This guest column is by Ryan Gao, VP – Sales & Marketing, Offerslook
In the last 5 years or so, with the boom of mobile devices, mobile content and traffic has grown exponentially. This also leads to rise of mobile advertising. According to eMarketers, mobile ad spending will hit $100 billion in 2016. Among the $100 billion pie, one of the ‘oldest’ form – affiliate marketing, is estimated to take up 10-15%, reaching $10-$15 billion. And as the need of acquiring mobile users grew, large part of the budget was spent by app advertisers, including but not limited to mobile tool apps and mobile gaming apps.
Most of affiliate marketing advertising is run through advertising platforms. I am a part of a 3rd-party SaaS platform for performance marketing networks, Offerslook, which is supporting the operations of 300+ performance marketing networks globally. Thanks to Offerslook’s data, we can take a glance at some interest facts about affiliate marketing.
Over 30% of our customers are from India, which is coincident with the fact that India has become a center of mobile traffic and mobile advertising. According to the latest Internet Trend 2016 report by Mary Meeker from KPCB, India has over 277 million internet users, growing at 33% YoY and surpassing US as the 2nd largest internet user territory, and the penetration rate is just 22% with huge space for growth.
These opportunities encouraged Indian entrepreneurs to start up online businesses. The huge volume of mobile advertising and its potential unlock the their enthusiasm to tap into performance marketing networks.
This trend is also observed in other areas of the globe, such as Vietnam from SEA and Russia. Entrepreneurs from other countries such as China and Israel, are however not spurred by trend in their home states, but they invest into global opportunities, helping local content developers or other global players to acquire users globally.
Of all the advertisers recorded by us, 26.02% – the largest proportion comes from India. This is largely due to huge amount of venture capital to Indian startups in the last 3 years – 2015 alone saw $9 billion getting invested, advertisers increased their spending dramatically on acquiring users, and more startups emerged.
Interestingly, China ranks 2nd in terms of number of advertisers. The reason behind this is that plenty of Chinese internet firms are going global to seek broader space of user growth while avoiding fierce competition in China. And many of them are eyeing India as a market with great potential after China.
In terms affiliates, India again ranks #1. Spurred by promising development of mobile advertising, many Indians started their affiliate networks or simply started blogs and started promoting products on their blogs.
This phenomena is similar in other emerging markets such as Indonesia, Vietnam and China. USA is traditionally strong at affiliate marketing and leads in quality. Israel is particularly active in mobile advertising or high-tech industries – its size is relatively small but consider its population is smaller than 10 million – not even 1% of India.
As for traffic conversion distribution – relative scale of traffic that is converted to install, sales, etc., India is again the top choice – India is the top priority for most multinational internet firms. But US is very close – US is one of the top choices for Game developers, thanks to its huge user base and high purchasing power.
Out of the thousands of performance marketing campaigns, Utility Apps (ranging from system cleaner to browser apps) were the most active. After the successful stories of Cheetah and UC browser, there appears to be success path for utilities: Build good products -> Win VC investment -> “Buy” huge base of users -> Monetize with advertising.
The entry barrier is probably the lowest to build an utility app, and with investment, Utility app makers were the most passionate on buying traffic to acquire traffic within the shortest time.
Entertainment and Games are the 2nd hottest or money-burning category. They both point to the increasing user needs of leisure and targeting to squeeze spending from the users. While eCommerce takes up small pie of marketing campaigns, they’re however with huge spending.
In summary, we see that the rise of mobile device and mobile advertising had triggered a boom of entrepreneurship in emerging markets especially in India. And affiliate marketing as an important mobile advertising tool, is helping mobile advertisers acquire users globally, with the focus of utilities apps, entertainment and games. Among all markets, India is a top notch in many ways – its huge market potential will drive continuous investment from both local and global funds and developers.
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