According to the latest BIA/KELSEY estimates, annual US mobile ad spending will grow from $33 billion in 2016 to $72 billion by 2021, a 17% compound annual growth rate. The location-targeted portion of that overall mobile ad spend is projected to grow from $12.4 billion in 2016 to $32.4 billion in 2021. This growth translates to 38% of overall mobile ad revenues today, growing to 45% by 2021.
One of the biggest mobile success factors for local mobile is native thinking, which involves building content, apps and ads that fit the device’s unique form factor, rather than porting formats from legacy media. The smartphone’s location-tracking abilities and portability, combined with users’ transitory behaviour, make location-targeted content a natural fit.
“The smartphone revolution turns ten this year, and we’ve come a long way,” said BIA/KELSEY Chief Analyst Mike Boland and author of the report. “But many are far behind, still operating with a desktop mindset. They’ll be left behind the next era of mobile, defined by native-social, voice interfaces and multimedia, not banner ads and traditional search.”
In addition to segmenting mobile ad spend by its locality, the report also reveals BIA/KELSEY’s estimates for each mobile ad format including search, traditional display, messaging, video and native-social. Search has long maintained a top position but is slowly losing share to emerging formats like native-social.
Native-social ads are expected to derive $10.2 billion in 2016 and grow to $24.2 billion in 2021. This growth stems from the format’s advantages, high performance and resulting demand. For example, mobile screens lack real estate for traditional top and side banner ads that ruled the desktop web. A vertically scrolling feed (a la news feed) conversely holds greater capacity for ad inventory.
Source: All Access