According to Groupe Speciale Mobile Association (GSMA), the APAC region had 1.8 billion unique subscribers and close to 3.8 billion unique mobile connections in the first quarter of 2015. GSMA predicts that the APAC region will add around 1.6 billion smartphone connections by 2020, which will be half of the total number of new connections added globally. Syniverse (a global technology and business services provider to the telecom industry) has identified a $6 billion opportunity for brands in the mobile sponsored data domain in Asia. Mobile sponsored data is nothing but relevant content sponsored / created / curated by brands that are pushed to consumer’s smartphones in exchange for free data / call minutes / freebies / coupons etc.
Zeroing down on a few Asian countries allows identification of significant opportunities for brands. In a survey conducted by InMobi towards the end of 2015 in Vietnam, 94% of respondents mentioned that they were planning to spend money through their phones in the next three months. The same survey revealed that an average Vietnamese smartphone user was spending close to 2.4 hours on their smartphones. In a separate piece of research, a high level of affinity towards mobile video advertising was found among smartphone users in Vietnam.
Facebook, as part of its global strategy to tap into the significant growth opportunities in Asia, categorises South-East Asia as a “mobile first” region. All Facebook initiatives in this region have a focus on mobile as the primary platform. Mobile video advertising through FB and the reactivation of Atlas (ad servicing and measurement platform) are the key offerings to brands interested in Asia.
In addition to mobile advertising through sponsored content, social media and apps, the biggest opportunity for brands in Asia lies in m-commerce. Singapore based online fashion retailer Zalora has reported more than 45% of its sales coming completely from its mobile site and mobile app. Visa’s 2015 Regional eCommerce Monitor Survey for Asia Pacific identified a 22% increase in shopping via mobile devices compared to 2014. China, Indonesia and Taiwan were the key countries contributing to this uplift in m-commerce.
Enough of numbers and survey findings. The key question is what does this mean for brands in Asia in particular, and more specifically, what does this mean for Asian brands?
There is no doubt that there is a significant opportunity for brands in the mobile space. I am going to focus more on organic brand building via mobile rather than m-commerce (which can be an in-depth assessment in itself). General media and expert consensus that brands are yet to tap into this opportunity in mobile. Before we become too critical about brands, it is important to understand the challenges that come with this opportunity:
In larger parts of Asia, mobile is still perceived to be an access platform for sharing: The whole argument of mobile being an access platform, which is what brands want, is a bit circuitous. It is about telling someone that this is the “gate to heaven”, which you were looking for, but you may not use it. To be successful in mobile in Asia, it is important to understand what the consumer expects to do when he or she interacts with native advertising / sponsored content etc., rather than what the brand owner wants the consumer to do.
This relates to understanding historical mobile habits, their transition and evolution in a smartphone-driven world and whether there are new attitudes or habits that have formed. Success in mobile advertising depends on understanding these factors. For example, Vietnam seems to be emerging as a key opportunity area for mobile advertising and m-commerce, but Vietnamese consumers still prefer functional advertising (so not much opportunity for storytelling) and SMS marketing still dominates (wait a few years before you can roll out an engaging video selling the latest sports car).
The challenge with habits in the mobile space, which are almost all the time driven by popularity, also has the ability to impact mobile business models. This interesting piece from Techcrunch highlights the emergence of “shadow marketplaces” in Southeast Asia:
The main thing that interested me is the impact of these “shadow marketplaces” on the brand owner who has invested in mobile advertising in Thailand — Browse brand’s mobile shop on Instagram → Inquire about brand’s products on Line (Thailand’s most popular chat app) → get feedback / recommendations from your social circle → Get payment details from brand owner on Line → Purchase product → Track shipping details. This example highlights the challenge for a brand owner to manage the whole brand engagement to purchase process in a mobile ecosystem.
A very insightful piece of research conducted by Opera Mediaworks in mid-2015 revealed that in Asia, more than 90% of mobile impressions are driven by websites. In the United States, in comparison, more than 91% of mobile impressions are driven by apps. So for a brand owner interested in mobile advertising in Asia, apps do not stand out as an appealing channel. It is all about mobile-optimised webpages and selling social platforms.
In a 2014 survey conducted by Euromonitor in Indonesia, the following were the most frequent activities on mobile among smartphone owners in Indonesia:
Incidence of shopping related activity is high, but shopping related activity also includes reading or writing product reviews.
According to a recent survey conducted by Deloitte India, the Indian smartphone consumer is addicted to his or her device, but still has massive apprehensions about mobile payment systems and privacy. So, what are the implications? In India, brands still cannot create a complete end-to-end experiences on mobile (engagement to purchase).
