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Juniper Research Reveals App Advertising Set for Explosive Growth

March 17, 2016

Even though online commerce is huge, it is miniscule compared to what takes place offline. According to the U.S. Department of Commerce, close to 90 percent of retail commerce is happening in brick and mortar stores, or offline. Bringing the two worlds together has proven to be difficult, but more and more consumers are starting to combine both worlds, which is primarily being driven by mobile technology. According to a new Juniper Research, app advertising optimized by location and context is expected to reach $44 billion by 2020, a threefold increase in the next five years.

The mobile advertising landscape is maturing, and it is bringing the digital and physical world together by using contextual data driven by the interests of users as well as their real-time location and other metrics.

This type of access is being made possible with technologies that now come standard on smartphones. The research by Juniper, titled, "Context & Location Based Services: Advertising, Retail & Emerging Technologies 2016-2020," found in addition to mobile technology, social apps are making the audience for this type of advertising easy to reach because of the large amount of highly accessible user information available to advertisers.

The research by Juniper showed Facebook, Twitter, Instagram, WeChat and Sina Weibo are the leading apps in terms of revenue using mobile location data to target users. However, not everyone is on board, the research firm said. Pinterest and others are developing tools to lower the prying eyes of advertisers. With privacy also a key point of consumer concern, it is important to properly manage how ads are target to users while they are out and about.

If it is not managed with the right balance, there are many ad-blocking utilities consumers can install on their mobile device to shut down everybody.

A couple of the drivers in the segment highlighted by Juniper includes the  boost by the ISO approval of the AEM/AEMP Telematics API Standard for commercial and asset tracking, and the emergence of prescriptive analytics in big data.

Research author Steffen Sorrell said, "This trend has been highlighted by apps such as WeChat in China, while Facebook Messenger has recently partnered with Uber to deliver ride-hiring services. This means that social apps are transforming into platforms themselves, offering even more data for ad campaigners."

According to the research, the collaboration and/or integration with other service providers or solutions is moving these apps beyond their initial design. This and other factors led Juniper to conclude a ‘perfect storm’ for the commercialization of indoor location services is in the making.

Edited by Rory J. Thompson

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