Location-targeted mobile ads predicted to ring up $29.5B in sales by 2020

Location-based mobile advertising in the U.S. will generate $29.5 billion by 2020, according to a new forecast from BIA/Kelsey, marking a 24.6 percent compound annual growth rate from 2015.

The market research firm predicted search will continue to lead all mobile ad formats, although its share will decrease from 57 percent in 2016 to 42 percent in 2020. Native social advertising formats such as Facebook's news feed ads and Snapchat Stories will account for more than 28 percent of U.S. local-targeted mobile ad revenues by 2020, taking market share from both search and display.

The growth in native social advertising will be driven by several factors, the firm said: Such ads are often "immune to ad blockers," according to BIA/Kelsey, and they often deliver better results than other mobile ad formats. Those ads also are better-suited for the smaller screens of mobile devices, "which favor vertically scrolling in-feed units over banners."

"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 Michael Boland, BIA/Kelsey's chief analyst, in a press release. "These and other influences will require advertisers, publishers, agencies and ad tech players to rapidly innovate."

BIA/Kelsey obviously has a dog in this fight; the market research firm says its clients have "a vested interest in the local advertising business." But mobile clearly offers an opportunity for marketers to deliver valuable pitches to the right consumers at the right time and place. Advertisers that can leverage data to do so without being intrusive or annoying will find a very receptive audience.

For more:
- see this BIA/Kelsey press release

Related articles:
As mobile ad-blocking usage doubles worldwide, only 2.3M American smartphone owners block ads
Three UK to trial ad-blocking technology in June
Study: Mobile ads account for half of data costs on popular news sites
Report: Google exploring policy for 'acceptable ads'
MWC panel highlights tension between ad blockers and the mobile-ad ecosystem

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceWireless!

The Wireless industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceWireless as their must-read source for the latest news, analysis and data on this increasingly competitive marketplace. Sign up today to get wireless news and updates delivered to your inbox and read on the go.

Suggested Articles

AT&T has shifted its Cricket prepaid brand to a 100% authorized retailer model, according to Wave7 Research.

The FCC decided to extend the timeline for responding to Huawei's application for review until December 11.

All operators are trying to understand the intersection between their networks and hyperscale networks. But who gets the lion's share of the revenue?