Why Social Media is Cooking in Emerging Markets

The Arab Spring, the Slavic Spring and the Iranian Twitter revolution all proved how deeply engrained the use of social media is in emerging market countries. But did you know that their rate of engagement with the likes of Facebook, Twitter, and YouTube is growing a whole lot faster than that of developed markets?

This post first appeared on Memeburn and was written by Michelle Atagana. Memeburn is an award-winning site based in South Africa that tracks emerging technologies primarily in emerging markets, including the Brazil, Russia, India, China and South Africa. SiliconFilter occasionally features relevant posts from MemeBurn.

Social media penetration is on the rise in emerging markets. A recent report from research and analysis site, eMarketer.com, looking at three studies from Pew Research Center, TNSDigitallife and Brazilian-based F/Nazca Saatchi & Saatchi on social media usage and how it is aiding brand awareness in emerging market territories.

Last year eMarketer estimated worldwide social network ad revenues would surpass US$8-billion by the end of 2012, allocating just under half of that figure to the United States. “Non-US revenues were expected to grow faster, as marketers attempt to increase brand awareness, market share, and profits in fast-growth countries like Brazil, Russia, India and China (BRIC) and beyond,” says the research and analysis site.

Social media penetration in large emerging market regions such as the BRIC territories and countries Mexico and Indonesia, currently ranges from 56% to 86% of internet users, according to Pew Research Center’s “Global Digital Communication: Texting, Social Networking Popular Worldwide”. The highest figures go to Indonesia and Russia, at 86% for each in May 2011, up from 63% and 76%, respectively in 2010 — though F/Nazca Saatchi & Saatchi research reveals Brazil’s internet penetration reached 93% as of August 2011.

Pew’s research further finds that in some markets, especially those with relatively low overall internet penetration, social network usage is higher than the US’s 60% of internet users. Notably in the past year, social media usage in Egypt has grown from 18% in 2010 to 28% in 2011.

A key point revealed by these studies is the way social media is being used in these regions and what it means for the emerging world. Last year’s social media revolutions may have woken the world up to the role social media can play in times of unrest, but also showed how important social media can be when it comes to consumer behaviour.

According to the TNS “Digital Life 2011″ study, social media marketing is more effective in emerging markets than more established ones. The study shows that users in “BRIC, Indonesia and Mexico were more likely to view social networks as a good place to learn about and buy brands and products than users in developed markets like Canada, the UK and the US”.

eMarketer explains the difference in growth between emerging markets and developed markets using an “experienced consumer” analogy. According to eMarketer, developed market users “are accustomed to third-party eCommerce sites and payment methods, and look to social networks mainly for keeping up with friends. In emerging markets, eCommerce is untested and new; and knowing the person or brand, even virtually, can engender more trust among users.”

The report speculates that the reason emerging market users engage more with brands on social media is due to “higher levels of trust” in these regions, which allows social networks to play a bigger role in the purchase cycle. Online shopping is still a relatively new idea in most emerging markets, being able to engage with brands on social media platforms helps build user confidence.

In the TNS report, Larry Bruck, senior vice president of global media and marketing operations at Kellogg Company, says “Digital is a business enabler, not just a marketing enabler.” Using the emerging world as example, Bruck explains that social media, not just online media, provides an opportunity to foster new business for savvy brands.