The Missing Billion: How Analytics is Wiping The Emerging World Off The Map
Did you know that more than a billion internet users are currently invisible in traditional web analytics? Or that the USA is no longer at the center of the world’s digital map, trailing other countries for activities like social networking, buying online or watching TV on-demand?
It’s these issues which we explore in our brand new white paper, The Missing Billion(download it for free here, and see the Economist’s take on it here). Inside the report, we argue that hundreds of millions of internet users are being incorrectly geo-allocated or overlooked by passive analytics. It’s a problem which affects those in fast-growth markets the most – with users in places like China, Russia and India often being assigned to big, “traditional” internet hubs like the USA – but it’s one which has the potential to impact internet users in pretty much every country. Indeed, as I write this in London, passive analytics records me as being in Dublin, Ireland. Without me knowing it, I’ve suddenly become an Irish rather than a British internet user.
Big Deal, some of you might be thinking. But if you consider the way online adverts are served, marketing budgets are distributed or digital content is released, then this skewed map of the world’s internet population carries major ramifications. If an advertiser believes that the bulk of a website’s traffic is coming from America when large numbers of its visitors are actually in Asia or Latin America, the effectiveness of their campaign is considerably compromised. If you’re an internet user in, say, Indonesia, then the amount of content you can watch is much lower than it should be, as website owners haven’t realized there is a significant audience in your country for things like on-demand viewing or live streaming. And, more fundamentally, The Missing Billion phenomenon is perpetuating a somewhat imperialist view that “emerging” markets are still minor forces which don’t justify the same levels of attention or investment as “mature” nations. All this despite the fact that their online populations are growing at rapid rates each year, with the numbers of internet users in places like China, India and Indonesia now dwarfing the equivalents in parts of Europe and North America. In short, our view of how “connected” the world has become is being seriously distorted. We simply haven’t clocked the fact that America – while still a hugely important and valuable market – isn’t the global internet force it was some 20 or even 10 years ago.
So, what’s causing the Missing Billion problem? Well, as you might expect, there’s no single and easily fixable issue; it’s a combination of factors which have led to the over-exaggeration of the US and other big markets. But some of the key drivers include:
* A serious mismatch in terms of how many IP addresses are assigned to each country, vs their actual number of internet users (this is crucial, as an IP address is typically used by passive analytics techniques to identify where people are based). Currently, there are more than nine IP addresses per real-life internet user in America. In no way can this reflect actual, on-the-ground internet usage – offering clear evidence that lots of people from other countries are being automatically (and sometimes deliberately) re-routed through the US. The same patterns are present in places like the Netherlands and Ireland, too, showing why the “developed” world is being so dramatically over-represented.
* Over a quarter of internet users are going online via Virtual Private Networks and Proxy Servers – mainly to avoid internet restrictions, to stay anonymous and to access geographically-limited TV and film content. With many of these VPNs located in “big” markets like the US, the number of web visitors who appear to be American is massively inflated.
* Multi-device internet access has become the norm. Most internet users are now going online via several access points – turning to a PC, laptop, mobile or tablet as location and activity dictate. Only a relatively small proportion use just a PC. In many instances, this means that the same user will be visiting the same site via a combination of devices, a trend which makes it extremely difficult to track an individual’s behavior (particularly if they are not logged in).
* Device sharing is a huge trend, especially in fast-growth markets. Globally, more than half of tablet users in fact share their device with at least one other person. A quarter share their mobile with someone else. One device does not always equal just one person, and yet this is one of the very foundations of passive analytics.
* Online consumers are more privacy-savvy than ever before: significant segments are now using private browsing windows, ad-blockers and anti-tracking tools. And, as our chart below slows, over 40% in most demographic breaks are deleting cookies from their computer on a monthly basis. Many of these actions can seriously compromise traditional tracking techniques.
Individually, any one of these factors can exert a major impact on how we understand online audiences; in combination, they have created The Missing Billion. To see this in action, we need only compare the geographical breakdown of visitors to a site like Facebook in passive vs active datasets. If we look at Alexa’s passive figures, for example, the US is the top market (accounting for 22.2% of all traffic). This is followed by India (8%), Brazil (4.4%), Germany (3.2%) and the United Kingdom (3.2%). Indonesia – well-known to be one of the world’s most active Facebook markets – is absent altogether from Alexa’s top 10.
In GWI’s actively collected data, which passes through extensive and robust accuracy checks and measures, we ask real-life internet users in 32 markets which sites they have been visiting. The US is still the top market in the GWI figures (but at just 15%), with India and China now representing much bigger shares of the total traffic going to the site (China is completely absent from Alexa’s list, but our data shows that large numbers are using VPNs and other tools to bypass the official restrictions placed on the site by the Chinese government). Elsewhere, Indonesia moves up to fifth place, accounting for 6% of Facebook’s visitors.
From site to site – covering everything from social platforms like LinkedIn to search engines like Bing – the same pattern can be found: if we use active, rather than passive, figures then fast-growth markets gain a much bigger presence. Clearly, then, the perception that passively collected data provides accurate and indisputable “facts” needs to be challenged. Passive data is no more than an estimate of one aspect of an audience; no company, brand or agency should be making investment decisions based solely on analytics or passive data – it has to be used in tandem with other data sources. And until this happens, billions of dollars of ad spend will continue to go towards mis-directed messages, just as the out-of-date view that the world is divided into developed vs developing markets will be perpetuated.
To explore these issues in more detail – as well as a range of other commercial implications caused by the Missing Billion – please download your free copy of the report here.