PUBLISHER: Acute Market Reports | PRODUCT CODE: 1572351
PUBLISHER: Acute Market Reports | PRODUCT CODE: 1572351
The location-based advertising (LBA) market is the amalgamation of geospatial technology and advertising channels, where advertisements are displayed to potential customers based on their geographical location. This form of advertising hinges on the idea that targeting users in specific locations, in real-time, can lead to more relevant and timely ad delivery. Such precision in advertising offers businesses an edge in reaching out to consumers right when they're most likely to engage with a brand. The location-based advertising market is estimated to grow at a CAGR of 15.5% from 2024 to 2032.
Driver: Emergence of Mobile Commerce and On-the-go Consumption Patterns
One of the most significant drivers propelling the growth of the LBA market is the staggering rise of mobile commerce and the prevalent on-the-go consumption patterns. Modern consumers are increasingly reliant on their smartphones and tablets, not just for communication but for shopping, entertainment, and other daily activities. According to data from Statista, the global mobile commerce sales reached approximately $2.91 trillion in 2020, accounting for 72.9% of total e-commerce sales. This dominance of mobile commerce illustrates how businesses can no longer ignore the role of mobile devices in a consumer's purchasing journey. Leveraging location-based advertising, businesses can offer real-time deals, discounts, or advertisements when users are in proximity to their physical stores. For instance, if a user is near a coffee shop, they might receive a promotional offer on their favorite brew, enticing them to make a purchase.
Opportunity: Integration with Augmented Reality (AR) for Enhanced User Engagement
An exciting opportunity in the LBA landscape is its potential integration with Augmented Reality (AR). Imagine walking down a street, and through AR glasses or your smartphone, you see virtual billboards or pop-ups showcasing offers from nearby shops, restaurants, or theaters. Tech giants like Apple and Google have been working tirelessly on AR toolkits, hinting at a future where AR could be an integral part of our daily lives. Leveraging LBA with AR could redefine how brands engage with consumers, offering immersive, interactive, and hyper-personalized experiences. A study by the New York Times showcased that AR ads have a 20% higher click-through rate than traditional display ads. Thus, combining LBA with AR could revolutionize the advertising game, offering brands a unique way to captivate and engage their audience.
Restraint: Privacy Concerns and Stringent Data Regulations
However, LBA isn't without its hurdles. A primary restraint for the market is growing privacy concerns and stringent data regulations. With scandals like the Cambridge Analytica fiasco, consumers have become wary of how their data is being used. The General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the U.S. have set rigorous standards on data collection and usage. Brands delving into LBA need to ensure that they have explicit consent from users to access and use their location data. Any slip in this regard can not only lead to hefty fines but can significantly tarnish a brand's reputation.
Challenge: Ensuring Accuracy and Relevance in Ad Delivery
A persistent challenge in the LBA realm is ensuring the accuracy and relevance of ad delivery. While the idea is to offer timely and relevant ads, inaccurate geolocation data can lead to misplaced advertisements, causing more harm than good. For instance, promoting a meat-based product to someone near a vegetarian restaurant could be counterproductive. Brands need to refine their algorithms, perhaps integrating Artificial Intelligence (AI) and Machine Learning (ML) to ensure that the ads delivered resonate with the consumer's immediate needs and preferences. Ensuring this accuracy is paramount, as irrelevant ads could lead to consumers opting out of location services or viewing the brand in a negative light.
Market Segmentation by Application
By 2023, Retail Outlets, with the symbiotic relationship between the physical store and the consumer's mobile device, had generated the highest revenue. These establishments reaped the benefits of immediate conversions by targeting consumers in proximity, thus capitalizing on impulse buys and real-time promotions. However, Public Spaces, including parks, tourist spots, and recreation areas, showcased the Highest CAGR. The growth rate in these spaces can be attributed to advertisers tapping into the large footfalls, contextual relevance, and outdoor activities where mobile usage is high. Airports also emerged as significant LBA hotspots, focusing on travelers who have downtime and might be enticed by deals at airport stores, restaurants, or even nearby hotels. The 'Others' segment, which encompasses a varied mix of locations like theaters, transit points, and more, also saw considerable LBA activity.
