Rating: The LBA value chain is still forming
A new report from market watchers, Berg Insight, entitled ‘Location-Based Advertising and Marketing’ (see here) estimates that location-based advertising (LBA) will account for 28.3 per cent of mobile ad spend in 2016. That corresponds to a compound annual growth rate of 90.9 per cent, so the real-time LBA market should be worth €4.9 billion in 2016. The company reckons that in 2011 the total global value of the real-time mobile LBA market was €192 million, representing 5.0 per cent of the total mobile ad spend. Asia-Pacific is estimated to be the largest LBA market in 2016, followed by Europe and North America.The figures also mean that location-based advertising and marketing will represent more than four per cent of digital advertising, or one per cent of the total global ad spend for all media.
Berg Insight says that the LBA value chain is still forming. Many different companies are involved, ranging from LBA specialists such as Placecast, xAd and LEMON Mobile, to operators including SFR, AT&T and O2, and LBS players such as Telmap, TeleNav and Waze.
Furthermore, there is an abundance of location-aware applications and media which serve geo-targeted ads, with examples such as WHERE, Loopt and Shopkick.
Included in the marketplace are coupons and deals providers including Yowza!!, GeoAd and COUPIES; plus search solutions such as Poynt and Qype.
Additionally there are proximity marketing providers like Qwikker, Proximus Mobility and Scanbuy.
A number of traditional mobile advertising players are also active in the LBA space, for example Millennial Media, Madvertise and Nexage, as well as major digital and telecom players such as Google, Apple and Nokia.
Current important high-volume LBA formats include mobile search and SMS campaigns.
Berg Insight however anticipates that geo-targeting gradually will become ubiquitous and available across the entire mobile channel.
The report provides some extremely useful definitions of the LBA sector. It says a notable division can be made between static and real-time location-based advertising (LBA).
- Targeting by static variables involves using information which is part of specific user profiles such as place of residence and work.
- Real-time location targeting instead uses location information which is gathered when an ad is delivered to a mobile user.
- Such location-based advertising programs and campaigns leverage the same type of technologies to determine user location as other location-based services (LBS). Common methods include GPS, Cell-ID and Wi-Fi positioning which are all based on real-time information.
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