On Thursday, BIA/Kelsey issued a new forecast which suggests that U.S. mobile local advertising revenues will grow from $1.2 billion in 2012 to $9.1 billion in 2017.
Should these numbers manifest, it will represent a compound annual growth rate (CAGR) of 49.3 percent.
According to the firm’s recently released U.S. Local Media Forecast (2012-2017), total U.S. mobile ad spending will 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.
Today’s report, however, notes that 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).
“Though inventory growth currently outpaces advertiser demand, we believe the latter will begin to accelerate,” says Michael Boland, senior analyst and director of content at BIA/Kelsey. “This will not only increase overall mobile ad spend, but mobile ad rates such as CPMs and CPCs, which are currently lower than desktop equivalents, due to inventory oversupply.”