A new study released by The Kelsey Group indicated that US-based local mobile search advertising will hit $1.3 billion by 2013- up from just $20 million in 2008, which shows a more than 130% growth rate.
This outpaces overall mobile advertising considerably, according to the study, which will grow to nearly $3.1 billion in 2013 from $160 billion in 2008- representing just an 81% increase. This data includes display and general search advertising which is slowing considerably compared to areas such as SMS-advertising.
As 2009 becomes a year for limited mobile marketing growth overall, as it is in most industries these days, mobile local search will likely fall alongside SMS as a method of advertising that remains effective and efficient as companies tighten their belts.
Currently, an estimated 54.4 million, or roughly 20% of all US cell subscribers, are using the mobile Web- and only 5.2 million are doing searches of any kind. As the most prevalent mobile data service today, SMS still claims the lion’s share of mobile advertising- $100 million of the $160 million last year, compared to $39 million for search. But in five years, Kelsey expects that proportion to be flipped, with search claiming two-thirds of the $3.1 billion in mobile ad spending.
“Local mobile search revenue is actually the fastest-growing curve we have,” said Michael Boland, program director for Kelsey’s newly formed unit focusing on mobile local media. “That’s a combination of more search activity that’s local, but also the fact that CPC rates, and other ways mobiles ads are sold, are going to be higher than overall search because of that local targeting which commands a premium.”
Local mobile search, like SMS, provides the highest ROI possible by way of letting advertisers only pay for actions that earn them customers, clicks, impressions, etc. The highly-targeted aspect of local-based search advertising allows local brands to spend their precious ad-budgets wisely, which is important for small businesses that have very limited budgets compared to the big guys.