|Issue:||Asia-Pacific I 2015|
|Topic:||Bridging the Digital Divide in Asia-Pacific|
Samuel Lee joined Equinix in 2000 and now serves as President of Equinix Asia-Pacific, overseeing the management, strategy and growth of the company’s Asia Pacific operations. Previously, he served as the Managing Director of Equinix Hong Kong, where he successfully led the Equinix Hong Kong team in building a strong position for Equinix in the financial services industry in Hong Kong.
Mr. Lee brings a wealth of experience in telecom and Internet services as well as expertise in startup operations. Prior to joining Equinix, Mr. Lee served as Managing Director of Pacific Gateway Exchange (PGE), a provider of wholesale and retail long distance, Internet, and bandwidth services. He founded Telekom Consulting Ltd., a consulting firm offering strategic assistance to network providers in the deregulated telecommunications market in Hong Kong and Asia. He also held management positions at Teleglobe International, Intel, and Sprint.
Mr. Lee holds a B.A. from City University of Hong Kong.
Research from Ovum shows that the Asia-Pacific digital games market is well on its way to doubling to reach US$30.3 billion by 2016. Ovum estimates that Asia-Pacific will have more than a billion gamers by then, of which nearly 900 million will play their games on a mobile device.
English has long been considered the language of the Internet, with numerous studies putting the percentage of English-language content online at something like 50-55%. But, when you look at the distribution of the world’s Internet user community, you get a different picture.
According to InternetWorldStats a survey of Internet users worldwide puts the combined total of users in English-speaking locations – including North America, Oceania and Australia at just 11.1%. While figures for the United Kingdom aren’t shown, they can only be a fraction of Europe’s total of 19.2%.
The biggest region by far is Asia, which comes in at a whopping 45.7%.
Given the figures, it’s perhaps not surprising that demand for content in Asia is on the rise, especially when it comes to gaming, video and rich mobile content, which have transformed niche industries into multi-billion dollar businesses.
In fact, according to statistics from PricewaterhouseCoopers (PwC) Entertainment and Media Outlook, three of the top ten fastest growing territories for entertainment and media spending are from Asia – namely China, India and Indonesia.
This has spawned the creation of interdependent ecosystems and the rise of new regional players that play a pivotal role in how content is delivered to end users. We’ve seen a virtuous cycle going from mass adoption and consumption of global online content to the creation of regional content and now increasingly the export of local-brewed content regionally and globally.
The rise in Asian content is evident from the cross-border, intercontinental investments and expansions being made by some of the key digital media and content players in the region. For example, in recent years the majority of the largest merger and acquisition deals in the gaming space had either Chinese, Japanese or South Korean buyers.
Meanwhile, Asian consumers are increasingly tech enabled. According to IDC’s most recent Quarterly Mobile Phone Tracker, vendors shipped 23.3 million smartphones in Asia/Pacific (excluding Japan) in Q3 2014, compared to 12.8 million units in the same period of 2013.
On top of this, government support for national high-speed fibre deployments combined with mobile operator investments into high speed LTE networks mean that consumers are finally able to truly benefit from the promise of a converged, connected society.
Consumers, especially those between the ages of 18 to 25, expect their digital media content to be delivered as a personalized experience, meaning their content on their desired devices when and where they want it. Let me say that again. They “expect”, not “demand” it. If they don’t get what they want, they will move on to another service option.
This places a growing burden on content and digital media providers, as they not only have to worry about their core offering, but they also have to ensure that the pipes delivering the content to customers are cost effective, efficient and always-on. Today, quality, reliability and user experience are critical components to the success of a content company.
Let’s take gaming as an example. Research from Ovum shows that the Asia-Pacific digital games market is well on its way to doubling to reach US$30.3 billion by 2016. Ovum estimates that Asia-Pacific will have more than a billion gamers by then, of which nearly 900 million will play their games on a mobile device.
While this represents a huge business opportunity, these gamers are dispersed amongst the many countries across Asia, and serving their needs requires a well thought-out infrastructure deployment strategy – one that balances performance with cost.
As Asian content companies go cross-border, it’s essential they find a partner that can enable content delivery with low latency and high reliability, creating the best possible experience for their users.
Content heads for the cloud
One clear characteristic of Asia’s content explosion is the increasing use of the cloud to support media services.
