Three Things to Know About Marketing to Consumers in an Emerging Market

Emerging markets have become a hot topic of conversation recently. As mobile companies continue to make a play for their next billion customers, the big question is, “How do I reach those consumers?” For major players like Google, Apple, Samsung, and Facebook, the point of convergence is emerging markets. It will be through mobile devices that those brands connect with emerging market consumers, essentially making mobility the key to unlock this new mass of customers.

According to independent analyst and consultancy firm, Ovum, analysts expects China, India, and Indonesia, to have 3 billion mobile connections between them by 2017. Those figures highlight the massive potential of these untapped markets. That creates new audiences ripe for mobile advertising.

While mobile advertising has boomed in Western markets, emerging markets are the next frontier. In fact, ZenithOptimedia projects that in 2014, overall advertising spend in emerging markets (including mobile) will account for one third of global spending—overtaking the United States, currently the world’s biggest market. But what is the winning formula?

Here are three tips for marketers to connect to the next billion customers.

1. SMS marketing is the top mobile marketing channel

When identifying the most effective forms of mobile advertising, SMS marketing is the most welcomed format across emerging markets with 51% wanting to receive promotional messages in this way, according to a recent study commissioned by my company, Upstream, and conducted by third-party research firm YouGov. That figure rises to 65% so long as the message is relevant to their location. Consumers in these markets are much more open to receiving promotional material over their mobile device through SMS, whereas consumers in the West are inundated with marketing messages across all digital devices.

2. Users care more about content, than promotions

Marketers must be aware that consumers in emerging markets have completely different attitudes towards mobile marketing than those in the West. Of course, they share similar taste in content like social media and music, but they actually prefer “useful” content. For example, we’ve found that some of the most popular mobile marketing overseas includes English lessons in Brazil and health information in Nigeria. Research also found that 61% of Brazilian consumers use their phone for news, and 74% of Nigerian consumers use their phone for education. This is a very different from U.S. consumers, where the majority of users (55%) responded that use their phone primarily for music.

3. The Internet Is Facebook

In emerging markets, consumers think that the Internet is Facebook. With the recent announcement of Facebook for Every Phone, more than 100 million mobile users worldwide are now regularly accessing the social network from more than 3,000 different models of feature phones, some costing as little as $20. Feature phones are an incredibly important market for Facebook as they remain the most popular device in emerging markets. Gartner revealed that sales of feature phones in Q4 2012 outstripped smartphone sales globally (264.4 million units to 207.7). Those users will become more attractive to marketers as their incomes grow and they gain broader access to the Web. For many people in developing countries, the new Facebook app could be their only Web portal and, as such, marketers must bear this in mind when looking to reach these consumers.

Previous studies have shown that improving Internet access can help boost a country’s GDP and improve productivity for entire nations, which makes the rise of the mobile Internet even more noteworthy in emerging markets. Furthermore, those improved network connections and the increasing availability of quality content will undoubtedly drive usage among users that are likely to have their first Internet experience on a mobile device. Thanks to the entry of low-cost smartphones, consumers in developing countries are going straight to the mobile internet— bypassing devices such as desktop PCs, making low-cost smartphones more of an essential and multifunctional tool for consumers to connect to the brands they love.

Of the world’s six billion mobile phones, more than three quarters are located in the developing world. Mobile devices have become a necessity in our daily lives and most of us have come to rely on them as a means of communication and source of instant information. In fact, mobile devices have become so essential that 2013 is set to be the year where the number of mobile Internet devices will even outnumber humans (CISCO: 2013). With that said, mobile is going to create a content revolution in emerging markets. Consumers are gaining more purchase power, opening the gates for companies to tap this vast consumer base. This is a critical time for marketers to evaluate their entrance strategy into these developing countries and it will be interesting to see which company prevails.