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.
- see this BIA/Kelsey press release
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