‘Location-Based Advertising and Marketing’ is the second consecutive
report from Berg Insight analysing the latest developments on the
locationtargeted advertising market worldwide.
This strategic research report from Berg Insight provides you with 200 pages
of unique business intelligence including 5-year industry forecasts and expert
commentary on which to base your business decisions.
This report will allow you to:
- Identify tomorrow's most profitable LBA opportunities in the mobile
- Understand the fundamentals of the ad-based mobile media revenue
- Recognise the key enablers of growth in the LBAmarket.
- Comprehend the relative importance of digital channels compared to
other advertising media.
- Learn about the experiences of LBA campaigns by top global brands.
- Profit from valuable insights about LBA business models.
The mobile channel is gradually strengthening its position in the marketing
media mix as smartphones are becoming ubiquitous and drive mobile media usage.
One of the key developments in mobile advertising is the increasing
integration of location-sensitivity, which releases the full potential of the
mobile channel. A notable divide can be made between static and real-time
location-based advertising (LBA). Targeting by static variables involves using
information which is part of user profiles such as place of residence and
work. Real-time location targeting instead uses location information which is
gathered when an ad is delivered to a mobile user. Such LBA campaigns leverage
the same type of technologies to determine user location as other
location-based services (LBS). Common methods include GPS, Cell-ID and Wi-Fi
positioning which are all based on real-time information.
Targeting by location in combination with other contextual and behavioural
segmentation greatly enhances the relevance of mobile advertising. It has been
demonstrated that locationtargeted ads generate considerably higher returns
than conventional mobile advertising. The associated eCPM and CTR levels are
several times higher. Berg Insight estimates that the total global value of
the real-time mobile LBA market was € 526 million in 2012, representing
9.1 percent of the total mobile ad spend. Growing at a compound annual growth
rate of 65.2 percent, the real-time LBA market is forecasted to be worth
€ 6.5 billion in 2017, corresponding to 32.8 percent of all mobile
advertising and marketing. This means that location-based advertising and
marketing will represent around 5 percent of digital advertising, or more than
1 percent of the total global ad spend for all media. Asia-Pacific is
estimated to be the largest LBA market in 2017, followed by North America and
Key drivers for LBA include the growing adoption of both outdoor and indoor
location technologies, as well as the increasing consumer acceptance of LBS in
general. Local advertising is further a major market and LBA opens up the
mobile channel for new advertisers such as local merchants. Big-box retailers
can leverage LBA to combat both online and physical competitors. The fact that
LBA has higher performance has moreover translated into premium rates. The
main barriers to adoption are related to the inherently limited reach of LBA
which acts as a mental hurdle for advertisers. Education of advertisers and
new methods for campaign performance evaluation are thus called for. Privacy
issues can further not be ignored, but can be beneficially handled by privacy
control options beyond simple opt-in mechanisms. The demand for geo-targeting
remains comparably limited, but is bound to increase given the proven results
such campaigns generate.
LBA revenue forecast, € million (Worldwide 2011-2017)
The LBA value chain is still forming and there are a large number of players
involved in the ecosystem. The industry remains fragmented and far from
mature. Many different companies are involved, ranging from LBA specialists
such as Verve, Placecast and xAd, to LBS players including Telmap, Telenav and
Waze, and operators such as AT&T, SFR and the new UK joint venture Weve. There
is furthermore an abundance of location-aware applications and media which
serve geo-targeted ads, with examples such as Foursquare, Shopkick and SCVNGR.
Other stakeholders include coupons and deals providers including Vouchercloud,
Yowza!! And COUPIES, search solutions such as Hibu and Yelp, and proximity
marketing providers like Proxama, NeoMedia and Scanbuy. A number of
traditional mobile advertising players are also active in the LBA space, for
example Millennial Media, Madvertise and Nexage, as well as major digital and
telecom players such as Google, Apple and Facebook.
There are a number of key takeaways from the current trends in LBA. It has
been established that geo-targeting improves the performance of mobile
marketing and greater shares of ad budgets are devoted to LBA. High-precision
real-time geo-targeting is still sparsely used, and rightly so as most
campaigns do not require an accuracy of a few meters. Hyper-local LBA is
nevertheless becoming more common. Location is furthermore only one of many
valuable targeting variables and marketers must also strive to leverage other
contextual and behavioural data. It is then crucial to ensure sound opt-in
procedures and individual privacy measures for consumers. Marketing methods
such as conquesting and combating of showrooming can further leverage
location-based advertising. Current important high-volume LBA formats include
mobile search and SMS campaigns. Berg Insight anticipates that geotargeting
gradually will become ubiquitous and available across the entire mobile
This report answers the following questions:
- In what ways can location technology improve the relevancy of mobile
- What are the experiences from mobile LBA campaigns so far?
- How should mobile LBA be integrated in the marketing media mix?
- Which categories of companies can leverage mobile locationbased
- Which are the LBA specialists that stand out of the crowd?
- How are mobile operators such as AT&T, Telefónica and SFR
- How are traditional mobile advertising players and major digital and
telecom players positioning themselves in this market?
- How well suited for LBA are different existing and future mobile media
- Which are the main drivers and barriers affecting the mobile LBA market?