anni Paul from BoscoSystems, April 15, 2014 at 2:46 a.m.

    Location means relevance, and relevance is the life blood of effective mobile advertising. It's good to see that this understanding has become more pervasive throughout the industry. And despite conventional wisdom, mobile consumers are actually not as resistant to mobile ads (pertinent ones, at least) as many believe... http://www.airpush.com/how-consumers-are-driving-a-new-acceptance-of-mobile-advertising/

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