LBS revenues in Europe, North America to hit $6.9 billion in 2018: Berg

Location-based services (LBS) in Europe and North America will generate revenues of around €5 billion ($6.9 billion) in 2018, up from about €2 billion in 2013, according to new research from Berg Insight, but mobile operators will focus on growth in the enterprise and B2B sectors, having been sidelined by over-the-top (OTT) players in the consumer market.

According to Berg, revenues in Europe will rise from €735 million in 2013 to about €2.3 billion in 2018, while those in North America will grow from $1.8 billion to around $3.8 billion over the same period.

Berg reckons most of the growth will come from increasing ad revenues in the social networking and local search segments of the market.

Research indicates that about 50% of all mobile subscribers in Europe were frequent users of LBS at the end of 2013, while 60% of North American customers are now accessing LBS at least monthly.

“Advertising is the main source of revenues for most consumer oriented LBS,” said Andre Malm, a senior analyst with Berg, noting that an increase in the number of active users and usage of LBS has also driven revenue growth.

“Revenues are however far from evenly distributed as major players including Facebook [Menlo Park, CA, USA] and Google [Mountain View, CA, USA] with broad audiences have attracted the majority of ad spend,” added Malm.

Moreover, with OTT players now dominating the consumer market, mobile operators have begun exploring opportunities in the enterprise and B2B sectors, where LBS can be used to support asset tracking, fraud management, secure authentication and location-based advertising.

“Some mobile operators have also started to collect passive location information of subscribers for use in mobile analytics services,” said Mr Malm.

Berg Insight reckons anonymous bulk location data can be used to improve the performance of mobile networks and support operators’ internal marketing campaigns.

It also says that location analytics data is being adopted for a range of diverse purposes, including site selection in the retail industry, as well as for urban planning and traffic monitoring by public authorities and private companies.

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