Mobile is an opportunity we don't want to destroy with crude scattergun strategies
At the Mobile World Congress in Shanghai this year the GSMA published a report, The Mobile Economy: Asia Pacific 2016. To a great extent, it told us what we already know – mobile is big in this part of the world. Across the region six out of ten people now subscribe to a mobile service. And the rate of growth is mesmerising. India, for example, will add 250 million new subscribers over the next four years.
Alex Khan, MD of AOL Asia on mobile in the region
4G services are also on the rapid increase. There are more than 600 million subscribers across Asia Pacific, four times more than North America. Again, the rate of growth is staggering – increasing 2.5 times last year.
For many countries in the region mobile is leapfrogging fixed line internet. For network providers, high speed mobile broadband can reach newcomers in a more cost effective and timely manner than laying cable. That’s why just 24 per cent of all internet traffic is over a fixed connection. Compare that to the US, where it’s 42 per cent (again, Cisco’s figures).
If you think mobile use is big now, just wait. Cisco reckons mobile data use will grow four-fold in Japan by 2020; five-fold in Korea and 12-fold in China and India. Across the region it averages out at a growth rate of 54 per cent, each year through to 2020.
We’re also seeing the size of the advertising pie increase. McKinsey, in their Global Media Report for last year, forecasts a 6.5 per cent increase in advertising spend in the region each year to 2019 – well above North America (4.5 per cent) and Western Europe (3.9 per cent).
This must be great news for advertisers – a growing market and increased usage of mobile devices makes for more mobile advertising, right? And we all know the benefits of mobile – you reach individuals on a highly personalised device, equipped with behavioural data and geographic information that can target ads more precisely than through any other channel.
No surprise then, that mobile advertising is on the rise. Econsultancy forecast that over the next couple of years the spend will increase by at least 50 per cent in Japan and Korea, almost double in China (claiming a quarter of the global market) and show a five-fold increase in Indonesia.
There’s a big risk, though. With so much resting on the success of mobile, advertisers need to get it right. Intrusive ads that detract from the user experience will do more harm than good. The crude scattergun approach that plagued early online advertising attempts simply won’t work in the mobile space.
Misplaced and invasive ads will simply hasten the move to adblocking technologies. Research from PageFair earlier this year indicated that already more than a third of mobile users in Asia Pacific have installed ad blockers, even more in emerging markets like China, Pakistan, India and Indonesia.
The limited display real estate afforded by mobile devices is a boon to advertisers. It means ads appear in a less cluttered environment and assume a degree of prominence not afforded on bigger screens. But it’s that same high visibility that is disaffecting users, particularly when ads are misplaced and irrelevant.
All this means the industry needs to work harder to ensure we respect consumer choice. That means using data and behavioural analysis to ensure ads are pertinent and enhance a brand’s reputation, not destroy it.
For many advertisers there’s a lot to learn. You need to have a clear understanding of where each user is in the customer journey. Retargeting, for example, could be particularly detrimental if the device owner has already made a purchase.
The need for timely user data is why mobile specific marketplaces are an essential part of the mobile landscape. The ability to track behaviour and plug in third-party analytics means advertisers can be more sparing in their use of mobile inventory. Key to this will be tracking users across multiple screens, so frequency can be tightly monitored. For example, it might just take one ad served on a mobile device to turn away a consumer who has been relentlessly targeted through other channels.
A more sophisticated approach to mobile advertising is essential if we are not to destroy the opportunity. It should mean a higher yield for mobile publishers with a restrained level of inventory that is acceptable to the audience. The rate of ad blocking on mobiles in the region shows us that firing more and more ads is not the answer.
Whilst the risk of turning off mobile audiences is a significant issue globally, Asia Pacific has the most to lose. As I have already highlighted, in many parts of the region mobile has leapfrogged fixed broadband. A sizeable proportion of the audience can only be reached on mobile devices. In other words, if we ruin the digital opportunity provided by phones and tablets there is no substitute – apart from traditional offline media.
We need to ensure our collective approach is consumer driven, not a splurge of extraneous content sold at the lowest possible cost. And our timescale for getting this right is very tight. For many parts of Asia, it is mobile or nothing.
Alex Khan is managing director of AOL Asia and can be found tweeting @khanage5