Global Online Trends

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I’m a self-confessed data junky. I love my numbers and if they can be plotted on a graph so I can see a trend then so much the better! Domain investors live and die by their numbers. If you ignore looking at the stats then you can miss out on some significant opportunities and take bullets rather than dodging them.

Escrow.com

Beyond the numbers and charts is understanding how to interpret them and how they may impact your business decisions. From a very high level there are a number of charts that I like to pay attention to and in this article, I’ll step you through them.

World-wide Growth in Internet Users

Ultimately underpinning every e-commerce transaction is a person wanting to buy, watch, click or doing anything. If the number of Internet users suddenly began decreasing then I can guarantee that it’s going to have a big impact on your business.

As can be seen in the chart there is a consistent growth year on year in Internet Users. This is a positive but where they are coming from is even more interesting.

World Wide Internet Growth

By far the majority of Internet users in the world is from Asia with North America only comprising 8.6%. When you compare these numbers versus the potential population that is not online you can see that future growth will come out of Asia and Africa. Given world population levels this would make sense.

Growth by Region

There’s an interesting chart that I found provided by the Ecommerce Foundation that shows the average spending per e-shopper for the top 10 countries. What I found really interesting was that China was ranked sixth.

Top 10 ecommerce spending countries

The reason why I found this fascinating is that according to the United Nations, China only has a credit card penetration rate of 16% versus the USA of 60%. Why is this important to domain owners? The credit card penetration for a region is an early indicator of marketers being able to complete the ecommerce cycle from buying online advertising through to a customer purchasing a service/product. It’s much more difficult for marketers in cash based economies to see this cycle completed.

Now let’s take a look at what is happening in online advertising. The following chart with four series of data is what domain traffic monetisers should really pay attention to.

Online Advertising Trends

The yellow line is the total amount of online advertising being spent globally. As you would expect, this is looks like hyperbolic function as greater advertising dollars pour online in search of customers.

For the first time, I was able to find some data that separated out the Mobile (grey line) and non-Mobile (orange line) advertising. Note that it’s the mobile advertising that’s really driving the advertising spend. The non-Mobile is stagnating and 2016 advertising spend was less than 2015.

If you don’t have a mobile solution for your domain name traffic then you’re missing out on a huge opportunity. In my own company, ParkLogic, we’ve been exploring a number of mobile solutions to better extract the full value from mobile traffic.

The blue line is the value that marketers place on Internet users (irrespective of geo-region). You can see that after a brief downturn post the global financial crisis online marketers are effectively valuing online customers at higher levels by spending more to attract them.

So after looking at all this data where are the opportunities? Clearly Africa and poses a large opportunity in terms of more users coming online. For domain investors, this means there are a LOT of businesses that just don’t have their domain names yet in this region.

Asia is still where it’s at. With a penetration of 45% there are a lot more users to still come online. Also, since the penetration of credit cards is typically around the 10-15% level a lot more money will flow into the ecommerce ecosystem. This would suggest there is a latent massive potential in online ecommerce that will be unleashed over the next decade. This will push up the value of users and also the demand for good domains.

All the indicators are pointing in the right direction for domain investors. The challenge will be the timing and how to best secure some of the revenue along the journey. There is one thing for certain, if you keep on doing the same thing as you’ve always done and expect a different result then you’re missing out on some massive opportunities.

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Monday, 26 June 2017
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