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Forecast: U.S. Mobile Ad Market Take Will Be 70 Local by 2015

CHANTILLY, VA.: BIA/Kelsey today released its five-year outlook for U.S. mobile local advertising. According to the firm, total U.S. mobile ad spending will grow from $790 million in 2010 to $4 billion in 2015. During the same period, BIA/Kelsey projects the local portion of that total to increase from $404 million to $2.8 billion, making locally targeted mobile ads 51 percent of overall U.S. mobile ad spending, growing to 70 percent by 2015.

BIA/Kelsey defines mobile local advertising as that which targets users in specific locations or contains location-specific calls to action. Smartphones and mobile Web usage will drive the phenomenon “as large brand advertisers evolve their campaign objectives to the capabilities of the mobile device--most notably, location awareness,” BIA said.

The firm also sees mobile advertising moving down market to small and medium-sized businesses through a combination of local sales and self-serve tools. Increasing use of mobile media, clearer ROI and a shorter purchase funnel will accelerate a demand within display, search and SMS advertising formats, the company predicts. There is no mention of the potential for Mobile DTV, which may actually launch this year.

The Mobile500 Alliance of 420 TV stations recently announced plans to launch the service in the fourth quarter of this year. The group said it was seeking partners and investors for the effort, and hopes eventually to offer up to 20 channels. Mobile DTV is up against entrenched wireless providers who have bulk-buying power in the handset market and can feasibly freeze out reception chipsets. The Alliance has conveyed its market concerns to federal regulators. Meanwhile, the local pie grows, according to the BIA folks.

“Revenues will grow from not only ad volume, but also premiums placed on location-targeted ads,” said BIA/Kelsey’s Michael Boland. “These premiums result from higher performance for locally targeted mobile ads when compared with non-local ads, due to higher relevance, immediacy and consumer buying intent, all of which are more prevalent in mobile than many other print and digital media.”

~ Deborah D. McAdams