Facebook has more than 200 million members worldwide who spend around 3.5 billion minutes on the site each day. Visitors to YouTube watch around 5.8 billion video clips each month and more than 50% of the YouTube audience is based outside the United States.
While these numbers definitely sound very impressive, Internet companies are slowly beginning to realize that more eyeballs don’t necessarily translate into more advertising dollars and what really matters is the location of these eyeballs.
An NYT report says that the number of Internet users in developing countries (like India) is rising rapidly but web companies are still pulling out due to the high bandwidth costs and low advertising rates.
The CEO of Veoh has this to say about users in Africa, Asia, Latin America and Eastern Europe:
..these people are so hungry for this content. They sit and they watch and watch and watch. The problem is they are eating up bandwidth, and it’s very difficult to derive revenue from it.
And he’s isn’t alone in saying the people in developing countries aren’t really interested in online advertising. The chief of Joost too suggests that video companies should pull out of Asia, Latin America and the Middle East if “they really want to make money”.
Find this article at: http://www.labnol.org/internet/advertising-revenue-and-international-eyeballs/8339/
Tags: feature, online video, opinion, statistics, youtube, Internet
Reader Comments
“And he’s isn’t alone in saying the people in developing countries aren’t really interested in online advertising.”
The article didn’t say that “people in developing countries aren’t really interested in online advertising.” In fact au contraire. They are just as interested as anyone else. What the article stated is that advertisers aren’t interested in consumers in developing countries.
Written by Joseph on 04.27.09
That’s very true. I often wonder what do they earn from india or other such markets. On youtube or orkut, which are the most popular sites in india, the ads from google are based on words used in the page, which means there should be some business that caters to people who are looking for related content on the internet. When i go to orkut, i see ads related to my school name, but not from india (my school name being st.joseph’s, which can be anywhere), if i go to Gmail, th ads are often related to thing that i may care about, but are not located in india. From the sellers perspective, there are very few things that people buy online in india, and those almost never need advertising.
Written by Indresh on 04.27.09
Amit, what is your opinion on this?
what would be the impact for us (web start-up and online publishing) in Asia ?
Written by vic on 04.27.09
Indresh was right on.
With Gmail at least we get use some of the sponsored links and a few ads. Orkut is pathetic. But in this regard, Facebook seems to be moving in the right direction. More and more I am seeing ads related to businesses located in areas like Bangalore, Delhi, etc. Given the fact most facebook users live there (as of now), I think they are doing a better job. But even Facebook should come up with better ideas to sustain itself as users from other areas are growing rapidly.
It is as much a loss to these as it is for users. If big companies fail to come up with better advertising plans, some body else will. But I also think the free lunch days of the Internet are numbered. [http://bit.ly/2Bp99]
Written by Srikanth on 04.27.09
Amit,
that’s why your blog is written in english ;-) to reach these uk and us countries with high advertising rate. Where do you find your World map of Internet dollars ?
Written by jeanviet on 04.27.09
There have been umpteen number of articles on this topic and I guess the importance on this aspect is slowly being realised.
Only now have people realised the potential of the zones from where we get the money. Good article….
Written by Unoblogger on 04.27.09
well youtube may be using a lot of useless bandwidth but i dont agree with other content sites. Certainly the content providers are generating revenue from indian audience. Most of the sites have geographically targeted advertising choosen by the advertiser. Its the advertiser who decides if the ads need to be show to a customer in india or other developing countries.
The advertiser know it better
Written by maya on 04.28.09
According to logical and statical view , this article is best . But in my openion , developing countries like India , trend of online advertising is increasing because , we seeing maning ads also Hindi started in India and people also started searches with hindi keywords . I think in future , if it will grow fastly and you can also think about to write Digital Inspiration ( Hindi ) with hindi ads only .
Lot of thanks , I think collection of statical data takes much more time for writing any article from a simple tutorial .
Written by Vinod Kumar on 04.28.09
Once, i used google on mobile to get pizza delivered. Google mobile keeps your location saved, when i searced for pizza, i got all nearby pizza locations with phone numbers right on the results page. Well, that’s one place where online advertising can earn money in india.
@srikanth
yeah, Gmail is better and facebook is best for local ads
Written by Indresh on 04.28.09
I completely agree with you Amit. Not all people in developing countries are ready to shop online with their credit cards. Hence the people are ONLY interested in web content and not the ads displayed. Maybe in near future, the traffic from the third world countries would be redirected to servers that charge less!
Written by Personal Web Mate on 05.01.09
I write from Peru, a developing country. I think is unfair, think our people are not ready to use credit cards in the web. I think the people is ready to shop in internet, only happens that bandwith is too low (I have 1 Mbps connection, and before I had 2oo kbps), and many people doesn’t have internet in home, and only they access in their work, or in “internet booths” (check “cabinas de internet” in google images), which have old and no secure computers (No antivirus, no windows updates, with IE 6). In other side, there are “the domestic advertisers” who doesn’t believe too much in Internet profits, and they don’t teach to their users to buy more in the web).
Written by Marco on 05.04.09