Location Data Pumps Up Mobile Performance - eMarketer

Newsletters Sign-Up

Plans & Pricing

Does My Company Subscribe?

Location Data Pumps Up Mobile Performance

Spending grows rapidly on geotargeted mobile ads

October 31, 2013

As mobile budgets swell, brands are eager to find ways to make their ads contextually relevant to consumers. As a result, the use of geotargeted mobile display advertising is on the rise, as are campaign results, according to a new eMarketer report, “The Effectiveness of Geotargeted Mobile Ads: Location Data Pumps Up Performance.”

However, not all geotargeted ads are created equal. For example, geotargeting at Facebook—the largest recipient of mobile display ad dollars, eMarketer estimates—enables advertisers to target ads at the country, state, city and ZIP code levels. Twitter’s geotargeting parameters are similarly broad. Yet some mobile ad networks and premium publishers enable brands to zero in on users within a specified radius of GPS coordinates. And other location-based apps and services allow advertisers to target ads to mobile users indoors, such as within a retail store or car dealership.

Clickthrough Rates for US Location-Based Mobile Ad Campaigns Served by Verve Mobile, by Targeting Type, H1 2013

The more exact the targeting, the more limited the inventory. But not all brands are competing for GPS-level inventory, as some have found ads targeted to larger geographic areas meet objectives best.

Spending on geotargeted display advertising is currently small—but growing rapidly. BIA/Kelsey estimated advertisers in the US would invest $725 million in local mobile display advertising in 2013, which is nearly twice the amount spent last year. Looking ahead to 2017, the research firm forecast total expenditures would more than triple over the next four years, to over $2.74 billion, as more national brands realign strategies to sync up with the increased use of mobile devices. In addition, as brands learn (through testing) how best to leverage the location tracking capabilities of smartphones and tablets, spending is expected to rise.

US Local Mobile Ad Spending, by Format, 2012-2017 (millions)

For sure, mobile display ads are just one channel brands use to deliver location-targeted messages to mobile users—mobile search ads, text messages, push notifications and in-app messages are among the others. The bulk of mobile local ad dollars will go toward local search, according to BIA/Kelsey’s projections, but display spending is growing at a near-equal pace.

“We’re seeing enormous interest in this type of marketing (geotargeted ads) from mainstream brands—far more than we did 18 to 24 months ago,” said Alistair Goodman, CEO of location-based advertising provider Placecast. “Brands are realizing that consumers are increasingly using the mobile device to navigate the physical world, and they have a unique opportunity to put a message into that [experience].”

Consumers have always been moving targets, and marketers excel at staying one step ahead. To have that advantage in the physical world, however, brands need a keen understanding of real-time geotargeting tactics and, increasingly, the insight to recognize that leveraging historical location data can be equally as powerful as real-time geotargeting.

The full report, “The Effectiveness of Geotargeted Mobile Ads: Location Data Pumps Up Performance,” also answers these key questions:

  • What does geotargeting mean?
  • How precise can geotargeted display ads be?
  • Do tighter perimeters produce stronger results?
  • Can marketers achieve scale with geotargeted mobile campaigns?
  • How do marketers leverage historical location data?

This report is available to eMarketer corporate subscription clients only. eMarketer clients, log in and view the report now.


  • Go beyond the articles:

    eMarketer Products

    You've never experienced research like this.

  • Hear from our clients:

    Customer Stories

    Nearly all Fortune 500 companies rely on us.

  • Want to learn more?

    Contact Us

    Inquire about corporate subscriptions today.