Op-Ed: The Next Billion Mobile Users

The following is a guest contributed post from Andrew Dubatowka, VP, North America Performance and Marketing, AdColony

Six hundred years after the Chinese explorer Zheng He circumnavigated the world –  allegedly discovering America along the way –  the tables have turned, and it’s the Western world that has its eyes turned to China as the next frontier. But it’s not looking for a land grab. No, it’s looking at the 1.4 billion Chinese mobile users that are poised and ready for global brands and apps.

China is a mobile-first economy, with users in both urban and rural areas turning to apps and the mobile web for search, gaming, news, entertainment, and shopping – having completely leapfrogged the West when it comes to mobile commerce. As such, China is a veritable playground for mobile app publishers, rich with users who are both hungry for more apps and also accustomed to in-app purchases of all types.

The best part is, you don’t have to nab the majority. The sheer volume of China’s mobile base – they have more gamers, for instance, than any other country – means you only have to capture a small percentage to multiply the success you’ve already had elsewhere. As they say, if you break into 1% of the Chinese market, you’re made.

For advertisers, this means one thing: inventory – and lots of it. So much that it’s almost like an open field, just waiting to be sown. Mobile users in China are also more open to ads, possibly downright eager. Nearly 8 out of 10 (78%) Chinese consumers are more likely to click on a mobile ad if the content is relevant to them versus just 33% of UK and 29% of US users. Now is the time to get in, before more advertisers go through the floodgates and prices go up.

Because they will.

The mobile ad market in China is on a tear. By 2021, eMarketer predicts 82% of digital ad spending will be dedicated to mobile, and it will represent an incredible 60% of total media ad expenditures. Sure, three-quarters of that is going to go to the ad giants Alibaba, Baidu, and Tencent, just as Facebook and Google dominate elsewhere, but there is one big difference: In China, social media isn’t nearly as flexible and open to advertising as it is in the West. Instead, advertisers focus on online video, gaming, messaging apps, microblogging sites, and search engines.

While we all know that search will continue to grow, as will messaging, I believe that mobile video and gaming is where we see significant untapped opportunity. For brands, sight, sound, and motion can elicit emotion, deepen engagement, and put an indelible stamp on the psyche of a user. For performance advertisers, video is an effective way to fully convince a user that your app is worth downloading. It’s no wonder that in just a few years mobile video will comprise 72% of all video ad spending.

As mentioned above, China has hundreds of millions of heavy mobile game players, many of which would be considered “whales,” based on their higher engagement retention, and in-app purchase rates, all of which results in significant lifetime value for publishers. Why would you wait to get these big fish? They’ve never before been accessible by Western advertisers.

It’s very easy to say you should do something, and much harder to answer the question, “But how?” The truth is, entering the Chinese market is not simple; it requires three T’s, all of which have their own nuances of execution. But they are a great starting point:

TECHNOLOGY. Because China’s internet is separated from global internet, the first box to check is to make sure you are working with a partner who has a dedicated infrastructure in place. That way, you’ll have the speed and reliability required to serve ads to the users in China.

TEST. Don’t throw away your existing strategy; in fact, there are many best practices from your existing market and user base that will be invaluable as you break into this one. But be open to the fact that not everything that has worked for you so far – from your marketing approach to how you measure success – will work in China. Test them out, but try new things. Then A/B test them against each other. Then test and iterate again. Sound familiar? It’s really about getting back to what you did in the beginning that made you so successful.

TRUST.  Find local and/or international mobile ad partners that you can trust to guide you through this new market. This is also easier said than done, but the first thing to look at is their clients and their experience. Have they done this before? Then look at how they can customize service to your needs because you’re going to need a partner that can adapt to the changes you’re making across apps, campaigns, etc. – and even work with you to make them better.