Mobile apps advertising industry has a size of around $6-10 billion .This is 7% of the total internet marketing industry size of est. $45 billion.But where are the geo-adds?In theory geo-advertising is fantastic opportunity for revenue generation.In practice , all developers and industry gurus know that a very little of location adds make the silver.
Lets say you have an app with one million daily active usage, you’d be surprised by how much of the DAUs reside in a very long tail of locations. Perhaps the first few hundred thousand reside in places like New York, Los Angeles, Chicago, etc.(major population centers/designated market areas), but then after that the number of locations skyrocket and the DAUs per location shrink rapidly. Also, the typical app only generates so many impressions per user per day through usage.
So, that means the publisher has a a limited number of chances to match that user with an ad that is relevant to them even if the geo is spot on. This opportunity only gets smaller the lower the DAU/MAU ratio of the app. This means for apps like utilities, that users only use once in a while (low DAU/MAU ratio), it may not be the least bit practical to use local ads as a source of demand for inventory.
Local ads, like most other types of performance based ads, often need minimum volume levels before they start to perform and normalize around the averages. For many apps, the local campaigns just won’t be able to get enough volume to perform as well as garden variety CPC ads for things like games. This puts the publisher in the position of having to waste lots of impressions before ever seeing revenue from local ads.
The dream of geo-adverts is still to be realized.
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