Mobile, Online Local Ad Spending Will Double in the Next 5 Years

By Gary Kim May 17, 2012

Mobile and online will account for the largest increase in local ad spending, nearly doubling from $11.1 billion in 2011 to $21.8 billion in five years, with a compound annual growth rate of 14.4 percent, according to BIA/Kelsey.

Local advertising spending will experience a compound annual growth rate of 2.6 percent between 2011 and 2016, with revenues climbing from around $132 billion to more than $150 billion.

The major source of advertising in the mobile and online space will be technology and telecom, which will spend $5.1 billion by 2016 (up 80.7 percent). Other top spending categories include retail ($4.5 billion), automotive ($2.6 billion) and healthcare ($815.3 million).

“While we expect to see changes in ad spending in some advertising categories, it is significant to note that television and radio continue to hold their own, while out-of-home, online and mobile are having an impact on the overall share,” said Mark Fratrik, VP and chief economist, BIA/Kelsey.

Technology and telecommunications spending will increase by $2.9 billion by 2016. Those industries will increase investment in online and mobile advertising by 35.1 percent, while reducing its spending in newspapers and magazines, direct mail, TV and radio.

In part, that preference for mobile and online advertising by technology and telecom providers is based on the simple fact that those industries sell mobile and online products. Both retail consumer electronics and telecom and cable firms also traditionally are heavy advertisers, given the degree of competition in those markets.

Some service providers and large consumer electronics manufacturers also have significant advertising operations of their own and can leverage those assets.

Amobee, for example, is owned by Singtel, which operates in some 20 countries throughout Asia and serves 434 million mobile customers and has investments in Bharti Airtel (India), Telkomsel (Indonesia), Globe Telecom (the Philippines), Advanced Info Service (Thailand), Warid Telecom (Pakistan) and PBTL (Bangladesh).

Consider that between the Singtel audience of 434 million, and screens served by other customers Vodafone and Telefonica, the Amobee reach is about a billion people. That’s a serious scale, and an owned asset that can be used on behalf of Singtel and its partners for advertising purposes.




Edited by Braden Becker

Contributing Editor

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