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Location-based mobile advertising to be worth 10.7 billion euros by 2018

The total value of the global real-time mobile location-based advertising and marketing market will grow from 1.2 billion euros (US$1.6 billion) in 2013 at a compound annual growth rate of 54 percent to 10.7 billion euros in 2018, according to a new research report from analyst firm Berg Insight.

The report stated the growth will correspond to 38.6 percent of all mobile advertising and marketing. Location-based advertising and marketing will thus represent around 7 percent of digital advertising, or 2 percent of the total global ad spend for all media, according to the report.

The report noted the past year has seen a number of significant developments in the real-time mobile LBA space. One example is the concept of beacons based on Bluetooth low energy.

"The concept of Bluetooth marketing has been reinvigorated following Apple's introduction of iBeacon in 2013," Rickard Andersson, a senior analyst with Berg Insight, said in a press release about the report.

While so far remaining sparsely deployed, Berg Insight anticipates that beacon adoption will take off in 2014 as retailers launch innovative marketing schemes and leverage the possibility to analyse how customers roam and dwell in stores and aisles.

"The burgeoning BLE-based beacon ecosystem is now populated by a large number of diverse players including PayPal, Qualcomm and startups such as Estimote, Swirl and Shopkick," Andersson said. He added that these companies constitute a completely new set of players competing alongside established LBA specialists like Verve, Placecast and xAd, LBS players including Intersec, Telenav and Waze, and operators such as AT&T, SFR and the UK joint venture Weve.