Asia Pacific's advertising boom
The advertising market in Asia-Pacific is growing so fast that it is expected to become the first region to surpass North America in total advertising dollars spent by 2019. Analysts credit high-speed internet penetration, as well as heavy mobile and social media adoption — particularly in Southeast Asia — for the sharp increase.
Why it matters: Because the ad market in Asia-Pacific is growing, there is more incentive for large technology companies that rely on data-based advertising revenue to invest in products and services that will increase their margins in those regions.
Triple-digit mobile ad growth and social media penetration are driving factors in advertising increases in the region.
- Many first-time internet adopters, particularly in Southeast Asia, are accessing the web through mobile devices, which is causing a spike of mobile data to be collected in those regions. Mobile ad spend in Indonesia, Thailand and Singapore will reach $1.5 billion by 2021, up from roughly $300 million last year.
- Facebook's largest user base continues to be Asia-Pacific by large margins. User growth there grows faster than any other region globally. Google's Sundhar Pichai noted that Alphabet revenues are up "significantly" in Asia, which is forcing the company to create region-specific products and engineering teams.
E-commerce also continues to be a big driver of digital advertising in the region. "Chinese e-commerce companies like JD.com and Alibaba, as well as US-based companies like Amazon, have been investing a lot in Southeast Asia," says eMarketer forecasting analyst Shelleen Shum. Google, for example, launched Tez, a mobile payments and commerce app in India that already has more than 7.5 million users who have made more than 30 million transactions.
China will continue to be the second-largest ad market in the world, next to the U.S., through 2019, per eMarketer and Zenith, which contributes to the region's advertising growth. Companies like Baidu, Alibaba and Tencent are focusing on mobile advertising innovations to grow the market even further, similar to what the large U.S. tech companies are doing in North America.
User backlash to sharp digital advertising increases in the region continue to manifest itself in ad blocking. As Axios noted earlier this year, mobile ad blocking is particularly high in Asia Pacific, especially in comparison to the U.S.