Local search leads the way in mobile ad revenue

The inherent connection between mobile and local SEO has only grown stronger in recent times. A recent study on local search behavior showed that consumers who searched on a smartphone, tablet and PC were four times more likely to conduct a local search than users just searching on a PC. Local search marketers have seen the advantages of mobile, and according to new numbers on the future of mobile advertising, local businesses are in a position to cash in big on the mobile marketing revolution.

Local marketing consultancy BIA/Kelsey recently released its U.S. mobile local advertising forecast, projecting mobile local advertising to grow from $664 million in 2011 to $5.8 billion in 2016. The compounded annual growth rate (CAGR) of 54.2 percent opens up a multitude of opportunities for businesses to profit if they develop a local search marketing strategy that also integrates mobile techniques. The forecast said search was the largest mobile local revenue component: It will grow from $390 million in 2011 to $3.2 billion 2016, a CAGR of 52 percent.

"Growth drivers include smartphone penetration, location data, ad targeting innovation and advertiser evolution to utilize these factors for higher-performing mobile local ad campaigns," said Michael Boland, program director of mobile local media for BIA/Kelsey. "New mobile ad formats will also drive demand including Facebook’s quickly evolving options like sponsored stories and app install ads."

Local mobile spending will also see a significant uptick as more companies recognize local mobile advertising as a crucial source of revenue and exposure. Spending on local is also slated to outpace spending on national mobile advertising. In 2011, spending in the two channels accounted for roughly $1.6 billion - $1 billion was spent on national, leaving local advertising with a 48 percent share. By 2016, $9.9 billion will be spent on mobile advertising: $4.1 billion on national and $5.8 billion on local, increasing local's minority share to a dominating 58 percent of all mobile advertising.

Forecast author Boland also wrote an exclusive insight piece for the forecast on Search Engine Watch. He further advised local businesses to understand the considerable potential mobile has and the effect it will have on their SEO strategy. Boland said 50 percent of mobile search queries have a local intent currently. One year ago it was 40 percent, and the year before that it was 30 percent.