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BIA/Kelsey: Mobile Ad Spend to Reach over $32 Billion in 2021 - TvTechnology

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'
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Here’s what the BIA/Kelsey folks said today from CHANTILLY, VA.—A 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 smartphone’s location-tracking 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.”
“But many 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 locality, the 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.