by Laurie Sullivan @lauriesullivan, February 10, 2017

BIA/Kelsey expects advertisers to spend nearly 16 billion this year on mobile search advertising, up from 12 billion in 2016. By 2021 that forecast could reach as much as $23 billion in 2021, contributing 32% of revenue to mobile search.

Overall, U.S. mobile advertising revenue is estimated to reach $72 billion by 2020, up from $33 billion in 2016, according to the report Getting To $72 Billion: BIA/Kelsey’s Mobile Ad Revenue Forecast.

Much of the strength that search sees today comes from high-intent usage. Smartphones represent 79% of mobile phones in the U.S., and Google estimates more than half of its search queries now take place on mobile devices.

Expect that percentage of search queries to grow exponentially in the coming years. In fact, by 2021, Cisco estimates the world will account for 11.6 mobile devices and connections, up from 8 billion in 2016.

While mobile search continues to hold a strong position, BIA/Kelsey predicts that some factors could threaten its lead.

“Mobile search usage carries a high degree of ‘lean forward’ commercial intent,” according to the BIA/Kelsey report. “This has made it an attractive venue to incorporate advertising, which in turn shows strong performance metrics like clicks, calls and transactions.”

BIA/Kelsey analysis estimates that search click-through rates (CTR) delivers about 3% on average, compared with mobile display ad CTRs that average 0.4%, and these performance metrics keep improving as Google offers advertising tools like product listing ads to capture user intent.

Another catalyst for growth is click-to-call spending from buttons in mobile platforms. BIA/Kelsey forecasts that global click-to-call spending will reach 13.7 billion by 2020, up from $5.9 billion in 2016. But the real impact comes from the amount phone call influence — about $1 trillion in U.S. spending along the many paths to purchase.

Even with all this good news, BIA/Kelsey suggests that “weaker than anticipated guidance and slower transaction revenue” will put pressure on the share mobile search owns today.

MediaPost.com: Search Marketing Daily

(57)