Location-Based Advertising and Marketing – 3rd Edition
Location-Based Advertising and Marketing is the third
consecutive report from Berg Insight analysing the latest
developments on the location-targeted advertising market
This strategic research report from Berg Insight provides you
with 190 pages of unique business intelligence including
5-year industry forecasts and expert commentary on which
to base your business decisions.
This report will allow you to:
Identify tomorrow’s most profitable LBA opportunities in the
Understand the fundamentals of the ad-based mobile
media revenue models.
Recognise the key enablers of growth in the LBA market.
Comprehend the relative importance of digital channels
compared to other advertising media.
Learn about the experiences of LBA campaigns by top
Profit from valuable insights about LBA business models.
This report answers the following questions:
How can location technology improve the relevancy of
What are the experiences from mobile LBA campaigns
How should mobile LBA be integrated in the marketing
Which categories of companies can leverage mobile
Which are the LBA specialists that stand out of the
How are mobile operators such as AT&T, Orange and
SFR approaching LBA?
How are traditional mobile advertising players and major
digital and telecom players positioning themselves in this
How well suited for LBA are the existing and future mobile
Which are the main drivers and barriers on the market?
The mobile channel is gradually strengthening its position in the marketing media mix as
smartphones are becoming ubiquitous and drive mobile media usage. One of the key
developments in mobile advertising is the increasing integration of location-sensitivity, which
releases the full potential of the mobile channel. A notable divide can be made between static
and real-time location-based advertising (LBA). Targeting by static variables involves using
information which is part of user profiles such as place of residence and work. Real-time
location targeting instead uses location information which is gathered when an ad is delivered
to a mobile user. Such LBA campaigns leverage the same type of technologies to determine
user location as other location-based services (LBS). Common methods include GPS, Cell-ID
and Wi-Fi positioning which are all based on real-time information.
Targeting by location in combination with other contextual and behavioural segmentation
greatly enhances the relevance of mobile advertising. It has been demonstrated that locationtargeted
ads generate considerably higher returns than conventional mobile advertising. The
associated eCPM and CTR levels are several times higher. Berg Insight estimates that the
total value of the real-time mobile LBA market worldwide was € 1.2 billion in 2013,
representing 14.5 percent of the total mobile ad spend. Growing at a compound annual
growth rate of 54.0 percent, the real-time LBA market is forecasted to be worth € 10.7 billion
in 2018, corresponding to 38.6 percent of all mobile advertising and marketing. This means
that location-based advertising and marketing will represent around 7 percent of digital
advertising, or 2 percent of the total global ad spend for all media. Asia-Pacific is estimated to
be the largest LBA market in 2018, followed by North America and Europe.
Key drivers for LBA include the growing adoption of both outdoor and indoor location
technologies, as well as the increasing consumer acceptance of LBS in general. The market
is favoured by the recent entry of a number of major enterprise players. Big-box retailers can
leverage LBA to combat both online and physical competitors. LBA further opens up the
mobile channel for new advertisers such as local merchants. The fact that LBA has higher
performance has moreover translated into premium rates. The main barriers to adoption are
related to the inherently limited reach of LBA which acts as a mental hurdle for advertisers.
Education of advertisers and new methods for campaign performance evaluation are thus
called for. Privacy issues can further not be ignored, but can be beneficially handled by
privacy control options beyond simple opt-in mechanisms. The demand for geo-targeting
remains comparably limited, but is bound to increase given the proven results such
campaigns generate. The quality of location data is moreover expected to gradually improve.
The LBA value chain is still forming and there are a large number of players involved in the
ecosystem. The industry remains fragmented and far from mature. Many different companies
are involved, ranging from LBA specialists such as Verve, Placecast and xAd, to LBS players
including Intersec, Telenav and Waze, and operators such as AT&T, SFR and the UK joint
venture Weve. There is furthermore an abundance of location-aware applications and media
which serve geo-targeted ads, with examples such as Foursquare and Shopkick. Other
stakeholders include coupons and deals providers including Yowza!! and COUPIES, search
solutions such as YP, Hibu and Yelp, and proximity marketing providers like Proxama,
NeoMedia and Scanbuy. A number of traditional mobile advertising players are also active in
the LBA space, for example Millennial Media, Madvertise and Smaato, as well as major digital
and telecom players such as Google, Facebook and Apple. The latter is together with a range
of other players pushing for BLE beacon adoption which is expected to take off this year.
There are a number of key takeaways from the current trends in LBA. Geo-targeting improves
the performance of mobile marketing and greater shares of ad budgets are devoted to LBA.
High-precision real-time geo-targeting is still sparsely used but is expected to get a boost in
the near term. Best practices for LBA furthermore include the use of sound opt-in procedures
and individual privacy measures, as well as ensuring that location data is combined with
additional contextual and behavioural data to increase relevance. Current important highvolume
LBA formats include mobile search and SMS campaigns. New developments
moreover include real-world retargeting and mobile attribution solutions. The latter can prove
the effectiveness of LBA by quantifying the impact on in-store visits and purchases. Berg
Insight anticipates that geo-targeting gradually will become ubiquitous and available across
the entire mobile channel.
About the Author
Rickard Andersson is a Senior Analyst with a
Master’s degree in Industrial Engineering and Management
from Chalmers University of Technology. He joined Berg
Insight in 2010 and his areas of expertise include Mobile
Advertising, mobile VAS and commercial vehicle telematics.
Berg Insight offers premier business intelligence to the
telecom industry. We produce concise reports providing key
facts and strategic insights about pivotal developments in
our focus areas. From time to time we also perform custom
research assignments. Our vision is to be the most valuable
source of intelligence for our customers.