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BIA/Kelsey Forecast: U.S. Mobile Local Ad Revenues to Reach $9.1 Billion in 2017
Chantilly, VA - Apr 4, 2013 - BIA/Kelsey forecasts U.S. mobile local advertising revenues to grow from $1.2 billion in 2012 to $9.1 billion in 2017, representing a compound annual growth rate (CAGR) of 49.3 percent. This corresponds to a 0.9 percent share of local media ad revenues in 2012, growing to a 6.1 percent share in 2017, according to the firm's recently released U.S. Local Media Forecast (2012-2017).
BIA/Kelsey's projected mobile local ad revenues represent a subset of total U.S. mobile ad spending, which the firm forecasts to grow from $3.2 billion in 2012 to $16.8 billion in 2017. This puts locally targeted mobile ads at 38 percent of overall U.S. mobile ad spending in 2012, growing to 54 percent in 2017. Several factors will drive the "localized" share of U.S. mobile ad revenues, including:
■ Large brand advertisers will increasingly adapt their campaign objectives to the capabilities of the mobile device due to effective, abundant, and currently undervalued mobile local ad inventory.
■ Mobile advertising will move down market to the SMB segment through a combination of self-serve tools and local media direct sales channels.
■ Premiums that develop for location-targeted ads will compound ad volume growth.
■ Innovation will increase among ad networks and ad tech providers (i.e., enhanced campaigns).
The forecast comprises advertising placed in mobile search, display, video and commercial SMS. Search advertising currently holds the largest share, followed by display and SMS. 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:
■ Display (display advertising applied to app and mobile Web inventory) will grow from $379 million in 2012 to $2.7 billion in 2017.
■ Search (text advertising applied to search queries on mobile devices) will grow from $704 million in 2012 to $5.7 billion in 2017.
■ SMS (commercial SMS messaging) will grow from $101 million in 2012 to $162 million in 2017.
■ Video (rich media ad units distributed within app and mobile web inventory) will grow from $38 million in 2012 to $515 million in 2017.
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