BIA/Kelsey’s U.S.

Mobile Ad
Revenue Forecast, 2009-2014
Mobile Local Media
Nov. 29, 2010

excerpt
 U.S. Mobile Advertising Forecast 2009-2014

$3,500
CAGR: 43%
$2,946
$3,000

$2,500
$2,136
US$ Millions

$2,000
$1,591
$1,500
$1,186
$1,000 $790
$491
$500

$0
2009 2010 2011 2012 2013 2014

Note: Numbers are rounded.

© 2010 BIA/Kelsey 4
Mobile Ad Formats: Definitions and
Drivers
Ad Format Definitions Key Inputs/Drivers

Search Text advertising applied Search volume, CTRs,

(National and Local) to search queries on CPCs, ad coverage.
mobile devices. Vetted against core
search engine revenues.
Display Display advertising Mobile Web use, page
(National and Local) applied to app and views, impressions,
mobile Web inventory. CPMs, sell through
Includes rich media. rates. Vetted against ad
network revenues.
SMS Commercial SMS SMS penetration,
(National and Local) messaging. volume, CPMs, sell
through. Vetted against
ad network revenues.

© 2010 BIA/Kelsey 9
 Share of Mobile Ad Spend by Format

$3,500

$3,000
$562
$2,500
US$ Millions

$2,000 $468

$1,581
$1,500 $390
$954
$1,000 $325
$548
$271 $307
$500 $226 $163 $803
$652 $714
$59 $554
$206 $356
$0
2009 2010 2011 2012 2013 2014
Display Search SMS

Note: Numbers are rounded.

© 2010 BIA/Kelsey 10
Format Breakdown and Growth in Scale

2014
$562
$803

2009

$226 $206

$59
$1,581

Display Search SMS

© 2010 BIA/Kelsey 11
 U.S. Mobile Advertising: Search

$1,800
CAGR: 93% $1,581
$1,600
$1,400
$1,200
US$ Millions

$1,000 $954

$800
$600 $548

$400 $307
$200 $163
$59
$0
2009 2010 2011 2012 2013 2014

Note: Numbers are rounded.

© 2010 BIA/Kelsey 12
 U.S. Mobile Advertising: Display

$900
CAGR: 31% $803
$800
$714
$700 $652
$600 $554
US$ Millions

$500
$400 $356
$300
$206
$200
$100
$0
2009 2010 2011 2012 2013 2014

Note: Numbers are rounded.

© 2010 BIA/Kelsey 13
 U.S. Mobile Advertising: SMS

$600 $562
CAGR: 20%
$500 $468

$390
$400
US$ Millions

$325
$300 $271
$226
$200

$100

$0
2009 2010 2011 2012 2013 2014

Note: Numbers are rounded.

© 2010 BIA/Kelsey 14
Mobile Local Advertising: Takeaways

• BIA/Kelsey defines mobile local advertising as that which

is targeted based on a user’s location and/or actionable
locally.
• This local targeting happens to different degrees, and
with different methods, within each of the advertising
formats examined above (search, display, SMS).
• BIA/Kelsey projects U.S. mobile local ad revenues to
grow from $213 million in 2009 to $2.03 billion in 2014.

© 2010 BIA/Kelsey 16
 Mobile Local Advertising 2009-2014

$2,500
CAGR: 57%
$2,025
$2,000
US$ Millions

$1,500 $1,402

$984
$1,000
$692

$500 $404
$213

$0
2009 2010 2011 2012 2013 2014

Note: Numbers are rounded.

© 2010 BIA/Kelsey 18
Forecast Methodology

• Forecast data are based on interviews, company reports,

market surveys, third-party resources, usage trends,
knowledge of industry players, media ad spend shifts,
and expected company outcomes.
• The forecast is divided into mobile ad formats, each of
which is bought and sold in different units and requires
different forecasting models.
• This “top down” approach is vetted against a “bottom up”
approach, which adds up revenues of top players in
each mobile advertising segment (i.e., mobile ad
networks).
• Traditional definitions of ad spending apply to this
forecast. This doesn’t include marketing or promotional
expenditures such as coupons.

© 2010 BIA/Kelsey 26
Questions and comments:
Michael Boland | mboland@kelseygroup.com | 415.462.1935

Copyright © 2010 BIA/Kelsey. All Rights Reserved.

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