Location-Based Advertising Will Account for 28.3 Percent of Mobile Ad Spend in 2016

Gothenburg, Sweden - According to a new research report from the analyst firm Berg Insight, the total value of the global real-time mobile location-based advertising and marketing (LBA) market will grow from € 192 million in 2011 at a compound annual growth rate (CAGR) of 91 percent to € 4.9 billion in 2016. This will then correspond to 28.3 percent of all mobile advertising and marketing. This means that location-based advertising and marketing will represent more than 4 percent of digital advertising, or 1 percent of the total global ad spend for all media.

The report predicts a rapid uptake of location-targeting among mobile advertisers after having remained on an experimental stage for several years. “The growing attach rates of location technologies in handsets and the increasing consumer acceptance of location-based services in general are the main game changers”, said Rickard Andersson, Telecom Analyst, Berg Insight. Targeting by location in combination with other contextual and behavioural segmentation greatly enhances the relevance of mobile advertising. “Major brands are progressively embracing location-based advertising across the range of mobile formats, and LBA also opens up the mobile channel for new advertisers such as local merchants”, said Mr. Andersson. He adds that SMS, mobile search and coupons have emerged as important high-volume LBA formats.

The LBA value chain is still forming and there are a large number of players involved in the ecosystem. Since the value chain is fragmented and the industry has not yet reached maturity, many different roles are involved. Major digital and telecom players such as Google, Apple and Nokia are competing to gain market shares in the space alongside mobile operators, LBS players, location-aware apps and media, mobile coupon providers, mobile search companies and proximity marketing providers. There is further a range of specialised LBA actors, including Placecast, xAd and Xtify. The traditional mobile advertising providers have also intensified their focus on location targeting, in some cases even through acquisitions. Further consolidation is expected as small players with innovative advertising solutions are absorbed by larger players in the industry.

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