BIA/Kelsey estimates advertisers will spend $5 billion more on video to target local audiences by 2021, reaching $37.6 billion, compared with 2016, with most of the growth coming from digital video and local TV. The predictions from the analyst firm confirms a trend identified in a report scheduled for release Friday by Positive Mobile, a mobile video supply side platform based in Tel Aviv.
The percentage of local mobile video ads served with location-based targeting jumped from 5% in the second quarter in 2016 to 17% in the fourth quarter of the same year, according to Positive Mobile.
Positive Mobile CEO and founder Tzahi Stein believes the entire mobile video market will grow as a category, mainly being sold through programmatic channels, while adapting the user experience to mobile native formats.
The main reason why the industry will see a rise in mobile video ad targeting based on location is because the targeting supports a variety of high profile verticals like retail, telecom, political, car dealerships and more. This year marketers can expect marketers to spend more on verticals like automotive as budgets in that category shift to digital video and mobile video shows strong growth.
Throughout the year, events like the Super Bowl, Olympics and the Holidays kept CPG companies producing and targeting mobile video ads. In the food category, investments rose to 27.3%, up from 11.6% during the third quarter of 2016.
Cisco analysts believe these numbers and others like them will only increase in the coming year as technology such as 5G rolls out. Thomas Burnett, director of service provider marketing and thought leadership at Cisco, believes the commercial rollout of 5G slated for 2020 will lead to higher bandwidth, enabling video to be delivered even faster.
Cisco Mobile VNI estimates that video will consume 78% of global mobile data traffic by 2021, compared with 60% at the end of 2016.
All this will lead to substantial growth for location-based mobile ad targeting. "Ultimately, advertisers will compare the effectiveness of mobile ads/marketing versus other forms of advertising (e.g., TV, radio, in-store promotion, etc.) and adjust their advertising focus and budgets accordingly based on costs and results," according to Burnett.