Location-Based Mobile Ads Forecast To Hit $10.8B In 2017

MobileMarketingDaily

 

by Gavin O'Malley, Jan 16, 2014, 4:44 PM

Delivering on mobile’s full potential, location-based ad targeting is finally ready for the big time.
 
By 2017, spending on location-targeted mobile advertising will reach $10.8 billion, which would represent a 52% share of all mobile ad dollars.
 
That’s according to a new forecast from BIA/Kelsey, which reports that marketers spent $1.4 billion on location-targeted mobile campaigns in 2012.
 
More remarkable, however, is the finding that post-engagement attribution tracking is “already here as a competitive imperative for mobile advertisers, publishers, networks and ad tech providers,” Mike Boland, vice president of content, at BIA/Kelsey, told Mobile Marketing Daily.
 
“Smartphone penetration combined with myriad behavioral and location signals enable better attribution, while advertiser demand for tighter ROI further compels it,” Boland explained. “Tying conversions back to specific ad campaigns is the holy grail of advertising, which will make campaign attribution the mobile battleground of 2014.”

Still, BIA/Kelsey’s forecast is extremely optimistic, considering the nascent state of location targeting and arguably, attribution methods. For example, mobile ad network Thinknear by Telenav recently compared ad exchange-supplied location data with its own location data and found that 26% of exchanges reported locations that were off by more than 10,000 meters. Brands hoping to connect with consumers in a particular retail location would fail miserably a quarter of the time.

These and similar findings partially explain why mobile still only sees 3% of ad dollars, while U.S. consumers currently spend about 12% of their “media time” on mobile devices, according to BIA/Kelsey.
 
Worldwide, Juniper Research recently predicted that spending on smartphone and tablet advertising and marketing programs would grow from $13.1 billion in 2013 to 39.3 billion in 2018.
 
In the Juniper report, author Sian Rowlands noted: “By harnessing Big Data and location information, mobile ads are being better targeted to users.”
 
Attribution -- the marketing model that attempts to attribute sales to multiple touchpoints rather than the last ad consumers click or view -- remains a sore point for many brands and agencies.
 
It is a problem that Chris Knoch, vice president of Strategic Solutions at attribution expert IgnitionOne, knows all too well. “I think people want to kill [attribution] because it’s getting more complicated,” recently told OMMA conference attendees. “If you’re still doing last-click attribution, you are light years behind!”