If location truly is everything, than it should be no surprise that location-based mobile advertising is set to explode over the next few years as the proliferation of smartphones continues and location-aware technologies improve.
According to forecasts this week by researchers BIA/Kelsey, advertisers will invest $690 million on local mobile ads this year, up to $2.84 billion by 2015. Overall spending on the channel will attract a total of $1.6 billion in 2011, and increase to $4.05 billion by 2015.
The increase in spending is likely a function of higher relevance, immediacy and consumer buying intent, which tends to be more prevalent at the mobile and location-based level than with standard print and digital media.
For example, if you can serve an ad to someone while they are actually in your store or business (Foursquare is a great platform for this), it is obviously much more relevant than a website banner viewed on a PC 30 miles away.
Immediacy is the message.
Ad volume growth will be compounded by premiums placed on location-targeted ads, the report said, and the emergence of self-service platforms and a focus on digital media at the local level will also play a key role.
Location, location, location.
As mobile marketing and payment processing over mobile devices - iPads, BlackBerrys, iPhones, Androids, ect. - continue to become the norm and consumers remain plugged in from almost anywhere at any time, new services are sprouting up to deliver marketing campaigns on the fly.
How these services are leveraged will be key to marketers' future success. However, one constant is that location will continue to be the main driver of local mobile advertising's growth. Because current generation smartphones and mobile computing devices are equipped with location awareness, large brand advertisers are developing campaign objectives by tailoring messages depending on audiences location.
And, generally speaking, as big business goes, so goes smaller business. Expect location awareness technology to draw in small and medium-sized businesses that are attracted to the improved response to location-driven ads.
Further enhancing growth in this space is social media and its natural extension into micro-location services. The ability to take these popular platforms wherever you go helps drive commerce and expands marketing opportunities.
These micro-location services offer deals and discounts when users "check in" at participating locations, and even local store owners now have the capability of offering incentives to people who tweet or "check in" each time they frequent a location.
While Foursquare revolutionized location-based services in social media, which essentially enables businesses to offer special discounts to a targeted audience, mobile location services like Shopkick are figuring out the best ways to immediately monetize them.
The Shopkick app allows users to collect "kickbucks" for checking in, as well as by scanning products using sticky bits in the store with mobile devices. This is also popular with marketers: Best Buy, American Eagle Outfitters, and Sports Authority are already on board.
The ROI and brand awareness.
If you still aren't convinced location-based mobile advertising is the future, consider news this week from two somewhat stodgy, but ultimately reliable companies that understand how to follow a trend.
Nokia announced it expanded its partnership with Microsoft to combine mobile-location and commerce-services business with its Navteq mapping unit. The move is designed to create a new class of integrated social location products and services for consumers, as well as platform services and local commerce services for device manufacturers, application developers, internet services providers, merchants, and advertisers, according to the company.
"Focusing on location and commerce is a natural next step in Nokia's services journey," CEO Stephen Elop says in the statement announcing the initiative.
Because brands and agencies are the largest source of mobile ad spending (see above graph) in the U.S., they are more likely to be the ones evolving campaign objectives, targeting parameters to the capabilities of the hardware. This includes native device capabilities like the touch screen, camera, voice, and most of all, location awareness, the report said.
And most importantly, this is how we get to an increase in location targeted advertising.
In turn, mobile advertising is moving “down market” to SMB and mid-market segments. While today it makes up a relatively small portion of the overall ad spend, the study shows mobile will be driven by a combination of self-serve tools (Adwords, Foursquare) and traditional online sales that are) that are increasingly bundled as mobile marketing with existing advertising.