Location Based Advertising Market to Hit Nearly $15 Billion by 2018

Story By Nathan Eddy | eWeek

Location based advertising and marketing will thus represent around 7 percent of digital advertising, or 2 percent of the total global ad spend for all media, according to a Berg Insight report.

The total value of the global real-time mobile location-based advertising and marketing (LBA) market will grow from $1.66 billion in 2013 at a compound annual growth rate (CAGR) of 54 percent to $14.8 billion in 2018, according to a research report from the analyst firm Berg Insight.

This will then correspond to 38.6 percent of all mobile advertising and marketing. Location-based advertising and marketing will thus represent around 7 percent of digital advertising, or 2 percent of the total global ad spend for all media, the report projected.

The report also highlighted some of the recent developments in the real-time mobile LBA space, including the concept of beacons based on Bluetooth low energy (BLE).

While so far remaining sparsely deployed, Berg Insight anticipates that beacon adoption will take off in 2014 as retailers launch innovative marketing schemes and leverage the possibility to analyze how customers roam and dwell in stores and aisles.

“The concept of Bluetooth marketing has been reinvigorated following Apple’s introduction of iBeacon in 2013,” Rickard Andersson, senior analyst with Berg Insight, said in a statement.

Online payment companies constitute a completely new set of players competing alongside established LBA specialists like Verve, Placecast and xAd, location-based services (LBS) players including Intersec, Telenav and Waze, and network operators such as AT&T, and the U.K. joint venture Weve.

“The burgeoning BLE-based beacon ecosystem is now populated by a large number of diverse players including PayPal, Qualcomm and start-ups such as Estimote, Swirl and Shopkick,” Andersson continued.

A March report from Berg revealed the social networking and entertainment category has now become the largest LBS segment both in terms of number of active users and revenues.

It is comprised of a broad set of services that can be segmented into general social networking, messaging apps, friendfinders and games.

Mapping and navigation is the second largest segment in terms of revenues and the third largest in terms of number of active users. Specifically, local search is now the second largest LBS category in terms of active users and the third largest in terms of revenues.

In North America, where adoption of GPS-enabled handsets is high, an estimated 60 percent of all handset users now access location-based services at least monthly.

A September 2013 report from Pew Research found nearly three-quarters (74 percent) of American adult smartphone owners ages 18 and older say they use their phone to get directions or other information based on their current location.

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Story By Nathan Eddy | eWeek