Why Globalization Means New Tech Solutions For Advertisers

Localism is losing out to globalism. Erick Fang, CEO of Mintegral, shares his opinions on Forbes about why globalization means new tech solutions for advertisers.

By Erick Fang, CEO of Mintegral2018-11-07

In the early years of the mobile app landscape, local brands and publishers built regional audiences and worked within the abilities of their local advertising ecosystems. Global successes were few and far between, limited largely to globally known social media and communications platforms, such as Facebook, WhatsApp and Twitter in the West and WeChat, QQ and Line in the East.

The mobile apps that prospered were built around established brand names or were a new breed of utility-based app that offered valuable functionality in return for a few adverts — a model pioneered by the likes of Cheetah Mobile.

Today, we see a very different landscape, where localism is losing out to globalism. A new kind of app publisher has emerged that has built scale and revenue through a multi-regional approach, taking a single product but localizing and monetizing it in different ways to suit the needs of different consumers in different markets.

When I talk about global reach, what I mean in this context is the addition of the APAC markets, and especially China, alongside the familiar markets of North and Latin America and Europe. APAC is a difficult market for Western brands and publishers to enter, due to barriers around language, culture and technology. Conversely, it can be easier for Eastern companies to expand into Western markets, as those same barriers are easier to overcome.

The rapid growth and gradual opening of the Chinese mobile market has changed mobile marketing in three significant ways. First, China has become both the biggest and most valuable market for many kinds of mobile apps and, by extension, a significant market for advertisers to target.

Second, the rise of China has also meant that homegrown companies have built hugely successful mobile internet businesses, creating a wealth of channels for European, American and other Asian advertisers to reach Chinese consumers. This is particularly important for us at Mintegral, as we have set out to build the most extensive network of Chinese supply-side partners and open them up to Western demand-side advertisers.

Third, the skills and investment by Chinese companies have made it a serious player when it comes to developments around AI. You may already be familiar with established companies such as Alibaba — China’s equivalent to Amazon. But there is huge innovation across the technology spectrum, with many Chinese companies bringing new ideas to the global marketplace.

In the past, just as in Western markets, consumers were happy to look inward to homegrown brands. But in today’s connected world, consumers are far more outward-looking, with the aspiration for products and services crossing cultures and geographies. Just look at how Apple now very publicly talks about China being an important growth market or how companies like Alibaba and Tencent are actively investing in European and American businesses.

This has meant that the mobile advertising industry has also followed this trend, globalizing its own strategies to meet the growing need for ad-based user acquisition and monetization. It has also meant that a new generation of mobile marketing companies is emerging, with Chinese companies among the pioneers of this model. Much of this is due to the very rapid growth and innovation of social media platforms in China, which act as access points to a wealth of other services, such as e-commerce, mobile banking, education, travel and more.

For example, Tencent earned over 23 billion yuan ($3.7 billion) from advertising and in-app purchases on its social networks and mobile games in 2017, more than double the previous year. Much of this is driven by its portfolio of free-to-play mobile games. These are numbers that Facebook or Google would be more than happy with, so it is no surprise to see companies like Tencent, NetEase and Line looking beyond their own shores for growth.

The challenge for the ad industry is that simply having the largest inventory or widest reach is no longer enough; effective app marketing and advertising increasingly relies on companies that are able to offer local, on-the-ground expertise — but scaled to the point where it is possible to run globally coordinated campaigns.

As with any market or technology shift, the increased spending power of Chinese and Asian mobile companies will create significant opportunities for agencies and advertising platforms. But we don’t yet know whether these emergent brands will choose to spend their budgets with incumbents like Facebook and Snapchat or use their spending power to foster a new approach and usher in a fresh wave of ad tech startups.


Link: https://www.forbes.com/sites/forbestechcouncil/2018/11/07/why-globalization-means-new-tech-solutions-for-advertisers/#50cfd9995bf9

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