It’s that time of year again; BIA/Kelsey’s spring release of its local media forecast. This is broken down into its media components, such as Online, TV, Yellow Pages, Mobile, etc… The full forecast will be out in a few weeks. Today we release the first component: Mobile.

Part of the Executive Summary and charts are below. The top-line takeaway is overall U.S. mobile ad revenue growth: $7.2 billion last year to $30.3 billion by 2018. That includes search, display, SMS, video and native social (i.e. FB news feed ads). The latter caused us to dial figures up from last year.

Zeroing in on the forecast’s main theme of location targeted mobile ads, those went from $2.9 billion last year to $15.7 billion in 2018. That makes them 40 percent of overall mobile ad revenues, growing to 52 percent in 2018. There are lots of reasons for that, some of which are outlined below.

Lastly, it’s notable that this forecast release coincides with today’s IAB release of prior year online and mobile audits. It’s good to see accuracy in their figures, especially the mobile numbers which I believe due to parity with the figures I devised. Their $7.1B is just shy of our $7.2B.

To engage over these numbers or for a full copy of the forecast, email my colleague Steve Passwaiter. And we’ll be discussing these figures in greater depth during our Leading in Local conference next month in Atlanta. Email me directly for a discount code at mbolandATbiakelsey.com.

Executive Summary

— Location targeted mobile advertising — the centerpiece of this forecast — is included within total U.S. mobile advertising (see slide 22 for this breakdown).

— To understand the localized portion requires first panning back to the total mobile ad revenue picture. Here, BIA/Kelsey projects revenue to grow from $7.2 billion in 2013 to $30.3 billion in 2018. This projection has increased from our previous forecast (November 2013).

— Increased projections result from guidance from mobile ad networks and ad share leaders such as Google (33 percent of paid clicks now come from mobile devices); and Facebook (53 percent of ad revenues attributed to mobile, up from 23 percent last March).

— Google’s Enhanced Campaigns*, launched in July, will compound these factors by forcing mobile ads on search advertisers (default campaign inclusion). This will accelerate a mobile advertising learning curve and adoption cycle for all search advertisers, including SMBs.

— Enhanced Campaigns will also notably close the current gap between mobile ad rates and desktop equivalents (rates are demand-driven).

— This will play out as an influx of advertisers in Google’s bid marketplace for mobile keywords will naturally boost bid pressure and thus CPCs. There is shift is already underway, evidenced by data shared with us by search marketing agencies.

— The share of the overall mobile ad revenue pie attributed to location based campaigns will grow from 40 percent ($2.9 billion) in 2013 to 52 percent ($15.7 billion) in 2018.

— This share shift remained fairly consistent from our previous forecast, as the factors driving localized mobile ad adoption have remained steady.

— These factors include advertiser demand, higher ad performance for location targeted ad campaigns, and resulting increases in mobile ad rates (CPMs, CPCs).

— Other important factors driving this localized share include the adoption of mobile local advertising tactics (i.e. geo-fencing, click-to-call, click to map) by national advertisers, who account for most U.S. mobile ad spending.

— SMB adoption — a slow but growing share of localized mobile advertising — will likewise impact its growth.

— For national brand advertisers, the shift to location targeted mobile advertising will be driven by their natural evolution to adopt effective, increasingly available, and currently undervalued mobile local ad inventory.

— Innovation among ad networks and ad tech providers (e.g., Enhanced Campaigns) will provide additional incentive and impetus for this transition.

— For SMBs, the sector’s digital media adoption traditionally lags behind national advertisers due to lower levels of tech savvy, budget, time and human resources.

— However, SMB-driven growth is expected throughout our forecast period due to evolving SMB savvy and growing propensity to self-serve with offerings like Google AdWords and Facebook (pull).

— Also at play will be the accelerating mobile innovation, sales and bundling efforts of local media companies (push).

— As an example of the push paradigm, Yelp last month partnered with YP. The publisher’s 4,000 local sales reps will now be armed with Yelp advertising packages, which include mobile presence and distribution.

The post Fresh BIA/Kelsey Data: U.S. Mobile Revs Grow from $7.2B to $30B by 2018 appeared first on BIA/Kelsey - Local Media Watch.

Right now mobile advertising accounts for about 9% of advertising spending for business franchisees or licensees according to BIA/Kelsey’s Local Commerce Monitor™. About 68.4% of business franchisees or licensees say they are planning to increase their current level of advertising and promotional spending in the next 12 months. This increase in spending will likely lead to a larger allocation of advertising budgets towards mobile with franchisees and licensees planning to use 42.2% of their future advertising budgets on digital/online advertising (7.1% more than last year).

