U.S. location-based ads to reach $6 billion by 2015

Location-based service advertising, which offers local information such as restaurants and shops through mobile devices based on consumers’ location, will exceed one-third of all mobile advertising by 2015, up from 18.5 percent in 2010, according to a new study by Pyramid Research.

By 2015, location-based advertising will be worth US$6.2 billion, up from $588 million in 2010.

Location-based advertising will contribute 60 percent of all location-based revenue by 2015, Media Post reported.

"The different components of mobile advertising (including search, display and messaging) are all growing. However, local search will be the most important driver of location-based advertising revenues,” said Jan ten Sythoff, analyst at large for Pyramid Research.

Navigation applications are shifting to a search-funded model, while many companies are "looking to capitalise on the growth of local search," he added.

One of the key driver to local-base advertising business is the continued growth of smartphones and mobile tablet GPS-based devices, according to the analysts.

North America, with high GPS handset penetration, is the largest region for this advertising growth, while in Japan and South Korea it is also high. In Europe, GPS penetration is rather lower, Pyramid Research pointed out.

Image: Andrew Patrick