Has Growth in Local Mobile Ad Spend Helped Yelp? - eMarketer

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Has Growth in Local Mobile Ad Spend Helped Yelp?

US local mobile ad spending to reach $6.58 billion this year

February 4, 2015

The ability to find local businesses is top of mind among smartphone users. In October 2014 research by Harris Poll for Placecast, US smartphone owners ranked being able to search for a retail location (87%) and accessing local information and activities via apps were important mobile activities to be able to perform. These were the third and fourth most popular activities, trailing more general text messaging (96%) and internet access (95%).

US Mobile Ad Spending, Local vs. National, 2014-2019 (billions)

Such preferences are driving a surge in local mobile ad spending. In September 2014, BIA/Kelsey forecast that US local ad spending via mobile would soar more than 54% in 2015, from $4.27 billion to $6.58 billion. The firm estimated that strong growth would continue through the end of the forecast period, with an increase of nearly 19% pushing total local mobile ad spending to $17.86 billion in 2019 for a nearly 43% share of US mobile ad spending—about 10 percentage points higher than in 2014.

Local business review site Yelp is benefiting from the growing popularity of local mobile ad spending, especially when it comes to search. In December 2014, eMarketer forecast that the company’s mobile ad earnings would rise 87.7% to total $242.1 million in 2015 and hit $397.0 million by 2016. Mobile search ad revenues—particularly from local advertisers and pushed ahead by Yelp’s strategic agreement with YP—will account for the large majority of this. We expect the company’s mobile search ad revenues to rise 85.8% this year, totaling $227.5 million, and to grow an additional 62.3% next year to $369.2 million, or 57.7% of its digital ad revenues.

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