09.07.2011

Growth potential of Mobile Location-Based Advertising

Mobile advertising hasn't been really a relevant revenue stream for the mobile communication industry in the last decade. With smartphones we have experienced a rise of mobile advertising. Now the internet of things will create more and more interaction with the offline world.
In an Interview Andrew Stephen, Professor of Marketing at INSEAD, explains the patterns they are going to research. As a feasible technology he mentions a type of location based advertising called SNIPING. When a consumer enters an offline store he will be approached with a message on the smartphone offering incentives either for the affected store or for a competitors offer. INSEAD's study explains who you are going to target, what type of consumer does it work with and what the content is that will resonate.

So what are the figures expected by the researchers? According to the latest report from Gartner global mobile advertising revenue is expected to reach:

  • $3.3 billion in 2011 and
  • $20.6 billion by the end of 2015.

This represents a yearly growth of over 40% mainly in North America and Western Europe (Read more: dazeinfo.com). But mobile ad budgets will be only one part of the mobile advertising growth. Pyramid (http://pyr.com) expects location based advertising to reach:

  • from $588 million in 2010 to
  • $6.2 billion in 2015

And now this is the metrics desired in this blog: 60% yearly growth! This represents a quarter of the whole mobile advertising pie by doing a direct comparison to the Gartner figures. Start-ups like Yelp.com, Poynt.com or Hotelbooker.com are in a good position. What does this mean for German startups like Qype.com? Well, they are still limited to their markets and North America shows the highest penetration of smartphone and GPS-devices, but Europe will certainly rock as well!

Read more (in German): Boom bei Location-Based Advertising

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