Analyst Firm Forecasts Mobile Local Ad Revenues Will Grow To $9.1 Billion In The Next Four Years

Multi-Device UsageLocal media analyst firm BIA/Kelsey forecasts U.S. mobile local advertising revenue will grow from $1.2 billion in 2012 to $9.1 billion in 2017, experiencing a compound annual growth rate (CAGR) of 49.3 percent.

“Though inventory growth currently outpaces advertiser demand, we believe the latter will begin to accelerate,” said Michael Boland, senior analyst and director of content at BIA/Kelsey. The outcome of such acceleration will be increased over all mobile ad spending along with increased mobile ad rates, including CPMs and CPCs.

Defined as advertising that is targeted based on a user’s location, local mobile ads represented 38 percent of the $3.2 billion national mobile ad revenue for 2012. BIA/Kelsey predicts national ad revenues will grow to $16.8 billion in 2017 with mobile local ad growth representing 54 percent of overall growth.

Local vs National mobile ad spend BAI Kelsey

The projected numbers include ads in mobile search, display, video and commercial SMS. The largest share of mobile local ads belongs to mobile search, due in part to the high correlation between mobile search and local user intent. According to BIA/Kelsey, mobile display ads have less localization because of the branding and reach-driven objectives that are inherent in display campaigns.

Share of Mobile Local Ad spend by Format BAI Kelsey

One driving force for this dramatic growth includes large brand advertisers adapting campaigns to the improved capabilities of mobile devices, taking advantage of the effective, abundant and currently undervalued mobile local ad inventory. Other factors include mobile advertising moving down market to SMBs, premiums resulting from location-targeted ads that will compound ad volume growth, and innovation among ad networks and ad tech providers.

Related Topics: Channel: Strategy | Mobile Marketing | Statistics: Mobile Marketing | Statistics: Online Advertising | Statistics: Spend Projections

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About The Author: is Third Door Media's General Assignment Correspondent, and reports on the latest news and updates for Marketing Land and Search Engine Land. From 2009 to 2012, she was an award-winning syndicated columnist for a number of daily newspapers from New York to Texas. With more than ten years of marketing management experience, she has contributed to a variety of traditional and online publications, including MarketingProfs.com, SoftwareCEO.com, and Sales and Marketing Management Magazine. Read more of Amy's articles.

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