In the games sector, access to cloud computing allows multimedia and online gaming companies to respond swiftly to activity peaks – adding additional processing power to deal with demand. Cloud editing solutions are beginning to be deployed to help production companies deal with the challenges of creating rough cut edits off -site, although for most producers and broadcasters, there is a long way to go before current workflow solutions are completely replaced by cloud alternatives.
Nonetheless, there are advantages in using cloud workflow solutions, particularly for non-traditional media companies and services. Over-the-top (OTT) video specialists and online video advertising solutions providers do not necessarily have substantial legacy workflow infrastructure, meaning that cloud services are a viable option.
With the increasing reliance on cloud solutions, media companies are finding that they are becoming part of a wider ecosystem of technology providers and other content companies. Furthermore, those firms operating online services, even if they host their core infrastructure themselves, do not operate in a vacuum. Websites and systems will typically integrate with multiple other partners. This can be as simple as the integration with a payment gateway, however can encompass other parts of the online value chain, beyond workflow solutions and platform management to advertising solutions and content delivery.
At each stage, media companies rely on partner services to support their own systems.
Although it would seem in an increasingly virtual world that the location of processing power would be a consideration of lesser importance, the growth in cloud and third party managed services is helping to drive increased use of data centres, and the early stages of content and technology data-hubs.
As this use continues to grow, there will be ever increasing scope for content providers and technology solutions to take a measured approach when it comes to choosing where to place their IT infrastructure.
Advertising and marketing growing fast
The media and advertising sector is also expanding at warp speed in Asia, yet the shift to a data driven media economy has brought with it a rush of fear. The rapid acceleration has altered business processes, scope of work and roles and responsibilities, and has changed the industry’s talent demands.
There are four key challenges for the Asia’s digital advertising industry today: talent, creativity and production, data management and measurement – all of which need to be top of mind in order to bolster success in the industry.
One of the headline issues is the massive talent gap. The fast tracked development of the industry has seen a collision of two disparate worlds: the creative, front-end realm of marketing and the quantitative, back-end of data analytics. Today, the digital advertising sector needs a new breed of talent that can bridge the gap between the language that analysts speak and the language that marketers talk.
To be a successful digital marketer today and solve the talent conundrum, companies need people that can understand and leverage data to enhance the planning, optimization and measurement of programmatic buying efforts. However, they also need talent that can make strategic recommendations based on data, as well as talent that can analyze campaign performance of programmatic buys in order to meet objectives.
All organizations need to confront the challenge of integrating new data streams and technology platforms into their cultural and workflow DNA, and the advertising industry is just beginning to do so. Hiring the right data savvy talent is now not just a matter of keeping up, but helping pivot organizations into the digital future and driving systematic change. Analysis and understanding of data is the key, which brings us to the second challenge.
The data challenge – how to use, manage and obtain it – is a major issue. It’s clear that data is critical for developing targeted strategies, but what isn’t clear is how to legally obtain the data and how to effectively analyze it. What the industry needs is consistent third party data that can be used for effective targeting, as well as data gurus or IT systems that can analyze first party data for marketers. While it seems like a simple solution, privacy and legal issues make this challenge even more difficult.
On top of this, the digital advertising industry also needs consistent and standardized measurement systems and processes, to ensure data is being accurately and fairly interpreted across markets. The “measurement challenge” is causing immense confusion in the market, as companies are producing conflicting data points. What’s needed is a standard method of measurement so companies are able to measure based on an apples to apples comparison.
This is difficult, however, as digital measurement keeps evolving, thereby making it challenging for marketers and agencies to keep pace with it.
And if this wasn’t enough, there is also the creativity challenge looming over digital marketers, as leaders across the Asia-Pacific region have expressed vast disappointment over the quality of creative output. While digital advertising has the ability to provide far more powerful ROI for advertisers due to its personalization and targeting abilities, much of the current digital creative is often presented as an afterthought, adapted from either television or print creative.
Again the disconnect between the old world of traditional advertising means that creative directors often lack knowledge of digital technology and how it can be used to develop engaging, new world campaigns.
To remedy these challenges, however, it’s key for leaders to take the time and understand the role that data plays in their industry today. Understanding that data is a strategic tool rather than a weapon of fear is important for the success of the industry.
To do this, however, companies must merge reliable technology infrastructure that can effectively process and analyze data, with talent that can apply the data to marketing strategies. This two-pronged approach is the way to the win in the new digital world.