In its second-largest acquisition, Amazon buys the company for $970 million.
The amount of money spent on those ads will hit $5.01 billion in 2016.
The amount of money spent on mobile ads with a local focus will grow from $784 million last year to $5.01 billion in 2016, a 539% leap and an annual growth rate of 45%, predicts a new study from media research and consulting firm BIA/Kelsey.
Studies have shown that most searchers on mobile devices have local intent, meaning they are looking for something—a store, a restaurant, a product, a local sale or deal—near to where they are at the moment. Mobile local paid search ads, for example, can drive a frenzied consumer in a snowstorm to an m-commerce site where he can quickly find the nearest location of a hardware store chain to purchase a snow blower.
The firm segments mobile local ads into four distinct formats: search, display, text messages and video. Search is growing the fastest and is the biggest driver of growth in mobile local advertising, the study says, in part because mobile paid search ads perform better than the other formats.
Mobile local paid search ad spending hit $390 million in 2011, BIA/Kelsey says. It will reach $691 million this year and $3.21 billion in 2016. Mobile local display ad spending hit $299 million in 2011, the firm says. It will reach $506 million this year and $1.32 billion in 2016, the firm predicts. Mobile local text ad spending hit $81 million in 2011, and is projected to reach $101 million this year and $182 million in 2016. And mobile local video ad spending hit $14 million in 2011, BIA/Kelsey says. It will reach $29 million this year and $292 million in 2016, the firm predicts.
With mobile local paid search ads taking the biggest share of mobile local advertising, the research firm says a trend retailers and other companies should watch closely is the number of searches conducted on desktops compared with the number on mobile devices. There will be more mobile searches than desktop searches by 2015, the firm predicts.
Following are the firm’s projections, in billions, for total desktop and mobile searches:
- 2012, desktop 61.6, mobile 30.7
- 2013, desktop 69.2, mobile 46.0
- 2014, desktop 77.1, mobile 63.7
- 2015, desktop 84.0, mobile 85.9
- 2016, desktop 85.6, mobile 113.4