Location-Based Advertising Market

Market Overview

The global location-based advertising market size was valued at USD 69.69 billion in 2021. It is predicted to reach an estimated value of USD 288.53 billion by 2030, registering a CAGR of 17.1% during the forecast period (2022-2030). 

Location-based advertising integrates mobile advertising with location-based services. It offers a broad range of attributes to its consumers, which includes reaching consumers when they are receptive, boosting businesses during quiet periods, connecting more consumers, and expanding exposures to audiences. Location-based advertising allows marketers to create an effective database and be better placed to predict where to spend.

The exponential increase in digitalization among industry vertical, increasing penetration of internet and GPS enabled mobile devices, and surging utilization of consumer data by marketers are the factors fuelling the market growth. However, data privacy concerns and accuracy of location targeting hinder the market growth.

Market Dynamics

Exponential Surge in Digitalization among Industry Verticals to Drive the Market 

With the surge in the adoption of smartphones and internet connectivity across the globe, the demand for location-based advertising has increased significantly. Digitalization enables verticals to easily cater to the attraction of consumers and enhance their global footprint within minimum budgets. Furthermore, increasing penetration of internet connectivity, such as the LTE network, plays a crucial role in reaching out to as many consumers as possible via digitalization. For instance, Google’s revenue jumped from 32.4% in 2017 to 33.8% in 2019.

Regional Analysis

North America to Dominate the Location-Based Advertising Market

North America dominates the location-based advertising market as the region possesses a robust presence of key players, such as Google and Facebook Inc., that are offering location-based services. The early adoption of technologies among enterprises to enhance business operation is also one of the factors escalating the market growth. Moreover, increasing social media penetration rate in the region also leads to the development of the market. For instance, according to Statista 2019, approximately 80% of the U.S. population used internet connectivity, of which 60% used social media.  

Increasing Penetration of Smart Phones and Internet Connectivity in Asia-Pacific to Drive the Market Growth

Asia-Pacific is the fastest-growing region in the location-based advertising market, owing to the increasing penetration of smartphones and internet connectivity in developing economies, such as India, China, and Indonesia. Moreover, increasing attraction of local business owners towards low-cost online advertisement paves the way for the growth of the market. Increasing presence of key players offering location business services accelerates the growth of the market. For instance, Near Pte Ltd is offering a location-based mobile advertising platform in Singapore and has been instrumental in serving regions, such as Malaysia and Indonesia. The following figure depicts the surge in the online advertisement in the Asia-Pacific region from 2016–2019.

Segmental Analysis

Push Type Segment to Grow with the Highest CAGR during the Forecast Period

The push type segment is projected to grow with the highest CAGR on account of the emergence of innovative technologies such as Artificial Intelligence (AI), Machine Learning (ML), and digital OOH. Furthermore, opt-out type services in push type are preferable type services deployed by advertisers. As per the survey by Airship in 2019, approximately 51% of users prefer push type notifications. The pull type segment, on the other hand, is anticipated to grow at a faster rate during the forecast period due to the increasing internet penetration rate and surging use of smartphones.

Increasing Usage of Social Media for Brand Awareness to Drive the Segment Growth

The multimedia segment is largely driven by the increasing usage of social media, which enables verticals to target consumers based on locations and interests. Similarly, social media and search engines are enabling verticals to easily make ads based on interest to cater to more audiences. As per the survey of Airship, in 2019, 2.91 billion people were using social media platforms and the number is projected to grow considerably during the forecast period. In June 2020, GroundTruth launched Connected TV solutions and Desktop offering, coupled with its existing mobile capabilities, to expand the reach of location-based marketing through cross-device channels.  

Public Spaces Segment to Dominate the Market during the Forecast Period

The public spaces segment dominates the market on account of the surging adoption of location-based services by enterprises and institutions. Institutions and enterprises, including auto-dealers, financial institutions, restaurants, retails and healthcare institutions, are adopting location-based advertising to attract more consumers. Moreover, verticals, such as banking institutions, healthcare and public institutions, are enhancing their mobile applications to inbuilt geo-locations services in order to offer more customized services.

In January 2017, Telesoft Technologies launched location-based services in India to address the fast-growing location-based services and subscriber tracking applications market. This enables Telesoft Technologies to provide OEMs and System Integrators the location-related signaling information that enables them to provide subscribers with sophisticated, geographically targeted applications.

Recent Developments

In May 2020, GroundTruth announced a partnership and integration with Yext, Inc., an online brand Management Company, to develop customized location-based advertising campaigns for advertisers that employ the Yext platform

In April 2020, Foursquare and Factual Inc., a location data company, partnered together to offer location-based services worldwide

In August 2019, inMarket, the leader in digital advertising for the physical world, acquired Thinknear, a premier provider of location-based services. Thinknear and inMarket will create a marketing technology platform with clients across the automotive, quick service restaurant, retail, finance, healthcare, and consumer packaged goods industries.