Local Mobile Ad Spending to be Fueled by SMBs

Earlier this week, I highlighted the immr Local Search study that links rapid industry growth to the booming use of smartphones. The local mobile advertising market has been growing, too, though more slowly than originally projected by BIA/​Kelsey this year. But the company is predicting huge increases in the sector, fueled by small and medium size businesses (SMBs) as well as national brands.

Next year, the mobile ad market will essentially be evenly divided between local spending ($2.1 billion) and national spending ($2.2 billion). By 2016, local spending will account for 58% of the total U.S. mobile market.  SMBs are  a growing force in this sector. With an average advertising and promotional budget of around $3,000, the typical SMB spends over 30% of its resources on social media and mobile. This year, at least 14.7% of SMBs are now running a website optimized for mobile.

The rapid growth in local mobile means that the format will account for about 3% of the total local ad market by 2016. At that point, the local ad market will be worth $147.1 billion.  Analysts predict the continued erosion of market share for traditional media. While formats like newspaper, radio and TV account for 84% of the local ad market, that figure will drop to 74.1% by 2016. The rise of digital explains the change – with spending expected to reach 25.9% or $38.1 billion of the total. Mobile will be a big part of this change and contributing factors include:

  • More consumers owning smartphones
  • Heavier smartphone use in general
  • Larger ad space inventory in the mobile space

As a result, more SMBs will be scrambling to understand the mobile space and roll out their promotions in this format.

[Sources: Boland, Michael. Executive Summary. BIAKelsey​.com. 2 Nov. 2012. Web. 13 Nov. 2012; Eddy, Nathan. Social Media, Mobile Rises for SMBs. Eweek​.com. 5 Nov. 2012. Web. 13 Nov. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.