Ability to precisely target prospective customers using real time location is one of the most promising additions to the advertising toolbox
Advertising using mobile location is set to grow to be worth Euro 6.5 billion by 2017, says new research.
The total value of the global real time mobile location-based advertising and marketing market will grow from Euro 526 million in 2012 at a compound annual growth rate (CAGR) of 65%, to Euro 6.5 billion in 2017, according to Berg Insight.
This means that location-based advertising and marketing will represent around 5% of digital advertising, or more than 1% of the total global ad spend for all media, as the growth will equate to 32.8% of all mobile advertising and marketing.
The ability to precisely target prospective customers using real time location is currently one of the most promising additions to the advertising toolbox, said Berg Insight. 'Key drivers for location-based advertising and marketing include the growing adoption of both outdoor and indoor location technologies, as well as the increasing consumer acceptance of location-based services in general,' said Rickard Andersson, telecom analyst, Berg Insight.
Location targeting in combination with other contextual and behavioural segmentation greatly enhances the relevance of mobile advertising, Andersson added: 'Major brands are so far the main spenders, but location-based advertising and marketing has also opened the mobile channel for small local merchants. Local businesses can extend their marketing initiatives with mobile components such as location-sensitive coupons using online self-services, while big box retailers leverage enterprise LBA solutions for conquesting and to combat showrooming.'
The location-based advertising and marketing value chain is still forming and there are a large number of players involved in the ecosystem, noted Berg Insight. Since the value chain is fragmented and the industry has not yet reached maturity, many different roles are involved.
Companies range from location-based advertising and marketing 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 Yell and Yelp, and proximity marketing providers like Proxama, NeoMedia and Scanbuy.
A number of traditional mobile advertising players are also active in the location-based advertising and marketing space, for example Millennial Media, Madvertise and Nexage, as well as major digital and telecom players such as Google, Apple and Facebook.
