U.S. mobile ad spend is expected to balloon to $4 billion in 2015, up from just $790 million last year, according to the latest projections by forecaster BIA/Kelsey. One of the key drivers of the growth will be targeted local ads, which will account for $2.8 billion, or 70 percent of total spend, compared to $404 million, or 51 percent, this year.
The big question here is how large agencies and major publishers will respond. Companies like Gannett (NYSE: GCI) have been moving feverishly to reorient their newspaper and business operations to a more mobile world. But continuous cuts to the news operations are viewed as having potentially detrimental impact on local brands, whose established names are seen as a way to staying ahead of startups. If those brand names are degraded, the advantages are therefore naturally reduced, paving the way for new services to capture those local markets.
Given the obvious abilities of geo-targeting even today, it makes sense that local ads will make up the lion’s share of mobile advertising over the next four years.
After all, add up the fact that most users will be using some kind of smartphone by that time, plus, the ubiquity of mobile phones as most consumers’ constant companion, betting on the dominance of local ads is a safe one.
This year, brand advertisers are evolving their campaign objectives that will reflect mobile advertising as more than just an experiment.
The ROI and brand awareness advantages that mobile has even in 2011 are apparent and serve to balance out the problems with mobile advertising that will probably remain even in 2015. Those drawbacks include a small canvas for premium display ads and the often extreme aversion of consumers to ads interrupting them while using their phones, which makes the same displeasure online and offline appear mild.