Local mobile advertising is on the move, so says a Borrell Associates memo to clients. Local mobile advertising is expected to double in 2013. In some markets the number may be in the tens of thousands of dollars; in the largest, it’s $100 million+. The forecast is supported by Borrell’s ongoing surveys of small and medium businesses (SMBs), as well as updated data they filter into their local market Compass reports.
A key data point they saw earlier this year showed that 37% of SMBs who had not yet tried mobile advertising said they were likely to do so within the coming year. Moreover, a stunning 83% of those who had actually engaged in
some sort of mobile campaign said they were likely to do so again. “We suspect that the word is getting out: Mobile marketing works.”
Last year local advertisers spent $1.5 billion on mobile media; this year Borrell is forecasting it will be $3.2 billion. “So while total mobile advertising is likely to increase about 34%, we’re expecting local to increase 105%. That’s similar to the rush to buy banners and local search advertising that we saw in 2004 when Internet access had hit critical mass, or 50% of all households. Online advertising
doubled that year.”
Last year mobile ads accounted for 8% of the $18.5 billion spent on local online advertising. This year’s growth will put its share at 13% of $24.3 billion.
Local is also becoming more important to the mobile advertising industry. The first adopters to any new medium tend to be national marketers. But their local counterparts are quickly coming on board, accounting for 13% of all mobile spending in 2012 and 20% this year. In 16 U.S. Digital Marketing Regions (DMRs), it will account for more than one-fourth of all mobile ad spending.
The market-by-market totals are still relatively small. They range from $10,000 in Dupree, South Dakota, a region that includes six rural counties, to $168 million in New York City. Markets like Seattle, Baltimore, Milwaukee and Miami will see about $30 million this year, double what local advertisers spent in those markets last year. Midsize markets such as El Paso, Hartford, Birmingham and
Syracuse will see about $10 million.
Not all growth rates are the same. Of the 513 markets, 108 are seeing mobile advertising expenditures double. Only six markets will see less than 50% growth. Every market has its own nuances and unique makeup. Underlying factors include population, the prevalence of mobile device ownership and use in that market, the makeup of business types in the market and the amount of
people coming into and out of the market for tourism, business travel, etc.
For example, a small market whose economy is based around a local college may have a higher growth in mobile advertising due to the predominately younger group of tech-savvy students and influx/outflow of parents coming to visit. In another example, a big market may have lower growth due to a high number of lower-income households and very little tourism.