Radio and television broadcasters looking to monetize their mobile streaming platforms may wish to share the following information with their local, regional, and national sales executives as soon as possible.
According to a BIA/Kelsey Industry Watch report released Tuesday (1/24), annual U.S. mobile ad spending will grow from $33 billion in 2016 to $72 billion by 2021, a 17% compound annual growth rate (CAGR).
Better yet 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.
The report, Getting to $72 Billion: BIA/Kelsey’s Mobile Ad Revenue Forecast, explores one of the fastest growing areas of location-targeted media: Mobile.
With the smartphone’s location-tracking abilities and portability, combined with users’ transitory behavior, BIA/Kelsey believes location-targeted content is “a natural fit.”
“The smartphone revolution turns 10 this year, and we’ve come a long way,” said Mike Boland, Chief Analyst of BIA/Kelsey and the report’s author. “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 (such as a news feed) conversely holds greater capacity for ad inventory.
The mobile forecast covered in the report mirrors BIA/Kelsey’s cross-media U.S. Local Advertising Forecast for 2017 that covers 12 media. The forecast defines location-targeted ads as those that are targeted based on a user’s location or include proximity-relevant content to trigger local offline conversions.
The report examines the whole paid mobile ad pie (i.e., localized and non-localized ad revenue) and includes a breakdown of ad revenue by format (i.e. search, traditional display, traditional video, native-social and messaging.)
It also examines influencing factors such as call commerce, ad blocking and search.
BIA/Kelsey’s Industry Watch series examines key trends and opportunities in tech and media sectors.