Online, there is no such thing as borders. As long as anyone has an internet connection, communication is (mostly) free. Increasingly, brands are betting on the virtual elimination of borders for global growth, but unlike consumers, they face barriers in reach, content, commerce, distribution and fulfilment. Reach can be especially tricky; as local media is highly fragmented. In contrast, social media is nearing universal adoption and provides a great platform for brands to reach consumers in many local markets.

As social platforms mature in the US and Europe by introducing new paid ad products, platforms are becoming increasingly pay-to-play and the opportunity for organic reach is dwindling. In order to maintain engagement, brands are forced to resort to these paid methods, even if they’ve already built a following on the platform.

However, there may be a gap here that brands can take advantage of in local markets. Platforms launch ad products in their home markets before rolling them out internationally, therefore organic reach can still be achieved in emerging markets where social media advertising has yet to become aggressively monetized. Our analysis of Facebook’s own financial and Unmetric data shows that the platform lags in monetising Facebook users outside of the US, while organic reach of owned media, such as brand pages, still exists in markets like Brazil. Snapchat, Instagram, and to some extent, Twitter, are still testing paid ad formats in their home-markets, which means that these platforms present a great opportunity for organic reach.

Additionally, local social networks such as WeChat in China, tend to be less focused on brand monetization via ad products because they are able to offer paid services to users, like commerce, micro-transactions and rideshare services such as Uber. WeChat can even act as a commerce platform for brands, combining reach, one-to-one engagement, and the ability to transact that Western-based social platforms can only dream about.

And the prize at stake is rich. Globally, e-commerce is expected to reach $2.43 trillion in 2017, a 24.7 percent increase over 2016, as forecast by eMarketer. With growth concentrated among a few players in the US - Amazon accounted for a colossal 53% of all US e-commerce growth in 2016 - brands are looking to local markets outside of the US for incremental growth.

Social media is one way to make sure that your brand stays top-of-mind in these local markets, but you have to be able to follow through with an outlet for consumers to buy. We found that brands are struggling to offer direct-to-consumer e-commerce sites in Asia Pacific (75%) and Latin America (52%), the two markets where there still remains organic reach on social. Time is of the essence - these markets aren’t as green as they seem and organic reach via social is fleeting.

 

By Mike Froggatt, director of Intelligence at L2


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