Skip to content
5 min read

The APAC ad market: Should we all be looking East?

The APAC ad market: Should we all be looking East?

According to recent reports, this year Asia Pacific will overtake North America as the largest advertising market in the world. And with annual growth rates nearly twice that of North America, APAC ad spend is expected to dwarf the rest of the world in just a few years. This trend is reflected in the surge of visitor numbers from Asia to the leading trade fair for digital marketing, dmexco, taking place in Cologne this week.

As you would expect, APAC’s numbers are being driven by Japan, Korea and particularly China, where digital ad spend is seeing exponential growth – this year half of all Chinese advertising spend was online. To say that Asia has embraced the digital economy would be a colossal understatement: over the next 3 years, while America’s e-commerce sales will grow from $300bn to $500bn, China’s are expected to quadruple to nearly $2 trillion. In Japan 70% of consumers buy online – second only to the UK in the global rankings, and in Korea half of all online purchases are made on mobile devices.

As in the West much of the digital advertising spend is funnelled towards social media of which there are an estimated 1 billion active users in Asia – 97.3% of whom do it on mobile. But what sets Asia apart are the search, e-commerce and social media ecosystems that have evolved independently from the West. In China, the landscape is dominated by Baidu, Alibaba and Tencent, owner of ‘super-app' WeChat, which now has over 800 million subscribers. In Korea, Naver (search) & Kakao Talk (social) are the market leaders, while in Japan Yahoo and Line (the local version of Whatsapp) are more than giving Facebook and Google a run for their money.

Intralink Group, a UK company which helps western firms grow their business in Asia, has been following the trends with interest. Head of Digital, David Royer, who is based in Tokyo says: “Asia represents a massive opportunity for solutions that can maximise ad revenues, optimise spend or leverage social media footprint. But the unfamiliar platforms and cultural and linguistic challenges mean that to gain traction, you really need to understand the local commercial dynamics and get your strategy right.”

And it’s not just the technologies that are different. As Royer says: “Consumer tastes and advertising trends all have their own market-specific idiosyncrasies. Japan is interesting in that, unlike in the West, traditional TV is holding its own against video-on-demand, although the launch of Netflix and Amazon last year is starting to have a real impact.

“In Korea ‘concept video ads’, which use hidden cameras to film unsuspecting first-time users of products, have taken on a life of their own. A recent Korean North Face advert, for example, has been viewed more than 12 million times on YouTube.

“And what’s most interesting about China is probably the sheer scale. Unlike in the US, marketing to second and third tier cities can be a great strategy. Most second-tier Chinese cities are far larger than “first-tier” American ones – in fact there are now over 160 cities in China with more than a million people.”

This year’s dmexco in Cologne will be the largest yet, and as the world’s brands, agencies and technology providers gather to exchange ideas and formulate strategies, one thing is clear – if western firms have truly global aspirations they can no longer afford to ignore Asia.

About the Author

Alex Gover

Alex studied Japanese, Chinese and Economics at Oxford University and went on to take a Diploma in Advanced Japanese at Sophia University in Tokyo.

This website uses cookies. For more information about these please click here.
By continuing to browse you consent to the use of cookies