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US mobile search advertising revenues will grow from $33.2 million in 2007 to $1.4 billion in 2012, or at a compound annual growth rate (CAGR) of 112%, according to a just-released forecast from The Kelsey Group (TKG).

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“Advertisers in the US are the most aggressive in terms of messaging to potential US consumers,” said Matt Booth, SVP and program director, Interactive Local Media, The Kelsey Group. “Given the relatively high spend levels, we believe advertisers will continue to look into innovative solutions, including mobile, that demonstrate a clear ROI on ad spend.”

The overall US local search market will grow from $922 million in 2006 (and reaching $1.2 billion this year) to $2.6 billion in 2011 – a CAGR of 23% for the five-year period, according to TKG.

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The usage of the two largest mobile search revenue contributors will substantially increase during the forecast period, according to Booth:

  • The number of mobile Internet users will grow from 37.9 million in 2007 to 91.7 million in 2012 – a 19% CAGR. 

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  • Ad-sponsored directory assistance (DA) will grow from 270 million calls in 2007 to 2.1 billion calls in 2012 – a 50% CAGR.

During the same period, overall directory assistance volume will grow at a 4% CAGR, according to TKG, with”¦

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  • Landline DA volume growth at -9%
  • Wireless DA volume growth at -1%
  • VoIP DA volume growth at 31%

The Kelsey Group’s mobile search advertising forecast comprises three distinct revenue and usage segments:

  • Ad-sponsored directory assistance (free DA): Consumers dial a phone for free directory assistance and other local information (examples: 1-800-GOOG411, Jingle Networks).
  • Mobile internet ads: Consumers use SMS, WAP, etc., to search or browse the internet for information (examples: Google Maps, Apple iPhone).
  • Multi-modal applications: Carriers and/or consumers opt to put voice-in and data-out products directly on the mobile device (examples: Tellme, V-Enable).

About the study: The mobile search advertising forecast is based on data collected through interviews, company reports, market surveys, third parties, usage trends, Kelsey Group knowledge of industry players, expected company outcomes, various types of performance and CPM-based advertising, ROI and conversion rates, as well as The Kelsey Group’s analysis and opinion of the future direction of each of these. Revenue estimates are based on “session conversion rates,” defined as the amount of revenues expected to be created based on anticipated ad placements during a mobile ad session.

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