Push, Sisyphus, push
The top 50 US websites are getting more traffic from abroad than from within their own borders, yet few are willing or prepared to tap into that market, AdAge reports.
Traditionally, US marketers haven't had much interest in foreign audiences. But today there are more online and media players with an international reach, including Facebook, News Corp.'s MySpace, and Viacom, with its MTV and VH1 online properties. As the number of international users rises, it has become tempting for marketers to buy globally.
Search, social networking, and video sites are the domains with the most allure. Google's performance-based ad model, for instance, derives 50% of its revenue from outside the US, and 84% of all of all traffic to Google sites originates from international sources.
But most web companies still regard international traffic as more of a cost than a source of revenue. That's particularly true for video sites, which undertake significant bandwidth costs as their overseas audiences grow. Last year video site Veoh started blocking countries including Dominican Republic, Argentina, Lebanon, Brazil, and Saudi Arabia, which were providing significant traffic and bandwidth costs, but no revenue. YouTube recently announced a similar strategy.
Facebook – the fastest growing web service - had virtually no overseas business last year. Now the company has plenty of it to monetize in developed markets, but faces problems in some of its fastest-growing markets: Turkey (mostly carrying performance ads and few online brand advertising), Indonesia (ad rates are bottom of the barrel), and some international territories in Latin America, India, and Africa that will be accessing Facebook predominantly by mobile phone - for which Facebook has not yet developed an ad model.
Facebook's international user base is attractive for marketers who see it as an opportunity to expand their brand footprint. Five years ago Yahoo and MSN had to fight entrenched portal competitors to promote their names abroad. But in today's market, users are creating the global brands on their own, said Carl Fremont, EVP/Global Director at Digitas, responsible for Kraft's online marketing. Facebook didn't have to go in and change its infrastructure to build its brand globally - their users did it for them, he said.
Still, Facebook faces the same challenges abroad as in the US - how to get marketers to pay to leverage its platform.
Last year, a study revealed that the growing popularity of interactive tools like wikis, blogs, and social networks gives customers the ability to engage with firms as never before, and suggested that marketers put users at the center of their strategy.
A March report shows how media companies are struggling to keep up with the fast-growing expectations of digital savvy consumers and advertisers — and will need to fundamentally change the way they deliver information if they are to succeed.