Location enabled search advertising will account for just over half of consumer location based service (LBS) revenues by 2017, according to the Strategy Analytics Wireless Media Strategies (WMS) report, “Consumer & Advertiser Expenditure on LBS To Reach $6 Billion By 2017.” Popular maps and navigation applications are increasingly being offered for free on smartphones. Providers of those services are under growing pressure to find ways to generate revenue through a combination of advertising and additional premium content.

With Apple following the lead of Google and Nokia by embedding free maps and navigation its smartphone platform, iOS6, these popular location based services have become a core feature of over 80 percent of the smartphone installed base. “Although there will be over 640 million users of mobile maps globally these services are not directly growing revenue for providers of those services,” said Nitesh Patel, Senior Analyst in the Strategy Analytics Wireless Media Strategies service.

According to this report, the rising consumer and advertiser spend on LBS will be primarily driven by location-enhanced search, accounting for 50 percent of spend by 2017 as advertisers target ads based on user location and desires.

“The ability to advertise relevant offers, products and services to nearby consumers at the point when those consumers are searching for those products and services represents a compelling opportunity for local businesses,” said David MacQueen, Director of the Strategy Analytics Wireless Media Strategies service.

The report, “Consumer & Advertiser Expenditure On LBS To Reach $6B by 2017”, and the accompanying forecast “Global Location Based Services Forecast”, provide an assessment of consumer of location services, including search, maps, navigation, tracking and other location-based services.

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