BIA/Kelsey’s U.S.

Mobile Ad Revenue Forecast, 2009-2014
Mobile Local Media
Nov. 29, 2010

excerpt

U.S. Mobile Advertising Forecast 2009-2014
$3,500 CAGR: 43% $3,000 $2,500
US$ Millions

$2,946

$2,136 $2,000 $1,591 $1,500 $1,000 $500 $0 2009 2010 2011
Note: Numbers are rounded.

$1,186 $790 $491

2012

2013

2014
4

© 2010 BIA/Kelsey

Mobile Ad Formats: Definitions and Drivers
Ad Format Definitions Key Inputs/Drivers

Search (National and Local)

Text advertising applied to search queries on mobile devices. Display advertising applied to app and mobile Web inventory. Includes rich media. Commercial SMS messaging.

Search volume, CTRs, CPCs, ad coverage. Vetted against core search engine revenues. Mobile Web use, page views, impressions, CPMs, sell through rates. Vetted against ad network revenues. SMS penetration, volume, CPMs, sell through. Vetted against ad network revenues.
© 2010 BIA/Kelsey

Display (National and Local)

SMS (National and Local)

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Share of Mobile Ad Spend by Format
$3,500 $3,000 $2,500
US$ Millions
$562

$2,000 $1,500 $1,000 $500 $0
$226 $206 $59 $271 $163 $356 $325 $307 $554 $652 $390

$468 $1,581 $954 $548 $803

$714

2009

2010 Display

2011 Search

2012 SMS

2013

2014

Note: Numbers are rounded.

© 2010 BIA/Kelsey

10

Format Breakdown and Growth in Scale

2014

$562 $803

2009
$226 $206

$59

$1,581

Display

Search

SMS

© 2010 BIA/Kelsey

11

U.S. Mobile Advertising: Search
$1,800 $1,600 $1,400
US$ Millions

CAGR: 93%

$1,581

$1,200 $1,000 $800 $600 $400 $200 $0 2009 2010 2011
Note: Numbers are rounded.

$954

$548 $307 $163 $59 2012 2013 2014
12

© 2010 BIA/Kelsey

U.S. Mobile Advertising: Display
$900 $800 $700
US$ Millions

CAGR: 31% $714 $652 $554

$803

$600 $500 $400 $300 $200 $100 $0 2009 2010 $206 $356

2011

2012

2013

2014
13

Note: Numbers are rounded.

© 2010 BIA/Kelsey

U.S. Mobile Advertising: SMS
$600 CAGR: 20% $500
US$ Millions

$562 $468 $390 $325 $271 $226

$400 $300 $200 $100 $0 2009 2010 2011

2012

2013

2014
14

Note: Numbers are rounded.

© 2010 BIA/Kelsey

Mobile Local Advertising: Takeaways
• BIA/Kelsey defines mobile local advertising as that which is targeted based on a user’s location and/or actionable locally. • This local targeting happens to different degrees, and with different methods, within each of the advertising formats examined above (search, display, SMS). • BIA/Kelsey projects U.S. mobile local ad revenues to grow from $213 million in 2009 to $2.03 billion in 2014.

© 2010 BIA/Kelsey

16

Mobile Local Advertising 2009-2014
$2,500 CAGR: 57% $2,025 $2,000
US$ Millions

$1,500 $984 $692 $500 $213 $0 2009 2010 2011
Note: Numbers are rounded.

$1,402

$1,000 $404

2012

2013

2014
18

© 2010 BIA/Kelsey

Forecast Methodology
• Forecast data are based on interviews, company reports, market surveys, third-party resources, usage trends, knowledge of industry players, media ad spend shifts, and expected company outcomes. • The forecast is divided into mobile ad formats, each of which is bought and sold in different units and requires different forecasting models. • This “top down” approach is vetted against a “bottom up” approach, which adds up revenues of top players in each mobile advertising segment (i.e., mobile ad networks). • Traditional definitions of ad spending apply to this forecast. This doesn’t include marketing or promotional expenditures such as coupons.
© 2010 BIA/Kelsey

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Questions and comments:
Michael Boland | mboland@kelseygroup.com | 415.462.1935

Copyright © 2010 BIA/Kelsey. All Rights Reserved.
This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under federal law. BIA/Kelsey disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.

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