Although there has been significant investments, speed is still a significant barrier in realising the full potential of mobile advertising:In Akamai’s comprehensive State of the Internet report for 2015 (First Quarter), Asia Pacific still lags behind the rest of the developed world in terms of average mobile connection speeds (see below from Akamai’s report with the country with the highest speed in each region).
- Africa: Morocco, 4.8 Mbps
- Asia Pacific: South Korea, 8.8 Mbps
- Europe: United Kingdom, 20.4 Mbps
- North America: Puerto Rico, 9.6 Mbps
- South America: Venezuela, 7.0 Mbps
Of the 62 countries covered by Akamai, Vietnam has the lowest mobile broadband speed of 1.3 Mbps, which in my example above, is one of the Asian economies with significant opportunities for mobile advertising.
In a very recent article in Forbes, the woes of internet speeds in the Philippines (both device and mobile) is clearly outlined. Adoption of 4G networks is 1% compared to the Asian average of 12% (which is also low). Spectrum is available but delays are caused by red-tapism, competitor lobbying and general endemic inefficiencies. More details in the article here:
Asia is progressing on this front, but the progress is not consistent across the region. Huawei and Singapore telecom operator M1 have recently demonstrated the highest upload and download speeds in a 4G network. In contrast to this are findings from India, where users are unable to find anything different between 2G and 3G networks, unreliability of 3G services and poor connectivity on 3G in indoor areas. So we are talking about mobile basics not being met consistently across the region in terms of speed and connectivity. In a 2011 article, McKinsey identified infrastructure as the key bottleneck for India in realising its digital potential. It still continues to be a key barrier.
Consider the critical aspect of penetration also. GSMA is bullish about the number of smartphone connections getting added by 2020, but current mobile penetration levels in Asia are still not very high.
With mobile video emerging as the most popular form of entertainment for Asian smartphone users, mobile data speeds will be a crucial factor in the success of mobile video advertising.
Tailoring and customising content: Asia is a complex and culturally rich region. The richness of Asia’s culture is driven by the multitude of dialects and languages spoken in Asia. For mobile advertising to be successful for brands, creating content in local languages is key.
In this 2010 article in Harvard Business Review, Marketing 101 does not work in Asia:
Two key points made in this article about how to be successful in Asia are”avoiding the marketing template mentality” and “getting into the trenches to become more local than the locals”. Language is the key to achieving both these objectives. Let’s look at why this is important from a mobile advertising perspective:
In end-2014, Google announced that its AdSense network in India will support Hindi language content. Vuclip, a premium VoD service focused towards emerging markets, has reported that 78% of Vuclip viewers in India express preference towards watching content in their native (local) languages. App developer Reverie Language Technologies has given the power of local language engagement to millions of users through Swalekh (a multi-lingual mobile keyboard that supports 11 Indian local languages).
This article from Business of Fashion highlights the significance of WeChat in China’s mobile publishing domain:
This article highlights how Samsung Indonesia and Telekomsel remain on the top in Indonesia as video content providers through a disciplined and effective process of creating and distributing localised video content:
Out of the three factors that I have highlighted as those that impact mobile advertising strategies in Asia, two can be understood, influenced and acted upon by brand owners. The challenge around mobile internet connectivity speeds has long being a source of frustration for brand owners in the region. Legislative and regulatory changes have sped up the implementation of the latest mobile communication technologies, but lack of uniformity and consistency of performance remain the two biggest barriers.
In addition to understanding habits in smartphone usage, the “localisation” strategy for mobile advertising needs to be in sync with a broader integration of mobile as a platform in the media planning process. The mindset of allocating x% to mobile spends needs to change to an active understanding of mobile as a medium and its potential to communicate the key messages of a campaign to the right audience. Brands shouldn’t be shying away from investing in “mobile only” campaigns if the ROI is maximised in that manner. The other aspect of integration is about consistency in communication across all touch points of a campaign, which includes mobile. Brand owners in the region who are evaluating the potential of mobile need to understand that mobile is not about “playing a video ad on a website and viewing it on a mobile screen”. It is about creating genuine, immersive, thought provoking and compelling mobile experiences.
I will leave you a video of Hindustan Unilever’s “Kan Khajura Tesan” (awarded the Lions Gold in Cannes), which highlights how HUL used innovate mobile marketing to market its brands in one of the most media dark states in India. The beauty of the innovation behind the campaign is its ability to bypass two crucial impeding factors for mobile advertising in India: low mobile bandwidth and the absence of feature enabled phones among India’s teeming millions.