In the world of advertising, the dollars inevitably flow to where the highest concentration of eyeballs can be found. Increasingly today, that’s in a new (predominantly mobile) breed of super apps. They’re the next frontier for adtech.
A super app can be described as a self-contained network, such as ride-hailing apps (drivers and passengers) or online marketplaces (buyers and sellers), which millions of people use every day right from their mobile phones.
In November, Bloomberg described these apps as unique in their ability to allow users to “communicate, shop online, order rides, read books, play games, get food delivery and pay for anything within a single, unified smartphone app”. WeChat is arguably the king of super apps, with more than one billion people using it at least once a month. In fact, the whole phenomenon is a predominantly Asian innovation.
To use the example of WeChat, users can consume brand and media content directly within the app through dedicated pages and channel feeds. This means websites are being bypassed in some senses, with content consumption happening in-app and off-websites. Of course, users are still able to click into content and be taken to websites, but for advertisers it’s an appealing new type of publishing altogether.
In Southeast Asia, this new wave of super apps is best represented by platforms such as Grab and Go-Jek (with more than 100 million downloads) in ride-hailing, and Carousell in online marketplaces (widely expected to be one of the region’s first wave of unicorns – start-ups valued at $1 billion).
Backed by billions of dollars in funding, these mobile platform apps have amassed hundreds of millions of users across the region, becoming as powerful as many publishers as a channel for regional and global advertising agencies and brands to buy inventory from.
Asia’s programmatic adoption for super apps
In general, programmatic still has room to grow: some estimates suggest that only 65 per cent of money globally spent on advertising in digital media in 2019 will be traded programmatically. Perhaps surprisingly, Asia has been much slower to embrace programmatic advertising than the rest of the world.
Nonetheless, there are bright spots. Thailand, for example, is one of Southeast Asia’s leading markets for internet and mobile internet usage, and Indonesia is expected to grow to US$425 million in programmatic ad spends by 2022. Overall, programmatic is expected to account for more than half of digital media in Southeast Asia by 2023 and be the default by 2028. This suggests there is much room for growth.
Overall, spends in Asia are predicted to steadily continue growing at around 18 per cent year on year, reaching a projected programmatic ad spend of US$5.4 billion in 2022. If we throw super apps into the mix, this opportunity will grow even bigger.
Meanwhile, in light of fierce competition and pressure from investors, the super apps must continuously search for ways to increase or diversify revenue streams. In many cases, their business models are loss leaders, with slim revenue channels that promise huge returns at a later point. Advertising technology and programmatic can be a huge opportunity here to help drive healthier bottom lines. For Chief Financial Officers in particular, whose mandates include creating more revenue streams, this is an opportunity not to be missed.
There are two things to consider in terms of how we move forward from here: the first is around data, and the second is in terms of technology. In a sense, the data is already here, on these super app platforms, waiting to be harnessed by advertisers as well as the platforms themselves.
Super apps in Southeast Asia can provide a rich source of data for global agencies and brands looking to target this region of the world. But right now, the technological solutions are not in place to allow seamless buying and selling of programmatic ads in super apps, which brings me to my second point on the technology.
To capture this market opportunity, technology and attitudes must catch up with this emerging frontier of adtech. A new programmatic advertising ecosystem is overdue for the region, one that can connect brands, agencies, and this new breed of super apps under one roof.