For those franchisees and licensees who are not yet involved in mobile advertising, it is something they are considering for the future. About 34.3% of those who do not already advertise with mobile said they would invest in mobile search advertising, 34.3% showed an interest in mobile apps, 31.4% showed an interest in text message advertising and 31.4% in mobile deals according to the Local Commerce Monitor.

Many franchisees and licensees are taking advantage of bar codes in store. These bar codes are scanned by consumer’s smartphones with 54.7% of bar codes used being in print and 36.8% being posted somewhere in the store. Check-in information is also utilized with 70.5% of franchisees and licensees saying they actively use the information that is generated when customers check-in to their location, according to the Local Commerce Monitor.

Franchisees and licensees are clearly not ignoring mobile. In fact we expect their spending on mobile advertising to increase. To learn more about how national brands will be using mobile to appeal to the local population their franchisees and licensees cater to, come to BIA/Kelsey’s Leading in Local: The National Impact conference that will be held May 7-9 in Atlanta. Hot topics in national to local realm will be discussed by industry leaders so do not miss this opportunity to learn about and network with the experts.

For additional reasons to come to Atlanta in May, see below:

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Today, BIA/Kelsey released its U.S. Local Media Forecast (2012-2017), showing local ad revenues of $133B (2012) growing to $152B (2017). This includes advertising targeted to geographically specific audiences, such as Newspapers, Radio, TV, Interactive, etc..

One important slice of this forecast is the location targeted ad revenues attributed to mobile. That’s of course a small but quickly growing segment. In addition to these location targeted mobile revs, we panned back to look at the overall U.S. mobile ad revenue picture.

Interestingly, location targeted mobile ad revenues will grow to 54 percent of overall mobile revenues by 2017. This is driven by many market forces we examine in great detail and from discussions with industry players. We also break down revenue by format such as search and display.

The forecasting process is a doozy but we get bulletproof results and valuable findings. We’re looking to continue our streak of accurate numbers — affirmed in retrospect — for the past 5 years of looking closely at the mobile ad opportunity, not to mention decades covering local media.

The mobile exec summary is below, and BIA/Kelsey clients can log in to download the full report. Anyone else interested in finding out more can email me at mbolandATbiakelsey.com. We’ll also discuss these findings in greater depth next month at our Leading in Local conference.

Executive Summary

— Location targeted mobile advertising — the centerpiece of this forecast — is inclusive of total U.S. mobile advertising (see slide 19 for this breakdown).

— To understand the localized portion requires first panning back to the total mobile ad revenue picture. Here, BIA/Kelsey projects revenue to grow from $3.65B in 2012 to $20.68B in 2017. This projection has increased from our previous forecast (March 2013).

— Increased projections result from guidance from mobile ad networks and ad share leaders such as Google (33% of paid clicks now come from mobile devices); and Facebook (49% of ad revenues attributed to mobile, up from 23% in March).

— Google’s Enhanced Campaigns*, launched in July, will compound these factors by forcing mobile ads on search advertisers (default campaign inclusion). This will accelerate a mobile advertising learning curve and adoption cycle for all search advertisers, including SMBs.

— Enhanced Campaigns will also notably close the current gap between mobile ad rates and desktop equivalents (rates are demand-driven).

— This will play out as an influx of advertisers in Google’s bid marketplace for mobile keywords will naturally boost bid pressure and thus CPCs. There is shift is already underway, evidenced by data shared with us by search marketing agencies.

— The share of the overall mobile ad revenue pie attributed to location based campaigns will grow from 37% ($1.4B) in 2012 to 52% ($10.8B) in 2017.

— This share shift remained fairly consistent from our previous forecast, as the factors driving
localized mobile ad adoption have remained steady.

— These factors include advertiser demand, higher ad performance from location targeted ad campaigns, and resulting increases in mobile ad rates (CPMs, CPCs).

— Other important factors driving this localized share include the adoption of mobile local advertising tactics (i.e. geo-fencing, click-to-call, click to map) by national advertisers, who account for most U.S. mobile ad spending.

— SMB adoption — a slow but growing share of localized mobile advertising — will likewise impact its growth.

The post Location Targeted Mobile Revs to Reach $10.8B by 2017 appeared first on BIA/Kelsey - Local Media Watch.

BIA/Kelsey examines these differences this week in a new “Spotlight” report using data from the recently completed Wave 17 of the Local Commerce Monitor (LCM). The report is the latest in the ongoing “Spotlight” series that drills down into the LCM data to examine how SMB advertisers acquire and retain customers.

