Mobile Ad Revenue To Grow To $9.1 Billion

RADIO ONLINE | Thursday, April 4, 2013 | 9:34am CT

Research company BIA/Kelsey says mobile is the revenue bastion of the immediate future and forecasting U.S. mobile local advertising revenues to grow from $1.2 billion in 2012 to $9.1 billion in 2017, representing a compound annual growth rate of 49.3 percent. This corresponds to a 0.9 percent share of local media ad revenues in 2012, growing to a 6.1 percent share in 2017, according to the firm's recently released U.S. Local Media Forecast (2012-2017).

BIA/Kelsey's projected mobile local ad revenues represent a subset of total U.S. mobile ad spending, which the firm forecasts to 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. 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," said Michael Boland, senior analyst and director of content, 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."

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