Mobile Ad Spending Forecasted To Surge

A new forecast from research firm BIA/Kelsey predicts mobile ad spending will reach $72 billion in the U.S. by 2021. That’s an increase of about 118% over 2016 spending, which the firm placed at $33 billion.

“The smartphone revolution turns 10 this year, and we’ve come a long way,” said Mike Boland, chief analyst for BIA/Kelsey and the author of the report. “But many are far behind, still operating with a desktop mindset. They’ll be left behind in the next era of mobile, defined by native-social, voice interfaces and multimedia, not banner ads and traditional search.”

Location-targeted spending is projected to grow from $12.4 billion last year to $32.4 billion in 2021, a 161% jump. That means that in four years, nearly half - about 45% - of mobile ad spending will be targeted by location, according to the research. One of the biggest success factors for local mobile is native thinking, which involves building content, apps and ads that mesh with a device, rather than retrofitting formats from legacy media. A smartphone’s location-tracking ability and inherent portability make location-targeted content a natural fit, according to BIA/Kelsey.

The firm also revealed projections for other mobile ad formats, including search, traditional display, messaging and video. Native-social, an emerging format, is expected to get a big spend boost, going from $10.2 billion in 2016 to $24.2 billion in 2021. The growth stems from the format’s advantages, high performance and resulting demand. For example, BIA/Kelsey notes, mobile screens lack real estate for traditional top and side banner ads that ruled the desktop web. A vertically scrolling feed conversely holds greater capacity for ad inventory.