There’s no denying it; mobile advertising is becoming one with smartphone applications. eMarketer reported late-August that by 2017, mobile will account for nearly four out of 10 global digital advertising dollars. Furthermore, Asia Pacific is now catching up with Western Europe when it comes to mobile ad spend.
In 2011, Asia Pacific was said to be churning US$22.4 billion digitally in ad spend, coming up third in the worldwide market. Fast forward to 2013, North America is still maintaining its first place spot, while Asia Pacific has climbed up to second place with US$33.76 billion spent in digital advertising.
With a significant increase in digital ad spend numbers, it is important to note one huge aspect of digital usage – mobile. In Southeast Asia, smartphone and tablet penetration has been said to hit 63 percent in 2013, a 24 percent increase from the previous year. Hong Kong sees 96 percent of Internet users use smartphones to go online everyday. Needless to say, in South Korea, one out of every five students is addicted to smartphone use. With mobile usage flourishing in this part of the world, how is advertising shifting to suit Asia Pacific?
At B Dash Camp 2013 in Osaka, one of the sessions revolved around the latest trends in smartphone advertising. Moderated by Tak Miyata, the general partner at Scrum Ventures, Sid Bhatt (CEO of Aarki Inc), Ganesan Velayathan (CEO of Fun & Cool Ventures Inc) and Brian Wong (co-founder and CEO of Kiip who joined them on a video call) discussed how their startups have been trying to improve advertising on mobile.
Brian, whose company deals with rewarding users for certain tasks, was quick to say that Kiip is not an advertising company. He had started at age 19, and now at 22, the three-year-old company has received funding from American Express and Relay Ventures. The core of the business is in “augmenting happiness” and “acknowledging and rewarding users for their work”.
He added that in the past, smartphone users consider advertisements to be annoying and would automatically ignore those intrusive pop-ups, thanks to the perception that these messages have to be tolerated. In Kiip’s case, advertisements are posed as relevant rewards. It wasn’t something people should be aiming for, either; Brian said that there is a certain serendipitous aspect to the reward system where users are surprised constantly.
Integrated with 1,500 apps, in six verticals like music, food, fitness and productivity, the rewards are supposed to benefit the users when applied. For example, if the user is playing a game in a city which is experiencing a dry spell, the reward could be a icy drink at a convenience store. Similarly, if the user completes a personal to-do after 6 p.m., they might be rewarded with a free movie ticket from Warner Bros.
As for Aarki, run by Sid Bhatt, the mobile ad platform develops, tracks and distributes rich media messages to users of other smartphone applications. With five offices around the world, the US-based company has a presence in China and the Philippines, and are now considering Japan. Gone are the days when companies would stick to using gaudy looking static images.
Sid said that there are three tiers when it comes to mobile advertising. Firstly, there is a recognition aspect or reinforcement feature. For example, in the summer, Coca-Cola might have an advertisement about how happy people are drinking their beverages on a beach. That works to remind audiences of certain brand messages. Secondly, it could be to support purchases. He added that movie studios love to have advertisements on mobile talking about upcoming titles which then lead to a movie purchase site. Ultimately, the third tier is to drive performance. He said, “It could be an app download, a Facebook like or share, or a lead submission. It all boils down to a clear agenda from agencies.”
Ganesan Velayathan’s company Fun & Cool Ventures specialize in building advertising networks for companies in Asia. He said that they usually spend about six to seven months testing in Southeast Asia. The clickthrough rate comes up to about 40 percent. Developers can choose what sort of advertisements they want to show on the mobile applications.
He added that one way to promote applications is to target verticals. For example, if game publishers are producing a card battle game, it is wise to advertise the product in another battle game.