Mark Wächter is known as “Mr. Mobile.” He just got back from a trip to Asia, where he observed how people are using their cell phones. At the vegetable market, they pay for their bananas with Alipay and then drive home in a taxi that they, of course, also order with their smart phone. The great importance of mobile phones in countries like China and India is attributed by Wächter, who is also co-chairman of the Mobile Marketing Association, to the good cellular coverage there. He has summarized the most important global and general trends in mobile marketing for DMEXCO.
1. Amazon is the third force in the mobile advertising market
Amazon is establishing itself as the third force to reckon with in the global mobile advertising market. While Facebook and Google previously held a duopoly accounting for around 80 percent of mobile advertising spending, Amazon is increasingly gaining ground with its app and mobile web offering. The online marketplace company based in Seattle has a lot of valuable first-party data at its disposal concerning the sale of its goods and the payment processes, thus making it an attractive mobile marketer and serious global player.
2. Ambient computing environment
Voice assistants like Alexa and Google Now are adding another aspect to smart phones. These include mixed reality environments, such as those created by Pokemon Go, or smart applications connected to the internet at home or on the road in the car. What they all have in common is that they are not (yet) self-sufficient, but require a smart phone as a hub for further services. These applications are part of the so-called ambient computing environment and offer many new possibilities for mobile advertising. The skills for voice assistants like Alexa are examples of this.
3. Messaging apps are the new social networks in China
In China, WeChat (Wēixìn or “tiny message” in Chinese) has completely penetrated the market. Almost everyone has the app on their mobile phone and uses it to communicate, watch videos, order taxis and food, pay their electricity bills or conducts banking transactions. WeChat accounts for one-third of mobile internet traffic in China. On average, people there use WeChat for more than one hour per day and some use it for up to four hours per day. The messaging app has thus developed into a mega-platform or super app and functions like a new operating system on a mobile phone with access to many mini apps without having to leave the platform. It is therefore no wonder that around 80 percent of digital advertising spending in China goes into this mobile channel.
It is interesting to note that Facebook has taken a different approach than WeChat. With its Messenger, Instagram and WhatsApp, the social network has many of its own apps in its empire, which are the first port of call for users on their mobile screens. In other words, while WeChat pursues a bundling strategy, Facebook and Google decided years ago to adopt an unbundling approach.
4. Mobile lifestreaming
TikTok (called DouYin in China) and formerly Musical.ly before it was merged into TikTok in 2018 are among the new social engagement platforms for Generation Z. These platforms allow users to share short self-made videos of themselves dancing and lip-syncing to music. A lot of interaction takes place on the portals, which results in exciting possibilities for integrating mobile advertising.
5. Interest from the very first second
While in Germany, the belief in 30-second slots is still relatively widespread, the UK, Scandinavia and USA are following Asia’s lead in planning almost all campaigns with the mobile first approach, thus starting from the smart phone screen. In these countries, up to 30 percent of total advertising budgets flow into the mobile channel. This can mean, for example, that the campaign starts in apps like Snapchat or Instagram, and then expands to other channels. It is important that the message is of interest to the user from the very first second and that it is transmitted within six seconds. The same applies to the design of mobile web space. According to Google’s Test My Site portal, every additional second required to load a mobile website reduces the conversion rate by 20 percent and thus costs real revenue.
Of course, it is a basic prerequisite that internet coverage and transmission speed are guaranteed. While China has comprehensive 4G coverage in the inhabited areas even at an altitude of over 4500 meters in Tibet, there are still considerable gaps in network coverage in Germany. Some ads intended for distribution across the country are simply not displayed in some regions due to slow loading times or lack of network coverage.
The bottom line:
Marketers and entrepreneurs should forget their prejudice that countries like China or India are just full of copy cats. Instead, they should not always just look west, but try looking east. There they can learn, for example, how mobile payment works via AliPay and WeChat Pay. Mobile payment is not only available in large shops there, but also at every vegetable market. It is also interesting to observe what a force mini apps are becoming, as they will gain relevance for voice assistants as skills in the world of voice marketing. Of course, advertising in Asia is generally flashier and more colorful, which will not work in the same way in every local market. But anyone interested in the further development of mobile marketing and commerce will have to focus more on Asia in the future.