Forecast: Geotargeted display ads to reach $1.9 billion

In 2008, geographically targeted display ads brought in just under $900 million. Forecasters predict that by 2013 geo-targeted display ad revenue will reach nearly $2 billion, a 66% increase.

Much of the increase will likely be due to more local advertisers - auto dealers, local movie theaters or restaurants - increasing their use of geo-targeted display ads, which are expected to account for 15% of the entire display ad market by 2013.

"The basis for growth of the geo-targeted ad market is rooted in the economics of existing search resellers," said Matt Booth, senior vice president and program director, Interactive Local Media, BIA/Kelsey. "The effective strategy for companies like AT&T, ReachLocal, Yodle and others will be to use geo-targeting to increase margins by shifting spend from paid search to geodisplay. Simply, if a lead from search costs $30, these companies will shift to display where similar quality leads can be obtained for less. The display ad networks have so much excess inventory; they will run whatever impressions are needed to meet reseller targets."

By geographically targeting ads to consumers marketers can substantially increase their ability to reach in-market consumers. For example, an auto dealer can now target consumers in specific zip codes or regions rather than blanketing an entire state or block of content sites. By knowing where consumers are, marketers have a better chance of engaging as consumers begin researching big ticket purchases such as automobiles, new homes or even computers.

Tags: advertising, BIA/Kelsey, display advertising, geo-targeting, geographical targeting, hyper-local, local ad spend, local advertising, online advertising