global market for Location Based Advertising is projected to reach $12.8
billion by the year 2017, according to Global Industry Analysts.
mobile Internet gaining in popularity and the proportion of smartphone sales
increasing, LBA market holds enormous potential. The market is driven by
favorable factors including spurt in number of GPS and Wi-Fi enabled phones,
increased merchandising and shopping activity among consumers, growing
popularity of mobile commerce, and increasing usage of Location based Social
based advertising (LBA) involves delivering strategic advertisement to users
based on their location. LBA is expected to stimulate growth in the wider
mobile advertising market as it presents immense opportunities for higher
return on investment as compared to other traditional advertising avenues.
being a relatively new phenomenon, LBA has created significant interest among
various stakeholders, with mobile handset manufacturers, service providers,
marketers, and application developers making aggressive moves to get a foothold
in the market.
and brands are enthusiastic about this new advertising avenue, which provides
them with the option to advertise personalized content to a wide and mobile
customer base. The ability to instantaneously connect users to places,
resources and people in their immediate vicinity promises to offer user unrivalled
for advertisers, location-enriched data promises to emerge into a powerful
resource tool for value addition. Location based advertising enables behavioral
targeting, leading to unrivalled levels of ad customization that heightens the
relevancy of the same to the customer, and also the chances of consummating a
are now becoming increasingly receptive regarding the sharing of locations with
services and applications in exchange for local, well-timed and appropriate
promotions and deals, reflecting a shift towards location relevant ads being
provided by location-based applications.
United States and Europe dominate the global LBA market, as stated by the new
market research report on Location Based Advertising. Both technological as
well as economic advancements are responsible for driving mobile advertising
and marketing sector in the US. Trends in the technological arena include
increase in the number of smart phones, enhanced user interfaces, increased
speed and enlarged storage, while the economical advancement includes packaged
currently a fledging market compared to the US, LBS in Europe flaunts robust
growth potential with the last couple of years witnessing the launch of a wide
range of LBS services across the continent.
the concept of contextually related and location based advertisements is novel,
there is a rise in awareness regarding mobile based advertisements,
specifically owing to the introduction of 3G smartphones with larger screens
that has enabled the growth of mobile media.
out of 3G technologies, which delivers rich data forms at faster rates is
providing further impetus to the LBA market. Spurred by this development, LBA
market is expected to take rapid strides in developing countries.
addition, the LBA market is also being fostered by the increasing penetration
of GPS enabled handsets that enable LBA by providing information about the
users exact geographic location. Integration with online social platforms is
expected to drive LBA due to real time dispersion of information amongst the
customer’s friend circle.
check-in features are also leveraged upon by brands for geo-social applications
to deliver promotions and coupons when customers enter their store or when
customers are located within a defined area around the store.
a new and evolving concept, the LBA market faces certain teething problems,
which need to be resolved in order for the market to realize its full
potential. Marketers are yet to grasp an understanding of how to maximize
potential from personalization that LBA services can provide.
addition, separate costs associated with designing and advertising, absence of
consistent and reliable methods for measurement of metrics and privacy invasion
also hamper higher adoption of LBA.
ABI Research recently reportedthe location-based services (LBS) and advertising (LBA) markets have come under
intense scrutiny, with privacy legislation a major focus because of recent
temporary debate will not prevent the future success of location-based services,
marketing and advertising, all of which will be based on location analytics the
aggregation and analysis of location information to identify trends that will
enable new services and more effective advertising, according to ABI Research.