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Mobile Map Services to be Funded by Location-Based Advertising

by | 2 minute read

While smartphone users may have complained about Apple’s misstep with the maps portion of the latest iPhone, there’s a lot more at stake here than mobilephonemapspersonal inconvenience. Maps represent a portion of the growing location-based search (LBS) market.  Consumer and ad spending for LBS are predicted to soar through 2017.

Strategy Analysts have reported on this market in their new Consumer and Advertising Expenditures on LBS to Reach $6 Billion by 2017 study. With consumers using maps more frequently, it’s only logical that advertising dollars will follow. The company’s analysts predict total mobile and search spending to jump to the $30 billion mark by 2017. With LBS at $6 billion, the sector would comprise 20% of the market.

Currently, about 80% of smartphones have location-based services. And the company’s report predicts that 640 million smartphone owners will be using maps by 2017. Some operators in this market have attempted to charge consumers for added map services but Nitesh Patel doesn’t see this as a rapid growth sector. Instead, operators are opting for freemium models which means that LBS advertising will generate at least half of the industry revenue.  David MacQueen, Director of the Strategy Analytics Wireless Media Strategies service points out, “The ability to advertise relevant offers, products and services to nearby consumers at the point when those consumers are searching for those products and services represents a compelling opportunity for local businesses.”

Apple, Google and Nokia are likely to be the key providers in this market but they may be relying on local media sales reps to sign up small businesses to move some of their advertising to this space.

[Sources: Johnson, Lauren. Location-based search revenue. Mobilemarketer​.com. 10 Dec. 2012. Web. 17 Dec. 2012; Local Search Revenue Dominates. Strategyanalytics​.com. 6 Dec. 2012. Web. 17 Dec. 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.