App advertising to reach $44bn by 2020

A threefold increase forecast over the next five years.
Source- Getty Images
Source- Getty Images

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New data from Juniper Research has found that app advertising, using context and location targeting, will exceed $44 billion by 2020, up from an estimated $13 billion last year. As the mobile advertising landscape matures, the simple geofence is being usurped by contextual data such as a user’s interests, real-time location and even political leanings.

The new research, Context & Location Based Services: Advertising, Retail & Emerging Technologies 2016-2020 has found that social applications are providing a highly accessible pool of rich user data for advertisers. Indeed, Facebook’s recent earnings call highlighted the tremendous growth opportunity of this sector, with North American ad revenues per user rising by 60% over the last 12 months.

Meanwhile, players such as Pinterest are developing tools that serve to reduce the intrusiveness of adverts, with user-friendly approaches seen as crucial in avoiding a rising tide of ad-blocking utilities.

According to Juniper Research, in terms of ad revenues, the leading social applications using mobile location data to target users are Facebook, Twitter, Instagram, WeChat and Sina Weibo. The research found that social apps are beginning to incorporate a wide range of capabilities beyond their core function as peer-to-peer communications tools. “This trend has been highlighted by apps such as WeChat in China, while Facebook Messenger has recently partnered with Uber to deliver ride hiring services” noted research author Steffen Sorrell. “This means that social apps are transforming into platforms themselves, offering even more data for ad campaigners.”

Additionally, the research found that several factors are creating a ‘perfect storm’ for the commercialisation of indoor location services. Bluetooth beacon deployments, improved Wi-Fi services, and the re-emergence of UWB (ultra-wide band) as an enabler of location based services are all likely to combine in the near-term to offer proximity marketing opportunities as well as commercial asset tracking capabilities.

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