Market Segmentation by Industry Verticals
Switching our focus to Industry Verticals, the Retail sector, as expected, led in revenue generation by 2023. Given that retail directly benefits from instantaneous purchasing decisions made by consumers on their mobile devices, it was no surprise. However, the Multimedia & Entertainment sector showed the Highest CAGR. With the integration of augmented reality, gaming, and live events, this sector is innovatively utilizing LBA to enhance user experiences and drive engagement. Other sectors like Hospitality, targeting guests with deals when they're near their facilities, and Healthcare, sending reminders or health advisories to people near clinics or pharmacies, also significantly adopted LBA. The BFSI sector leveraged it for promoting localized offers or branch services. Education utilized it for campus events or admissions, and Technology & Media companies integrated LBA into apps or platforms for more personalized user content. Transportation & Logistics, Automotive, and the 'Others' segment, comprising various other industries, also found unique ways to integrate LBA into their marketing strategies.
Market Segmentation by Region
On the geographical front, North America, with its tech-savvy population and high smartphone penetration, secured the position of the region with the highest revenue percent in 2023. Asia-Pacific, however, is expected to showcase the Highest CAGR from 2024 to 2032, given its massive population, rapidly increasing smartphone users, and urbanization trends. Europe followed closely, with GDPR regulations making the LBA implementations more transparent and trustworthy. Latin America and the Middle East & Africa, while currently at nascent stages, are also expected to see significant growth in the coming decade, with businesses recognizing the potential of LBA.
Competitive Landscape
When considering the competitive landscape, 2023 witnessed companies like Cidewalk Technologies Inc., Enradius, Emodo (Placecast), Facebook (Meta Platforms Inc.), Foursquare, Google LLC, GroundTruth, IBM Corporation, Near Intelligence Inc., PlaceIQ, Telenity, Yelp Inc., and Cuebiq Group LLC leading the LBA realm, given their vast user base and integrated advertising platforms. However, several startups and mid-sized companies also made their mark with innovative solutions and local market expertise. Key strategies employed included partnerships with local businesses, integration of AI and AR for enhanced targeting, and prioritizing user privacy to build trust. As we forecast from 2024 to 2032, the market is expected to witness even more players entering, more collaborations between businesses, and a more significant emphasis on ethical advertising, ensuring user data protection and relevance in ad content.
Historical & Forecast Period
This study report represents an analysis of each segment from 2022 to 2032 considering 2023 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2024 to 2032.
The current report comprises quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends & technological analysis, case studies, strategic conclusions and recommendations and other key market insights.
Research Methodology
The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. The key data points that enable the estimation of Location-Based Advertising market are as follows:
Research and development budgets of manufacturers and government spending
Revenues of key companies in the market segment
Number of end users & consumption volume, price, and value.
Geographical revenues generated by countries considered in the report
Micro and macro environment factors that are currently influencing the Location-Based Advertising market and their expected impact during the forecast period.
Market forecast was performed through proprietary software that analyzes various qualitative and quantitative factors. Growth rate and CAGR were estimated through intensive secondary and primary research. Data triangulation across various data points provides accuracy across various analyzed market segments in the report. Application of both top-down and bottom-up approach for validation of market estimation assures logical, methodical, and mathematical consistency of the quantitative data.
Market Segmentation
Component
Promotion Type
Advertisement Type
Application
Industry Vertical
Region Segment (2022-2032; US$ Million)
North America
U.S.
Canada
Rest of North America
UK and European Union
UK
Germany
Spain
Italy
France
Rest of Europe
Asia Pacific
China
Japan
India
Australia
South Korea
Rest of Asia Pacific
Latin America
Brazil
Mexico
Rest of Latin America
Middle East and Africa
GCC
Africa
Rest of Middle East and Africa
Key questions answered in this report
What are the key micro and macro environmental factors that are impacting the growth of Location-Based Advertising market?
What are the key investment pockets concerning product segments and geographies currently and during the forecast period?
Estimated forecast and market projections up to 2032.
Which segment accounts for the fastest CAGR during the forecast period?
Which market segment holds a larger market share and why?
Are low and middle-income economies investing in the Location-Based Advertising market?
Which is the largest regional market for Location-Based Advertising market?
What are the market trends and dynamics in emerging markets such as Asia Pacific, Latin America, and Middle East & Africa?
Which are the key trends driving Location-Based Advertising market growth?
Who are the key competitors and what are their key strategies to enhance their market presence in the Location-Based Advertising market worldwide?
FIG. 12Market Positioning of Key Location-Based Advertising Market Players, 2023
FIG. 13Global Location-Based Advertising Market - Tier Analysis - Percentage of Revenues by Tier Level, 2023 Versus 2032