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Geo-Data Is The Hub Of ‘Power Brew’ Including Local Mobile, Social, Video Ad Spending

Location-targeted mobile ad spending is expected to rise 34.5 percent in 2016, says BIA/Kelsey, driving up the wider local ad marketplace.

BIA/Kelsey's Mark Fratrik
BIA/Kelsey’s Mark Fratrik

Local advertising expenditures in the U.S. will rise a decent 3.75 percent next year, driven yet again by the year’s long surge of online/digital dollars, which will jump 12 percent to $42.6 billion in 2016, according to projections by BIA/Kelsey. (Read the release)

And the primary spending propelling it all is the use of place-based data to target ads, the forecast numbers show. Specifically, geo-targeted mobile ad spending will leap 34.5 percent to $11.3 billion in 2016 from $8.4 billion in 2015.

“The ability to reach customers with an ad message when they’re within a two-block radius of your store is remarkable to local businesses developing their mobile ad strategy,” Mark Fratrik, chief economist, for BIA/Kelsey, told GeoMarketing. “They’re taking advantage of that.”

By next year, digital will comprise 29.1 percent of total local media revenues, up from $38 billion in 2015. BIA/Kelsey defines local advertising as all advertising platforms that provide access to local audiences for national, regional, and local marketers.

“For 2016, we expect total local ad revenues to nudge upward, resulting from a slightly stronger U.S. economy and a substantial amount of political advertising,” Fratrik said. “We also adjusted our 2015 estimate for total local media spending up slightly due to stronger mobile and social advertising.”

Overall, local ad dollars will amount to $146.6 billion in 2016, BIA/Kelsey is projecting, thanks to what it calls a “power brew” of mobile, social, and video advertising designed largely get people to shop at nearby business establishments.

Topline findings from BIA/Kelsey’s 2016 forecast include:

  • Social local media revenues will grow from $2.4 billion in 2015 to $3.3 billion in 2016
  • Local search revenues will grow from $7.8 billion in 2015 to $8.2 billion next year
  • Total local display revenues will grow from $4.4 billion in 2015 to $4.6 billion over the next 12 months
  • Local video display revenues will grow from $0.7 billion in 2015 to $0.9 billion in by the end of ’16

In a survey published by BIA/Kelsey in August, the local analyst found that SMBs were spending more money on social media than any other category, including mobile, though there is tremendous overlap between the two. About 72.2 percent of survey respondents in BIA/Kelsey’s Local Commerce Monitor, an ongoing insights report, say they’re using at least one of the 12 different social media platforms/formats. Overall, SMBs tell the local market researcher that they spend 23.3 percent of their advertising/marketing budget on social media.

“For the most part, SMBs are developing a true media mix of mobile, social, and layering both with video,” Fratrik said. “And, of course, all of those channels have a an added, natural location component, particularly when it comes to social and the sharing of places and check-ins. And those trends appear to be continuing. It started with national advertisers, but now, the same things are happening at the local SMB level as well.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.