Mobile advertising to reach $2.9 billion by 2014

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Ad revenue from mobile will grow to $2.9 billion by 2014, according to a forecast released by BIA/Kelsey on December 1. The prediction represents a compound annual growth rate of 43% for the sector, which brought in $491 million in 2009.

The BIA/Kelsey U.S. Mobile Ad Forecast (2009–2014), which based its projections on formulas assessing current ad rates and sales, predicted that search advertising would see the fastest growth, from $59 million to $1.6 billion over the five-year period.

“As we get more smartphones in our hands and browser technology improves, there will be more people opening up the mobile browser through search,” said Michael Boland, senior analyst and program director for BIA/Kelsey.

He contrasts mobile search revenue's 93% compound annual growth rate with the 20% growth rate for SMS advertising. While currently the highest ad revenue at $226 million, SMS is only forecasted to grow to $562 million. Display advertising is expected to increase at a 31% growth rate to $803 million.

The forecast also broke out local advertising, predicting it to grow from $213 million in 2009 to $2.03 billion in 2014. With the expansion of geo-location and GPS technology, the potential of this channel is just beginning to be harnessed, according to Boland.

“The location-based campaigns have better performance metrics. The revenue is higher than when it's not as targeted,” said Boland. “The usage, behavior and technology are there, but now it's just whether the marketer will follow.” 
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