Asia digital advertising market is growing

Digital advertising in Asia is growing, and fast!

The potential of programmatic advertising in Asia is huge. APAC offers a unique market space that is only just starting to take off.

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Why should we care about the digital advertising market in Asia?

According to the latest Strategy Analytics report, this year the Asia-Pacific region (APAC) is likely to overtake North America as the biggest digital advertising market worldwide. Predictions range between an 18%-20% increase in digital ad spending, which would bring its total spend for 2016 up into the region of $70-$80 billion.

This is a staggering figure and one we shouldn’t overlook. Perhaps unsurprisingly, China is firmly in the front seat of this drive in digital ad spending. This year, 44% of total digital ad spend worldwide will come from the U.S and China alone. But China isn’t an oddity, with the likes of Japan, Thailand, India and Indonesia, the region boasts half of the world’s top six countries in digital ad spending.

Digital ad spend by region - Asia, America, Europe, Africa

What is unique and desirable about the Asia-Pacific digital market?

Mobile-first

The majority of people in APAC interact and engage with the digital world through their smartphones. In China, uniquely, users often even favour apps over the mobile web. Understandably, many APAC countries have become critical markets for mobile app and gaming companies. Leading in-app advertising company, Vungle, saw ad revenues soar up 400% in China from 2015.

Efficient broadband

Mature markets such as Singapore have well-developed broadband networks, providing a large internet-connected audience. WeAreSocial reported that an impressive 82% of the city-state was connected to the web. The availability and size of the audience in many countries in APAC are attractive, and there’s plenty of room to grow. Currently, spending per person in APAC is around $15, compared with $165 in the US and $95 in Western Europe.

Untapped technology

Pokémon Go has highlighted the potential of location-aware apps and geo-targeting. This week, breaking away from its traditional mould, Japan has become the first country to include in-app brand sponsored locations with McDonald’s Japan.

What are some of the challenges of the Asia-Pacific market?

Unique market

Just because it works in the West, doesn’t mean it will work in APAC. Whilst foreign companies can bring a lot of value to the region and act as a bridge between China and the rest of the world, it’s essential to tailor tactics to the region. Vungle’s success in China is largely due to their commitment to understanding the local market. By hiring Chinese-speaking employees and sending them into the field, they’ve localized everything from sales, engineering to account management.

Latency

The Chinese firewall not only screens and blocks websites, but also slows down almost every international ad call. Moving forward, companies would benefit from investing in localizing their servers.

Anti-Fraud and ad-blocking

Anti-piracy efforts and viewability standards abroad are yet to catch up with the U.S. and Western Europe. In addition, many APAC consumers in countries such as China are mobile-savvy and aware of the latest ad blocking technology. According to a study by PageFair, 36% of smartphone users in APAC countries have ad blockers installed.


To recap, the potential of programmatic video in Asia-Pacific is huge. Foreign companies should not be discouraged by the regional challenges; APAC offers a unique market that’s only just taking off.


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Posted by simonholliday