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Mobile Local Search Ad Revenues to Reach $1.3B by 2013

US mobile search and display advertising revenues are expected to grow to $3.1 billion by 2013, from $160 million in 2008, representing a compound annual growth rate (CAGR) of 81.2%, according to a forecast report from The BIA Kelsey Group.

During the same period, the firm forecasts mobile local search advertising revenues will increase from $20 million to $1.3 billion, a CAGR of 130.5%.

The US Mobile Local Media Forecast (2008-2013) also predicts that percentage of mobile searches that have local intent will increase from 28% in 2008 to 35% in 2013, though the  local total ad market (across all media) will contract in 2009 and 2010. This will be led by small businesses, which will accelerate the shift to interactive products.

The shift to interactive products, combined with a lack of traffic to fulfill budget quotas on geo-targeted search products, will cause publishers to accelerate the building of mobile sites as they look for incremental traffic, The Kelsey Group said.

“As mobile data consumption rises, we expect local marketing to be a big winner,” said Michael Boland, program director, Mobile Local Media (MLM), The Kelsey Group. “There is a strong correlation between local search and the mobile use case, which will cause a good portion of the ongoing mobile application boom to focus on local.”
Additional report findings:

• The number of mobile web users will reach 95 million by 2013.

• There currently  are 54.5 million mobile internet users in the US, representing 25% of online users.
• Approximately 15% of iPhone applications are local.

About the report: Data for The Kelsey Group’s Mobile Local Media Forecast (2008-2013) are based on interviews, company reports, market surveys, third-party resources, usage trends,  knowledge of various players, expected company outcomes, various types of performance-and CPM-based advertising, ROI ad conversion rates, and strategic opinions about the future direction in each of the three forecast areas. The forecast is highlighted in the report “Going Mobile: The Mobile Local Media Opportunity,” distributed to clients of the firm’s newly created MLM advisory service.