Editor’s Note: Si Shen is the co-founder & CEO of PapayaMobile, the Beijing-based mobile company that operates AppFlood, the largest global mobile RTB ad network out of China. Before Papaya, Si worked on Google’s mobile team in the U.S. and China.
In 2014, China-based Alibaba had a record-breaking IPO on the U.S. stock market, China surpassed the U.S. in terms of purchasing power, and the country earned itself a new position in the world economy.
But China’s not the only emerging region we need to pay attention to. Other countries are quickly following China’s lead and solidifying their positions in the technology marketplace.
Looking at data from AppFlood, a global programmatic mobile ads platform from my company Papaya, we’ve seen significant rises in ad spend in Latin America, Asia and Eastern Europe. When we drill down further, we see massive potential in Brazil, Mexico, Indonesia and India when it comes to becoming the next powerhouse in the world economy.
Observations of the regions
For the last two quarters, we have seen an increase in the proportion of mobile ad spending by Eastern Europe, Asia and Latin America compared to worldwide spending.
Asia has increased its share of ad spend from 26% to 37%. Latin America’s proportion of ad spend has also increased from 14% to 22%.
Amongst these geographies, North America saw a huge decline in their ad spend. Its share plummeted from one-third of the world’s total spending to an alarming rate of 10%. Before jumping the gun and deciding that Latin America and Asia are the answer, it’d be good to take a closer look at the performance of individual countries.
Rising economies to look out for
The U.S., Brazil, Indonesia and India make up half the world’s ad spending. The U.S. is expected, and Brazil isn’t surprising following the World Cup and the turbocharge it gave the economy, but Indonesia and India are surprising. These two countries had a gradual increase in their spending over the year, with India cutting a larger piece of the pie with growth from 8% to 14% and Indonesia increasing its ad spend proportion from 5% to 9%. China also still maintains a steady increase in the proportion of ad spending in the world.
So what’s next?
From the data above, both the under-the-radar and ‘popular’ countries appear to be gaining gradual control over the 195 countries comprising the mobile ad market.
Ad spending in the U.S. may have varied in these two quarters, but it is still a country that dominates in mobile and tech developments. Additionally, being the birthplace of ad networks such as Google Adwords and Facebook’s Audience Network, the U.S. will continue to be a place brimming with advancements in the infrastructure and usage of mobile advertising.
On the other side of the Pacific Ocean, China remains a strong country to invest in, especially in its mobile and tech industry. The country leads in the e-commerce industry worldwide, and its sheer size provides the world’s largest smartphone consumer market. As the digital market evolves, China’s online consumption habits will continue to change accordingly, making China a place with boundless potential for mobile advertisers and investors.
The under-rated regions
Although Brazil is growing quickly, it doesn’t grab the spotlight like the U.S. or China. However, EMarketer expects Brazil and Mexico to contribute extensively to Latin America’s ever-growing smartphone base, where they will contribute 10.9 and 6.1 million smartphone users this year respectively. Mexico and Brazil are countries to watch this coming year.
Brazilians also access the Internet more often on their mobile phone than on the desktop.This suggests a possible influx of resources by investors to monetize this trend. Eventually, it is expected that the ad revenue in this region will continue to grow as smartphone penetration and mobile usage increase.
Looking at the Asian countries, India and Indonesia represent underdogs in the advertising market. Yet, they have grabbed a significant portion of the world’s ad expenditure.
Indian smartphone users spent the greatest amount of time on their devices. India is third in the world in terms of smartphone subscription (117 million users). Coupled with locals’ willingness to pay more for a better mobile experience, this emerging market has potential to experience high growth rates in the mobile and tech industry.
Indonesia, the only Southeast Asian country highlighted, is another country with huge potential. Though only 24% of the population uses a smartphone, it is the most populous country in the region. With the changing habits of locals and adoption of smartphones, Indonesia is poised to become a region with booming tech improvements and mobile ad revenues in the near future.
A quick glance, shows that the U.S. and China currently control the global mobile ad market. However, upon closer inspection, we see that countries such as Brazil, Mexico, Indonesia and India are slowly creeping in and capturing an extensive amount of the market share.
Although we think of them as off-the-radar emerging regions, these countries could become powerhouse economies sooner than you think.