BIA/Kelsey: U.S. local mobile spending projected to increase

U.S. mobile local advertising spending is projected to grow from $1.2 billion in 2012 to $9.1 billion in 2017, representing a compound annual growth rate of 49.3 percent, according to BIA/Kelsey.

"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, in a statement. "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."

BIA/Kelsey's "U.S. Local Media Forecast (2012-2017)" estimated that U.S. mobile ad spending was $3.2 billion last year, with targeted mobile ads making up 38 percent of overall spending. The firm predicts overall mobile spending will shoot to $16.8 billion in 2017, with targeted mobile ads grabbing 54 percent of total spending.

Local search netted the most ad dollars, growing from $704 million last year to $5.7 billion in 2017. Next in line was display advertising, which will increase from $379 million in 2012 to $2.7 billion in 2017. Following was SMS, growing from $101 million in 2012 to $162 million in 2017, and video, rising from $38 million in 2012 to $515 million in 2017.

While mobile spending is shooting upward, local mobile spending is set to take a smaller piece of the pie than previously expected, according to Street Fight's Steven Jacobs.

"National marketers' spend on localized mobile campaigns actually grew from our last forecast," Michael Boland, senior analyst at BIA/Kelsey, told Street Fight. "However, the localized share of U.S. mobile advertising went down… since U.S. mobile ad spending lately includes things that are less location-based."

Boland attributes this decrease in local spending to the expansion of spending on mobile advertising via social platforms Facebook and Twitter, which according to a recent eMarketer report is exploding.

"Even though Facebook COO Sheryl Sandberg has touted the company's potential in local, Facebook's local strategy remains nascent at best," Jacobs wrote.

For more:  
- See this MediaPost article
- See this Marketing Land article and this article
- See this Street Fight article

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