Southeast Asia is witnessing a remarkable surge in the performance marketing industry due to high internet penetration, usage and a general slowdown in traditional marketing. According to the Digital 2024 April Global Statshot Report by We Are Social, 73.7% of Southeast Asia’s population is now online, indicating a significant opportunity for marketers to engage with a digitally savvy audience. Performance marketing, which emphasizes measurable results and return on investment (ROI), has become a critical strategy for businesses looking to maximize their marketing budgets and drive revenue growth.
To find out more, we spoke to Nopparat Yokubon, Country Lead for ANZ and SEA at Moloco Ads, who was able to share her insights on the current state of the performance marketing industry in the region. She discusses key trends such as the increasing reliance on data analytics and machine learning (ML) to deliver personalized and targeted ads. The availability of vast amounts of first-party consumer data and the need for effective ad spending to drive more businesses to adopt data-driven strategies.
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According to Moloco’s 2023 Mobile App Performance Marketing Global Report, 58.2% of marketers believe performance marketing is more effective for driving revenue growth than traditional brand marketing, and 55.5% view it as essential for profitability during economic uncertainty.
One of the unique challenges marketers face in Southeast Asia is the region’s diversity. With multiple languages and cultural nuances, localization is crucial for creating campaigns that resonate with local audiences. Machine learning is another critical component shaping the future of performance marketing. In this interview, Nopparat Yokubon delves into the trends, challenges, and innovations in the performance marketing industry, providing valuable insights for startups and entrepreneurs looking to navigate this dynamic field.
Can you provide an overview of the current state of the performance marketing industry in Southeast Asia? What trends are you observing, and how are they shaping the market?
The performance marketing industry in Southeast Asia is experiencing significant growth, driven by several key trends such as rapid digital adoption and increasing internet penetration in the region. Southeast Asia has seen a surge in digital and mobile usage, with We Are Social’s Digital 2024 April Global Statshot Report highlighting that 73.7% of Southeast Asia’s total population is on the Internet, marking a 2.5% increase from the same research conducted in April 2023. This indicates a growing number of consumers in the region are spending a significant amount of time online, hence presenting marketers with a huge opportunity to engage these digitally savvy audiences.
One trend we observe in the performance marketing industry is that marketers are leveraging data analytics and machine learning to deliver personalized and targeted ads. This trend is driven by the availability of vast amounts of first-party consumer data and the need for more effective ad spend. Performance marketing’s emphasis on measurable results and return on investment (ROI) is driving more businesses to adopt data-driven strategies. According to Moloco’s 2023 Mobile App Performance Marketing Global Report, 58.2% of marketers saw performance marketing as more effective for driving revenue growth than traditional brand marketing; 55.5% of marketers view performance marketing as the key to profitability during times of economic uncertainty. This shift is leading to more sophisticated marketing approaches and better allocation of marketing budgets.
What are some unique challenges that marketers in this region face compared to their global counterparts?
Localization is crucial for capturing attention in Southeast Asia, a region characterized by its fragmentation into diverse communities with varied races and languages. This diversity requires marketers to localize content for various languages and/or celebrations while ensuring cultural nuances, so as to create campaigns that resonate with local audiences.
Moloco’s solution facilitated the localization process of Rising Wings, a mobile game provider marketing the Golf King series. They observed a decline in click-through rates (CTR) six months into their campaign due to the lack of newly uploaded creatives. One of their goals was to localize the campaign across 6 countries, where English was not the primary language for some. Moloco’s in-house design studio stepped in to optimize creatives by identifying high-demand inventories per region and developing new ads in local languages. This shift improved metrics like Installs per Mille (IPM) and Cost Per Install (CPI), demonstrating that localized content was more effective than English. While the target countries in this case study were not from Southeast Asia, the success highlights the effectiveness of content localization across regions where English is not the first language, echoing trends seen in countries like Vietnam, Indonesia, and Myanmar.
Machine learning is often seen as a ‘black box’ in marketing. Could you demystify how ML technologies work in the context of performance marketing?
Introducing new technology is much like switching from navigating with a paper map to using a GPS. Initially, people might be hesitant to abandon the familiar map, despite its limitations. However, once they experience the real-time accuracy and convenience of GPS, there’s no turning back. Similarly, Machine Learning (ML) in marketing has had a black box phase, but its benefits are now clear and indispensable for it to be ignored any longer.
Machine Learning (ML) technologies play a crucial role in enhancing performance marketing by analyzing large volumes of data to derive insights and optimize marketing strategies. For app marketers in particular, Mobile demand-side platforms (DSPs) leverage advanced ML to access a vast programmatic ecosystem of mobile ad supply and facilitate real-time bidding (RTB) based on specific factors, such as audience targeting and conversion probability. Advanced machine learning allows companies to process vast amounts of data, make predictions in milliseconds, and continuously learn and improve over time.
Performance marketing is also highly focused and targeted, leveraging its ML capabilities to precisely target specific user segments. ML enables user acquisition managers to predict how new users will behave in-app, going beyond traditional demographic constraints like age or gender. Through ML, performance marketing channels can precisely identify and estimate high-value users and calculate bid prices so advertisers can pay just enough to win the impression while able to maximize their ROI. When integrated with digital marketing platforms, this approach allows for personalized communications tailored to reflect individual interests and preferences. Companies like Moloco play a key role in supporting marketers in their campaigns, using a combination of ML and performance expertise, which aligns best with their advertising objectives.
What steps can marketers take to better understand and leverage ML in their campaigns?
While Machine Learning excels at making complex decisions based on historical data and typically relies on pre-programmed linear models that require manual inputs, Operational Machine Learning can take it up a notch by being fully autonomous in decision-making, speed, scale, and adaptability. Operational ML will be useful for marketers who are looking to optimize targeting strategies in real-time within an evolving advertising landscape; However, this also means that they will have to spend time familarizing with each ML model and align their objectives with the capabilities of ML models right from the start.
Looking ahead, how do you see the role of machine learning evolving in performance marketing? What innovations should marketers be excited about?
We anticipate that more marketers will incorporate Machine Learning in their performance marketing strategies in the future. Machine learning enables marketers to deliver highly individualized experiences to each customer on a massive scale. As consumers increasingly expect personalized interactions whenever they shop, meeting these expectations is essential for running successful and effective campaigns. Through ML models, marketers will be able to analyze vast amounts of data on each user’s behaviours, preferences, and context to dynamically generate personalized content, product recommendations, and offers in real-time. This level of granular personalization was previously impossible, but ML makes it feasible across millions of customers simultaneously.
At Moloco, we are leading this trend by leveraging advanced ML to harness real-time data, enabling businesses to achieve precise targeting and drive incremental results. Our high processing capacity allows us to deliver over 75 billion impressions every month. This equips marketers with the solutions and tools to deliver top-tier advertising campaigns and fully utilize operational ML.