Saturday, March 31, 2012

Local Mobile Ad Revenues Forecast: $5 Billion by 2016


In the ongoing cycle of market forecasting, we're once again at a half-year refresh for mobile local ad revenue projections. Though the revenue outlook is the "money" number, there are lots of background inputs to dissect, such as mobile search volume.

Where is the Market Going?

share-of-mobile-local-ad-spend-by-format
 

Mobile local ad revenues will grow from $784 million last year to $5.01 billion in 2016. If that seems low, keep in mind that we're just talking about the local segment of overall U.S. mobile ad revenues .
But to really get a sense of where these numbers are coming from, it's best to break down their components. Specifically, we look at the ways that different ad formats are consumed, bought, and sold. These include search, display, SMS, and video ads.
The search portion is growing fastest, and is the biggest driver of overall growth in mobile advertising. This is partly due to the growth we project in the mobile web –where search is central – as opposed to apps .
But it's also directly related to mobile user behavior in the form of mobile local search volume growth; and to higher performance we're seeing from search ads, compared to other formats. That's largely due to their pull based, intent-driven nature.

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