Mobile marketers should think globally, act locally: keynote

By Dan Butcher

November 6, 2009

The “Global Perspectives in the Digital Age" keynote roundtable at ad:tech New York

NEW YORK – Brands and marketers must tap into rapidly growing international wireless markets or risk getting left behind, according to a keynote roundtable at ad:tech New York.

Jonathan Carson, CEO of the telecom division of Nielsen, New York, moderated the “Global Perspectives in the Digital Age” panel. Per the panelists, the mobile Internet is massively important in international markets, and given that everywhere outside of the U.S. mobile subscribers dwarf the online population, it is imperative for brands to realize that most international consumers access the Internet via their mobile device.

“Based on trends we’re seeing, Internet companies are more global, and our advertisers and the companies we cover are generating more and more revenue from international markets,” said Imran Khan, managing director of Internet media and entertainment analyst at JP Morgan Chase, New York. “Mobile is more of a transaction-related business, with small transactions, virtual currency and the growth of casual gaming through social networking.

“We will see a lot of evolution in mobile payments—we will see significant growth in the payments system,” he said. “Visa and MasterCard are investing in mobile payments, and there’s room for a lot of innovation in that area.”

With all marketing campaigns, as with any business venture, it is vital to know your target audience and consumer base. However, that becomes even more of a challenge when your target lives in a foreign land with distinct customs.

“The biggest challenge that a lot of U.S. companies face is knowing the culture and understanding how the local business works,” Dr. Khan said. “Understanding the Chinese market is very different from Western markets, so how do you do business?

“The biggest issue is understanding the local culture, language and how local business works,” he said.

In the U.S. advertisers are spending roughly $1,000 per person per year, but internationally it’s much lower, according to Dr. Khan.

“Asia is growing really fast, but none of the U.S. companies have figured out how to win the Chinese market,” Dr. Khan said. “To be successful, it’s important to spend a lot of time in China, but when you still have a big business in the U.S. and Western Europe, how can you focus on China?”

The Web is mobile
According to Nielsen, online population growth is being driven by developing markets. For example, in 2008, the number of Asia-Pacific consumers with an Internet connection grew 42 percent.

However, online advertising spend has not yet followed the eyeballs. Britain and Sweden lead the pack with more than 20 percent of ad spend dedicated to digital. Norway, Japan, South Korea, Canada, France, China, Australia and Germany round out the top 10 percentage-wise, followed by the U.S.

“The area that interests me most right now is China, which is the largest Internet market in terms of usage and that’s with only 25 percent of population online, so there’s still room for significant growth,” said Vivek Shah, group president of digital at Time Inc. News Group, New York. “The key thing in China is partnerships to achieve distribution and relevance.

“I’m optimistic, because China’s display advertising market is up 40 percent, compared to the U.S. market, which is down 5 percent,” he said.

While there are parallels between the PC Web and the mobile Web, it is important to take into consideration the different ways that consumers act with the Web via each channel.

“Many brands take what was already being produced online and take that to mobile, and you should do that, but you have to realize that it’s a different platform,” Mr. Shaw said. “Mobile is about snacking, high volume but quick usage, even more so than a Web site.

“From a content and functionality and product point of view, how do you take advantage of location and other things you can’t do on the PC Web,” he said. “Apps are an order of magnitude of difference from what the mobile Web can do.

“The mobile Web is still not a great ad experience, but apps improve on that, so start with what you have then pivot from there.”

Rules of the game
International markets often play by different rules.

For example, display advertising in India is almost 100 percent cost-per acquisition. Display advertising is sold in time slots in Korea and China. To combat piracy, some films are released free in China with ads.

Also, different social networks and online portals are popular in different countries.

“When I look at our Reuters.com network, there are 13-14 different local languages we publish in, content very targeted at financial professionals,” said Chris Ahearn, president of Reuters Media at Thomson Reuters, London. “You have to take into account mobile adoption and the PC-bypass aspect of that.

“What we see in Asia a whole raft of services we’d think of in U.S. as having to be PC-based, but there they are mobile-based, and everybody is on their phones all the time,” he said. “The snackability aspect of all different bits of mobile content drives it right through the roof.

“People there are not conditioned that everything needs to be free, so there are much heavier aspects of paid content.”

Some of the lessons learned in Western Europe and the U.S. can be applied to Asia and other international markets, whereas some aspects will be completely unique and marketers may need to start from scratch.

“Let’s have a multiplicity of markets and specific niche-oriented models,” Mr. Ahearn said. “There should be persistence of products and services, thinking about the differences of mobile versus PC.

“I shouldn’t be serving up content you’ve already seen, it should be a more personal and richer environment on the mobile phone, and we’re not there yet, but if we don’t evolve to that, we’re dead,” he said.

Global reach is key
Nokia knows a thing or two about international markets, as it has the greatest market share of any handset manufacturer outside of the U.S.

Nokia claims that its market share in the Middle East and Africa is 55 percent, while in Asia-Pacific it is 48 percent.

“The China discussion feels like yesterday’s news, because the fastest growth for us is coming from the Middle East and Africa,” said Tero Ojanpera, executive vice president of services at Nokia, Espoo, Finland. “In India, most people have mobile phones, not smartphones, but you can still distribute content—you can really push content.

“On the agenda for us is how we can put great content in the hands of people leveraging the phone’s interactivity and marketing via the mobile channel,” he said. “Context-based ads are valuable—mobile knows your context, where you are, where you’re going, who you’ve interacted with.

“Later, once you pull all that together, you’ll have a better understanding of what’s relevant to each consumer—Asia is ahead of the U.S. in that area.”

Mobile content and mobile payments are two major areas of growth going forward into 2010. Nokia has been investing heavily in NFC and RFID technology to enable contactless mobile payments.

“We see a great demand for mobile payments, especially transferring money and paying bills in markets where you don’t have an established payments or banking mechanism,” Dr. Ojanpera said. “Content consumption is moving to mobile and that’s where the traction is.

“Look at music—people were asking ‘Can you make money with music in India?’ which is one of our better markets,” he said. “You have to figure out how to deliver content over wireless networks that are not so good and where people are using mobile as primary device to download music and actually pay for it.”