The online ad market, while stabilizing after a rough year, has been relatively brutal for the display ad market in particular. While search has continued to eke out growth during the downturn, spend on branding-heavy banner has taken a heavy toll with recovery still elusive.

There might be a type of display ads that buck the trend, though. Geotargeted ads, which combine the eye-catching appeal of a banner with messaging that resonates with a visitor’s locale, was an $897 million market in 2008 but expected to grow at a 16% CAGR through 2013, when it will capture 15% of the display market, comprising $1.9 billion, in the U.S. alone.

BIA/Kelsey’s report highlights increasing spend by SMEs, likely the greatest potential beneficiaries of ad geotargeting, of contributing the fastest growth to the geotargeted display market, with 66% growth through 2013. This is unsurprising. Having learned the ropes of geotargeting ads to reach customers from AdWords, local small businesses are likely to take advantage of services like AdReady, Personiva (now AdaptiveAds) and SnapAds to build display advertising to scale to service customers in desired locations. Text ads through AdWords lacks the visual impact of display and geotargeted display can round out the reach picture for advertisers seeking to saturate local markets.

Growth charts available at Marketing Charts.

This entry was posted on Thursday, December 3rd, 2009 at 6:18 pm and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.