Ahead of next week's ATS Singapore, Stuart Bartram, Rubicon Project managing director, APAC, asks some key questions facing the South East Asian market.

Asia is the world’s mobile phone market: not only is it the beating heart of handset production and innovation, but as an array of research suggests, it’s also a fascinating model for consumer adoption and interaction.

More than half of the world’s mobile subscribers are in Asia, and there were twice as many smartphone shipments to APAC than the US last year according to Portio Research. Meanwhile, IDC says APAC’s overall global market share of the smartphone market also sits at over 50%, and is set to reach almost 60% by 2017.

As we’ve seen before, smartphone adoption and the emergence of mobile as a fully-fledged advertising medium are intrinsically linked. And in some of these markets, mobile phones are the majority of users’ primary device for internet access. Meanwhile, smartphone penetration passed the 50% market share point in seven SEA countries earlier this year, according to GFK.

But where does ad tech sit in all of this? How do we close the gap between consumers’ time spent in mobile and the marketing investment dedicated to the channel?

The region’s ad tech sector has enjoyed growing attention in the last few months, with the increased investment of US-based DSPs and DMPs who have entered the region, as well as Singtel’s acquisition of Kontera and Adconion making the news, not to mention our own launch in Japan and the opening of our Singapore offices.

However, just as in the West, mobile advertising has been hard pressed to keep pace with its explosive growth in consumer adoption. Those that have been successful, and benefitted the most, have been companies with strong local experience, feet on the ground, and solid domain expertise.

These include companies like InMobi, which last month announced InMobi Exchange, to be powered by Rubicon Project. This is a great partnership – combining the leading automated advertising technology platform on the market, unparalleled reach, buyer relationships and mobile app inventory across Asia and the rest of the world.

With data, lat/long and other mobile-specific audience targeting attributes to be made available in APAC across mobile private marketplaces, local buyers and sellers stand to benefit in equal measure.

Going Native

If the excitement around ad tech in APAC is growing, what happens when you add native into the mix? Jay Stevens has written previously about the hype surrounding this area – and on a practical note, how native and programmatic can complement each other. Jay was also right to question how native would scale – and now, with InMobi Exchange, we have an answer.

Cutting through the hype, the real problems that a scalable native advertising solution can solve may be broken down as follows:

* For sellers, the challenge lies in delivering ad experiences while retaining users and maximising engagement, both of which result in higher monetisation.
* For buyers, the consumer experience is paramount, but maintaining this while also ensuring high engagement/conversions can be very difficult.

Given these challenges, mobile native seems more like common sense than hype. And a study from IPG also points to the positive branding effect native can have. Rubicon Project and InMobi are currently working closely with the IAB to ensure that all of the necessary standards for native are in place in the next iteration of the openRTB protocol. And we are actively 'onboarding' DSPs to enable native programmatic buying based on significant interest by brands and developers.

Buyer Appetite

Our Mobile Buyer Research from earlier in the year showed that trading desks globally expect mobile spend to double from 7% to 14% of their total spend in 2014. For buyers in APAC, the number is even higher – at more than 20% this year.

Which all goes to back up my original point – Asia is the world’s mobile phone market – and it can also be a leader for mobile advertising.

In the latest of Mary Meeker’s now legendary annual internet reports, she illustrates the mobile time spent to ad spend deficit – 20% to 4% - a more than $7bn opportunity in the US.

Which only leaves the question, how much greater is the mobile opportunity across APAC right now? And what combination of local knowledge, relationships and staff in country will it take to unlock those mobile rupees, yen, baht, and renminbi?