Locally targeted mobile ads will represent more than half of overall U.S. mobile ad spending by 2018, largely driven by local marketing initiatives of national advertisers
CHANTILLY, Va. (April 10, 2014) – U.S. mobile local advertising revenues will reach $4.5 billion in 2014, up from $2.9 billion in 2013, according to BIA/Kelsey, advisor to companies in the local media industry. In its Annual U.S. Local Media Forecast (2013-2018), the firm projects mobile local ad revenues to more than triple over the next five years, reaching $15.7 billion in 2018.
According to the forecast, total U.S. mobile ad spending will grow from $11.4 billion in 2014 to $30.3 billion in 2018. By the end of the forecast period, locally targeted mobile ads will represent 52 percent of overall U.S. mobile ad spending.
Driving this localized share of mobile ad revenues is the adoption of mobile local advertising tactics (i.e., geo-fencing, click-to-call, click to map) by national advertisers, who currently account for most U.S. mobile ad spending, and who are expected to take advantage of increasingly available and currently undervalued mobile local ad inventory.
“Advertiser demand will be driven by natural market forces to follow undervalued inventory,” said Michael Boland, senior analyst and VP of content, BIA/Kelsey. “Mobile advertising’s appeal includes higher performance, clearer ROI, tangible conversions and a shorter purchase funnel. These qualities of mobile content and advertising present a rare alignment between typical mobile user intent and advertisers’ stated objectives.”
National-to-local mobile marketing is a focus of BIA/Kelsey’s upcoming conference, LEADING IN LOCAL: The National Impact, which takes place May 7-9, in Atlanta. During a Day 2 session titled, “Location Targeting: The Brand Impact,” publishers and advertisers will discuss the types of ad placements and localized calls to action that are most effective at engaging location-sensitive mobile users.
Mobile Local Media Forecast by Format
This forecast comprises various mobile ad formats, including textual search, display, video, commercial SMS and native social advertising. Search advertising currently holds the largest share, followed by display and native social ads. Search’s dominant share indexes higher within this localized segment than within the broader of U.S. mobile ad revenue total, due to the high correlation between mobile search and local user intent. There is conversely a lower percentage of localization within the display category, due to the branding (as opposed to direct response) and reach-driven objectives inherent in display campaigns (i.e., in-app ads).
The forecast includes a breakdown of mobile local ad spending by format as follows:
- Search (advertising applied to search queries on mobile devices) will grow from $4.3 billion in 2014 to $10.9 billion in 2018.
- Native social (visual and textual brand messaging merged into organic feed-based interfaces of mobile social apps such as Facebook and Twitter) will grow from
$3.3 billion in 2014 to $9.9 billion in 2018.
- Display (display advertising applied to app and mobile Web inventory) will grow from $2.4 billion in 2014 to $6.1 billion in 2018.
- Video (rich media ad units distributed within app and mobile web inventory) will grow from $1.1 billion in 2014 to $3.1 billion in 2018.
- SMS (commercial SMS messaging) will grow from $332 million in 2014 to $381 million in 2018.
BIA/Kelsey custom advisory service clients can log into the client resource center to download the full mobile media forecast.
About the Annual U.S. Local Media Forecast
BIA/Kelsey defines the local media advertising marketplace as those media that provide local audiences to all types of advertisers. Mobile local advertising is defined as advertising that is targeted based on a user’s location.
BIA/Kelsey’s Annual U.S. Local Media Forecast (2013-2018) draws from multiple sources. These include proprietary data – company, industry and country information in the public domain – as well as discussions with clients and non-clients about the direction and pace of development in the local media marketplace. The forecast is issued annually each spring and updated in the fall. BIA/Kelsey custom advisory service clients receive a full forecast report. For information on gaining access to the forecast as a BIA/Kelsey client, or for details on purchasing the forecast, contact Steve Passwaiter at firstname.lastname@example.org or (703) 818-2425.
BIA/Kelsey advises companies in the local media space through consulting and valuation services, research and forecasts, Custom Advisory Services and conferences. Since 1983 BIA/Kelsey has been a resource to the media, mobile advertising, telecommunications, Yellow Pages and electronic directory markets, as well as to government agencies, law firms and investment companies looking to understand trends and revenue drivers. BIA/Kelsey’s annual conferences draw executives from across industries seeking expert guidance on how companies are finding innovative ways to grow. Additional information is available at http://www.biakelsey.com, on the company’s Local Media Watch blog, Twitter (http://twitter.com/BIAKelsey) and Facebook (http://www.facebook.com/biakelsey). Stay connected by subscribing to the firm’s bi-monthly newsletter.
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