Mobile advertising spend set to reach $72 billion by 2021

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Source BIA Kelsey

Annual US mobile ad spend is now predicted to reach $72bn by 2021, up from $33bn in 2016. That’s a 17% compound annual growth rate.

According to the latest BIA/Kelsey Industry Watch report, location-targeted mobile ad spend is predicted to grow from $12.4bn in 2016 to $32.4bn in 2021, signifying a growth of 45%

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Location plays an important role in the path to purchase from mobile advert to store visit. Indeed, Google found that 39% of searches were location-specific, whilst 76% resulted in a store visit within 24 hours. The report found that local intention was driven by mobile advertising performance. Successful ads tapped into local actions such as call-to-action or conversion options such as instant shop buttons or maps.

Mike Boland, Chief Analyst of BIA/Kelsey, explains:

“The smartphone revolution turns ten this year, and we’ve come a long way. But many are far behind, still operating with a desktop mindset. They’ll be left behind the next era of mobile, defined by native-social, voice interfaces and multimedia, not banner ads and traditional search.”

Location targeted advertising spending is set to reach $21.74bn by 2021, up from $11.19 in 2016.

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In addition, the report discusses ad spend according to format such as search, display, messaging, video and native social. Whilst search advertising currently holds the largest share, native social is growing rapidly.

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Native social advertising is expected to grow $24.2bn in 2021 from $10.2bn in 2016. This increase confirms the format’s advantages, high performance and demand. Aside from the quality of the ads, millennials also prefer native social ads as they present more subtly across mobile devices.

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BIA/Kelsey recommend that advertisers go native, start targeting and measure beyond just clicks – e.g. store visits if that is relevant to their campaign goals.