Geo-Targeted Mobile Ad Revenues To Reach $18.2 Billion By 2019
BIA/Kelsey’s study shows local mobile ad spend is rising significantly — which points to the growing importance of accurate, first-party location data.
The spike in mobile ad spending has been well-documented — revenues climbed to $12.5 billion in 2014 according to the IAB — and BIA/Kelsey’s projections find mobile as a whole grabbing 11.5 percent of total local media revenues over the next four years.
In a sense, location-based advertising has been a primary driver of mobile — and in turn, has been lifted by marketers’ general attraction to capturing consumers’ smartphone screens.
To put that point in wider context, mobile has been playing a complementary role to PC-based ads for the better part of a decade. But as consumers’ time-spent with their portable devices has exploded, ad spending is finally starting to follow.
And that is what is going to continue to propel mobile ads even as the larger online ad world begins to mature and growth cools, said Mark Fratrik, BIA/Kelsey’s chief economist.
“Online spending is growing on ads viewed through desktops, but general online ad unit pricing faces headwinds as the attention of audiences and advertisers alike drifts more towards mobile,” said Mark Fratrik, BIA/Kelsey’s chief economist. “Online will gain just a few points of local advertising market share, as mobile nearly triples its share.”
Location Isn’t Just Local
The increase in location-targeted mobile ad dollars can be attributed to the eagerness of both national advertisers and small-to-medium sized businesses to reach customers on a hyperlocal level. More big-box retailers are employing mobile ad tactics like geo-fencing and click-to-map, while SMBs are increasingly tapping into mobile ad tools like Google AdWords and Facebook.
Geo-Data Is The ‘Killer App’
“Location targeted advertising and data give the broader mobile advertising industry a sort of killer app,” said Mike Boland, BIA/Kelsey’s chief analyst and VP of content. “Like any killer app, it is the application of that broader media or technology to a specific area where it shines most.
“We know from years of data that mobility correlates to location relevance,” he added. “That plays out in technical capacity (GPS chip, portability, etc.) and also in user intent. For the latter, we know that half of mobile searches are local, and other metrics that support mobile users’ greater intent to transact when mobile.”
Add that all together and it compels location targeting strategies for content and ads, Boland noted. And it’s not just where the ad shows up but what it contains — location specific ad creative or calls to action can further embolden the location relevance of a given message.
For marketers to be able to deliver relevant, location-targeted campaigns at scale, they will need the data to back it up. That means that accurate, first-party geo-data will only continue to continue to grow in importance — and companies will be seeking the best possible providers.
Local Programmatic’s Rise
Another key consideration is the growth of programmatic. MediaPost reports that it’s likely that a portion of this increased local mobile spend will come through programmatic channels, making it easier for local businesses and SMBs to access mobile platforms. Borrell Associates also predicted in a report released this week that 10 percent of programmatic ad spending will go toward local display.
As the rise in location-based mobile ad spend, and the transfer of spending to programmatic occur concurrently, marketers have the opportunity to deliver relevant, targeted messages to consumers in real time. This is important for capturing consumer’s attention today, as shoppers increasingly expect deals and information customized to them, based on their location as well as other contextual factors.
“We live in an on-demand culture, conditioned by the mobile device to get whatever we want, whenever we want it,” Boland said. “As always, advertisers are slower to adopt new technologies on the whole, so it will take much growth and development —and dollars —to catch up with consumer usage patterns. In the middle somewhere are innovative ad networks and ad tech providers such as YP and xAd that are accelerating advertiser adoption. There is tremendous growth to come as demand (ad dollars) catches up with supply (consumer usage and ad inventory) for location targeted content.”