Martin Shaw - Maxus Head of Digital, APAC, discusses how the market is being influenced by Asia's booming digital generation for this edition of The Change Briefing.
The Digital + Direct marketing Association have just published their annual Digital Factbook. It’s compiled from a vast array of sources from government stats to trend watchers to subscription services and is probably the best single point to access valuable information on the state of digital across Asia Pacific.
What the change means:
The report highlights the extraordinary growth story for digital in APAC. Asia Pacific now makes up nearly half (47%) of the world’s internet population and this has grown by 180m since Jan 2014 – that’s 5 new users every second! Indeed, 4 of the top 5 countries in terms of active Internet population are in Asia (1st – China 649m, 3rd ‘ India 243, 4th ‘ Japan 109.6m, 6th ‘ Indonesia 73m).
Naturally there is a bias in absolute numbers terms, with the presence of many highly populated countries in Asia, but looking at more relative measures, New Zealand (91%), Australia (89%), South Korea (88%), Japan (86%) and Singapore (81%) are the countries leading in terms of internet penetration across the region (and the first four are in the top ten globally). South Korea, Hong Kong and Japan are also the top 3 countries globally for average connection speeds.
So what does the Asian Digital population look like? Young for a start: 80% of them are aged between 15 and 44 years old and more than 60% are under the age of 35. And, as you might expect, these digital populations are proving to be heavily social (nearly 1.1bn active social users across the region) and mobile (951m ‘ half of the world’s smartphone users). Interestingly, while digital ad spend has jumped up 18% to a healthy $41bn, mobile has now increased its share to 23%.
It’s not entirely a rosy picture though and there are still challenges in certain markets. Indonesia (29%) and India (19%) both rank well below the global internet penetration average of 43%. Possible related to that, internet connection speeds are below the global average (4.5Mbps) in both places, as well as Malaysia, China, Philippines and Vietnam. And even in the relatively connected Australia, 29% of subscribers are dissatisfied with their internet speed, while 1.1m people are still choosing to remain offline.
In summary, there is still a gap between the most developed digital nations and the rest, but that gap is closing fast. It’s hard to say whether internet penetration is directly driven by the speed of the available infrastructure, given affordability will also be a major factor, but there does appear to be some linkage between the two. However, the availability and viability of mobile Internet represents a great opportunity for less connected countries to leapfrog into the digital future.
What are the implications for advertisers?
Well, it would take a particularly conservative APAC marketer not to see a big opportunity by shifting spend into digital channels. The audiences are already there in big and there is no shortage of channels to reach them through. eCommerce, video, programmatic, social and mobile all deliver valuable audiences at impressive scale. Even in the slightly less digitally developed markets, there’s a strong sense that ad spend is lagging well behind the consumer, which would indicate that those who lean into this change ahead of their competitors will reap the rewards.