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Location Based Services Market to be Driven by Context Aware Mobile Services

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The Mobile Context and Location Services market is forecast to reach $43.3bn in revenue by 2019, rising from an estimated $12.2bn in 2014. Juniper Research highlighted that over two thirds of revenues will be driven through highly targeted and contextually aware ad supported apps by the end of the forecast period.

Social Leads the Way

According to the report, Mobile Context & Location Services: Navigation, Tracking, Social & Local Search 2014-2019, Social apps are forecast to be the primary driver behind app ad-supported revenues. Apps such as Facebook enable marketers to focus on specific audience segments using location and other user-generated contexts.

Local Search apps will follow in terms of ad-spend, and although these will not generate the equivalent of mobile web search, Google's opening of its deep linking API (application programming interface) to developers will undoubtedly close that gap.

Users Prefer In-App Purchases

Additionally, the report found that the IAP (in-app purchase) model will grow on average over three times as rapidly per annum as the classic pay-to-download model. IAP will be particularly prevalent in Navigation, Social and Tracking apps, with consumers preferring the low- to zero-entry cost and developers leveraging LTV (Lifetime Value) rather than one-off sales.

"Even in the case of navigation apps where paid-for apps have remained popular, large brands such as Garmin are beginning to emphasise this revenue model", added report author Steffen Sorrell.

Other key findings include:

Mobile ad presentation and delivery must still mature before the success of other media forms can be replicated, with a failure to connect at the correct emotional level with the consumer cited as a limiting factor.

The manner by which mobile apps are accessed is set to be transformed due to the rise of persistent search, deep linking and the birth of mobile ambient intelligence.

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Tags: location based services  lbs