LCM is BIA/Kelsey’s long-running study of how U.S. SMB advertisers are evolving their use of media to acquire and retain customers.

Local mobile advertising is more than a blip on the radar today, and it is expected to grow substantially over the next few years. Projected mobile local advertising revenues represent a subset of total U.S. mobile ad spending, which BIA/Kelsey forecasts to grow from $3.25 billion in 2012 to $16.8 billion in 2017. This puts locally targeted mobile ads at 38% of overall U.S. mobile advertising spending in 2012, growing to 54% in 2017.

The LCM Wave 17 data shows that SMBs that participate in mobile advertising differ from those that do not use mobile advertising in several important ways:

* SMB mobile advertisers have much more aggressive plans for advertising media spending over the next 12 months compared to those who don’t. These SMBs that leverage mobile advertising spent $56,964 in their annual media spend in the last year, more than double those that do not use mobile advertising.

* In the past 12 months, SMB mobile advertisers on average spent 37% more on their budget for digital and online compared to their non-mobile counterparts (28%).

* SMB mobile advertisers advertising are highly engaged with their customers. They tend to use check-in data to understand behavior and monitor basic information related to consumers at a far higher rate than non-mobile SMBs.

* SMB mobile advertisers care very much about their online sentiment; 80% of them perform some sort of monitoring of online properties compared to only 60% of the full sample.

Interested in learning more about LCM Wave 17 or getting a custom cut for your business? Contact Celine Matthiessen at cmatthiessen@biakelsey.com.

We’ll be covering this and other themes in great depth at our upcoming Leading in Local conference, December 10-12 in San Francisco. Be there and join the conversation!

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Google continues a long line of recent mobile advertising additions with today’s launch of Boost ads for mobile. This is essentially the mobile version of Boost, which it launched on the desktop in October. There it joined Tags in an effort to appeal more directly to SMBs with simple advertising.

The appeal will be much the same in mobile, and simply add a mobile component to the existing program. It will be available on Google search results on Android and iPhone devices, and ads will include a map and a phone number (like the desktop).

The interesting thing is how advertisers that take advantage of this could gain a great deal more value than they are getting on the desktop (just like mobile pay per call). This is because Boost generally places ads above the fold, where there is considerably less real estate in mobile.

To take advantage of Boost on the desktop and mobile, a Google Places listing is required. The Boost ad copy is essentially pulled from that content and targeted toward users in the vicinity of the business in question. In that way, the targeting and copy is not unlike Extensions.

Again, the bottom line is simplicity. Think of it as a dumbed down version of the relatively more complex AdWords dashboard for creating and managing ad groups. This follows the launch of mobile pay per call, Extensions and hyperlocal mobile ad targeting.

The Boost ads launch for mobile encapsulates Google’s mobile plans in a few different ways. It’s going first and foremost for simplicity to get the ball rolling. But it’s also slowly and carefully introducing new options. It won’t stop here.

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With more than half of its 65 million users listening from portable devices, Internet streaming leader Pandora sees massive opportunity in mobile. In its latest move to tap that potential, the company is partnering with AdReady to introduce geo- and demo-targeted audio and display ad opportunities for local businesses.

VP of Sales Brian Mikalis told BIA/Kelsey that Pandora receives frequent outreach from local and regional merchants that are active users of its customized streaming services on their own mobile devices and wonder “how do I get my ad there?” AdReady’s tools will be used to “more efficiently get campaigns running,” primarily through building out display banners.

Local buyers can purchase audio, display, or bundle them. Mikalis underscored the value of having these dual formats complement and cross promote each other. As an example, an audio spot can encourage users to “tap on the banner ad” to engage in certain activities or enjoy exclusive rewards. Also, the ads couple registration-based geotargeting with basic demographic targeting (age, gender).

Mikalis said that Pandora is working on new solutions for geotargeting based on the real-time location of the phone rather than the registration ZIP code.

Advertiser demand for Pandora’s online and mobile platforms has mushroomed to the point that the company has doubled its SMB inside sales team, which is based in its Oakland, California, headquarters. Early adopters among local advertising categories include universities and cultural/entertainment centers (Mikalis cited a local aquarium and a performing arts center as relevant examples).

Pandora has made recent efforts to extend its service beyond the PC. Beyond mobile, it is pursuing several auto installation deals and is offering its advertising network across connected TVs and Blu-ray players through set-top box and middleware providers such as Roku and Google TV.

Mikalis and Cheryl Lucanegro (Senior VP of Advertising Sales), will cover this and other developments during a keynote address at BIA/Kelsey’s ILM ’10 conference Dec. 7-9 in Santa Clara, CA.

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