What does programmatic advertising look like in China?

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Kevin Ford

November 21st, 2019

The programmatic advertising landscape in China lags behind North America’s, but it’s catching up thanks to the growth in the use of Demand-Side Platforms (DSPs).

In the US alone, programmatic advertising is now the number-one way to buy digital media, with marketers set to spend close to $60 billion on programmatic by the end of the year. That’s expected to grow to approximately $81 billion by 2021.

PubMatic’s recent Quarterly Mobile Index report shows that programmatic is also taking hold across APAC. Q3 2019 saw mobile ad spend in the region rise 25%, with mobile header bidding spend increasing by 71% and volume rising by 35% when compared against the last quarter.

 

Credit: PubMatic

But despite these encouraging figures, Zenith’s Programmatic Marketing Forecasts report says that China is only set to spend 31.5% on programmatic ads this year compared to the US’s 83%. RMB 67 billion of programmatic purchased ad space is expected in 2019, up from RMB 26.3 billion in 2017.

The market is still maturing in China, though, and it’s growing quickly. DSPs are fuelling that growth, as they are a way to connect multiple ad networks and exchanges and automate the buying and placement of ads. In China, this has had the effect of helping advertisers into better target local consumers, and also as a way for brands and companies outside of China to make inroads into this huge market.

A lack of maturity in the Chinese market is just one of the reasons why using a DSP is so essential. (We’ve previously written about what a DSP is and why using one is critical to reaching out to China’s mobile-first society – read all about it here).

DSPs are also helping to provide greater transparency and data to advertisers, as well as acting as a bulwark against ad fraud. Despite major efforts to combat ever-more sophisticated forms of mobile and desktop ad fraud, it remains a significant problem – especially China, where its estimated up to 83% of global ad fraud currently originates.

 

What DSPs are available to use in China?

Driving China’s programmatic ad landscape are its BAT tech companies – Baidu, Alibaba, and Tencent. Alibaba alone accounts for around 60% of all programmatic advertising – all three companies combined take up approximately 90% of the market. That monopoly doesn’t look like breaking any time soon, although ByteDance, the company behind TikTok (known as Douyin in China) has grown rapidly in recent years and is almost as influential as the established giants.

 

Credit: PubMatic

Each BAT company has its own DSP, with each company providing different ways to reach out to consumers and users of its services through different formats such as video ads, banner placements and more.

Although the BAT DSPs are the biggest in China, they aren’t the be-all and end-all for marketers interested in exploring China’s programmatic potential. Other major Chinese DSP providers include:

 

iPinYou

iPinYou is China’s largest dedicated DSP. The software and features found in iPinYou provide a lot of fantastic options for advertisers and have helped it to become one of the leading platforms for audience-based programmatic advertising.

Features included in iPinYou are best-in-class real-time bidding solutions and algorithms, alongside patented audience profiling technology and a proprietary cloud computing platform. Over 200 brands across the IT sector, financial services, auto, travel industry and more have used iPinYou.

 

Yoyi

Yoyi is a favorite DSP for both advertisers and media publishers thanks to its targeted online advertising solutions. Yoyi provides impression- and performance-based ads. Its popularity stems from its media network, connecting users to China’s top publishers.

The Yoyi DSP has three offerings; YO-Focus(TM), YO-Crazy(TM), and YO-Target(TM). Each one allows advertisers to reach out to audiences based on variables such as time, location, demographics, behavior and more through China’s most popular portals and vertical sites.

 

hdtMEDIA

HDT Holdings Group’s DSP is an incredibly diverse piece of software and has no less than six targeted ad platforms for marketers to make use of.

hdtMEDIA is digital media-centric; hdtMOBILE is its mobile media platform; hdtDXP is used for programmatic ads; hdtSSP acts as a premium publishers services platform; hdtDMP revolves around data management, and H2 is a mobile ad exchange platform.

 

Adsame

Adsame takes a full agency approach and offers users advertising solutions, data insight, and publishing software. Their mission statement revolves around efficiency and offers that through its two platforms.

Adsame offers a product platform and a media platform; the former provides data and insights while the latter helps users access advertising networks and promote themselves through portals, vertical, SNS, and video.

 

MV Ad

MV Ad also offers something of an agency approach to advertisers and specializes in efficient targeted online advertising solutions. The MV Ad platform has won many fans in China thanks to its resource integration, innovation and the professionalism provided by its online advertising team.

 

NativeX DSP

NativeX is a full-service ad agency offering brands and apps with a variety of mobile advertising solutions. One of these solutions is its comprehensive demand-side platform and data management platform. Both work in synchronicity to help media buyers optimize their KPIs – either autonomously through machine learning or manually. Premium ad inventory is also extremely important as it draws on both western and Chinese traffic to benefit global advertisers across a variety of media channels. 

 

Should a western brand use a Chinese DSP?

With 98% of the approximately 850 million smartphone users in China browsing the internet with their devices, there are some amazing opportunities out there for western brands to get in front of a market experiencing high growth with the right DSP.

And those DSP providers are working extremely hard to provide better standards for advertisers. Though there are problems surrounding transparency and a lack of industry standards, some brilliant minds are working extremely hard to solve those problems through their technology, such as iPinYou’s founder and CEO Grace Huang.

Credit: Zenith

They’re not the only challenges that western companies face, though. They must overcome other key issues such as language and culture barriers, connecting to the right vendors and platforms, learning the laws and regulations that are necessary to serve ads to the populace, and many other hurdles.

All issues we can help you overcome with our NativeX DSP, which provides a truly global approach and allows western companies to connect to Chinese mobile consumers in real-time and through a single platform.

NativeX also prevents fraud and provides total transparency, guaranteeing brands safety and allowing you to grow and serve creative digital advertisements to the Chinese market on apps and sites from BAT companies, ByteDance, and many other verticals. Contact our team to find out more about how NativeX can help you grow your brand in China through creative programmatic advertising.

 

Kevin Ford

2019-11-21

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