BIA/Kelsey: Mobile Ad Spend to Reach over $32 Billion in 2021
Says 'location-targeted ad spend will be 45 percent of overall mobile ad revenues by 2021'
January 24, 2017
Here’s what the BIA/Kelsey folks said
new BIA/Kelsey Industry Watch report explores
one of the fastest
growing areas of location-targeted media:
mobile. According to BIA/Kelsey
estimates, annual U.S. mobile ad spending will grow from $33 billion in
2016 to $72 billion by 2021, a 17 percent
compound annual growth rate. The
location-targeted portion of that overall mobile
ad spend is projected to grow
from $12.4 billion in 2016 to $32.4 billion in
2021. This growth translates to
38 percent of overall mobile ad revenues today,
growing to 45 percent by 2021.
One of the biggest mobile success factors for
local mobile is
native thinking, which involves building
content, apps and ads that fit the
device’s unique form factor, rather
than porting formats from legacy media. The
abilities and portability, combined with users’
transitory behavior, make location-targeted
content a natural fit.
“The smartphone revolution turns ten this
year, and we’ve come a long way,” said
Mike Boland, chief analyst of
BIA/Kelsey and author of the report, “Getting to $72 Billion: BIA/Kelsey’s Mobile Ad Revenue Forecast.”
are far behind,
still operating with a desktop mindset.
They’ll be left behind the
next era of mobile, defined by native-social,
voice interfaces and
multimedia, not banner ads and traditional
search,” he said.
In addition to segmenting mobile ad spend by its
report also reveals BIA/Kelsey’s
estimates for each mobile ad format including
search, traditional display, messaging, video
and native-social. Search
has long maintained a top position but is slowly
losing share to emerging
formats like native-social.
Native-social ads are expected to derive $10.2
billion in 2016 and
grow to $24.2 billion in 2021. This growth stems
from the format’s advantages,
high performance and resulting demand. For
example, mobile screens lack real
estate for traditional top and side banner ads
that ruled the desktop web. A
vertically scrolling feed (a la news feed)
conversely holds greater capacity
for ad inventory.
The mobile forecast covered in
the report mirrors BIA/Kelsey’s
cross-media U.S. Local Advertising Forecast for
2017 that covers 12 media. The forecast defines
location-targeted ads as those
that are targeted based on a user’s
location or include proximity-relevant
content to trigger local offline conversions.