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After Success, More Spending on Mobile Local Ads

Social and local search will drive growth

The mobile location-based services (LBS) market is picking up speed, with 60% of mobile users now accessing LBS at least monthly. As a result, revenues are growing, according to a recent forecast from Berg Insight, which estimated that LBS revenues in North America would grow from $1.8 billion in 2013 to $3.8 billion in 2018.

Mobile Location-Based Service (LBS) Revenues in North America, 2013 & 2018 (billions)

BIA/Kelsey forecast far greater growth in mobile local ad spending in the US alone, predicting this would hit $15.74 billion in 2018, from $2.87 billion in 2013. It is important to note that both sources defined mobile local somewhat differently.

And mobile location-targeted ads appear to be the future of mobile advertising. BIA/Kelsey estimated that mobile local claimed 40% of the mobile ad spending pie in 2013—and expected this to grow to grab the majority in 2018, with 52% of the total.

US Mobile Ad Spending, Local* vs. National, 2013-2018 (billions)

Berg Insight predicted that ad revenues from social networking and local search would drive mobile local ad spending. According to the source, the largest LBS segment was social networking and entertainment in terms of revenues. Mapping and navigation claimed the second-largest amount of revenues, and local search ranked third.

US Mobile Local* Ad Spending, by Format, 2013-2018 (millions)

BIA/Kelsey broke out location-targeted mobile ad spend in terms of format differently. However, search and social were among the top among formats, with search claiming the majority of location-targeted mobile ad spending through 2018. The firm forecast that native/social would pass display in 2018 to grab the No. 2 spot.



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