U.S. Mobile Ad Spending to Reach $29.5B by 2020

RADIO ONLINE | Thursday, June 16, 2016

In the spring update to its U.S. Local Advertising Forecast 2016, BIA/Kelsey projects location-targeted mobile ad spending to grow from $9.8 billion in 2015 to $29.5 billion in 2020, a 24.6 percent compound annual growth rate. The forecast offers breakouts of ad spend for search, traditional display, native social, traditional video and messaging. Search will continue to eclipse all ad formats, holding the largest share of location-targeted ad spend through the forecast period. However, that share will decrease from 57 percent in 2016 to 42 percent in 2020.

"Several market factors are currently bearing down on the mobile ad marketplace -- from Google's moves to adapt to an app-based world, to the media consumption habits of millennials," said BIA/Kelsey VP/Content and Chief Analyst Michael Boland. "These and other influences will require advertisers, publishers, agencies and ad tech players to rapidly innovate."

BIA/Kelsey expects native social, one of the fastest growing formats in mobile advertising, to increase its share of location-targeted mobile ad spend from 19.8 percent in 2016 to 28.1 percent in 2020, mainly at the expense of search and display. The most common examples of the native social format are Facebook's news feed ads and Snapchat Stories. Instagram and LinkedIn have similar offerings, which continue to grow in prevalence and ad coverage.