Berg Insight estimates in a new report published this week that mobile location-based service (LBS) revenues in Europe are estimated to grow at a compound annual growth rate (CAGR) of 25.8 percent through 2018.
While not as impressive, the North American LBS market is projected to grow as well, in this case at a CAGR of 16.1 percent from 2013 through 2018.
The main growth will come from increasing ad revenues in the social networking and local search segments, Berg projects.
Berg Insight estimates that about 50 percent of all mobile subscribers in Europe were frequent users of at least one location-based service at the end of 2013. In North America where adoption of GPS-enabled handsets is still somewhat higher, an estimated 60 percent of all handset users now access location-based services at least monthly.
The social networking and entertainment category has now become the largest LBS segment both in terms of number of active users and revenues. Local search is now the second largest LBS category in terms of active users and the third largest in terms of revenues.
“Advertising is the main source of revenues for most consumer oriented LBS,” said André Malm, a senior analyst at Berg Insight.
Malm, however, adds that the increase in the number of active users and usage of LBS has now also resulted in significant revenue growth.
“Revenues are however far from evenly distributed as major players including Facebook and Google with broad audiences have attracted the majority of ad spend,” Malm concludes.
