Programmatic Video in China

Like everywhere else in the world, programmatic has also entered the Chinese market. But the digital advertising market in China is fragmented, and RTB is still at the beginning of its journey.

Ad tech provider ReachMax’s ‘Guide to Programmatic Video in China’ summarises the status quo of programmatic at the end of 2015 and gives insight into the reservations of brand advertisers when it comes to programmatic.

Over the past two years, programmatic has seen tremendous growth in China; and performance-based clients, such as ecommerce-players, gaming sites, and companies from the travel sector, have been quick in adapting to the opportunities provided by programmatic. However, big brand advertisers are still doubtful of the new way of buying media and prefer fixed-price solutions where they can determine placement and time of ad delivery; rather than putting their trust in what many perceive as a ‘black box’ solution that apparently leaves no control to the advertisers.

There are four reasons why Chinese brand advertisers are viewing programmatic with suspicion:

1. Programmatic inventory is considered long-tail

Big brand advertisers place huge importance on the quality of media inventory. Rather than have their brand associated with user-generated channels, brands prefer big-name channels where popular TV shows or movies are being shown – opting for expensive brand safety rather than the pricing benefits that programmatic could bring.

2. Pricing is perceived as non-transparent

In the programmatic ecosystem, media buying does not just involve buyer and seller, but also new players such as exchanges or DSPs. While the participants in the programmatic market charge transparent fees, the situation in China is different. Having evolved from ad networks, many DSPs still focus on mark-ups. Brand advertisers are reluctant to give up this pricing transparency if they move on to programmatic.

3. Losing the direct relationship with the publisher – and loss of control

Big brand advertisers in China usually ink annual contracts with publishers in order to procure media. In the programmatic system, procurement is done through DSPs and ad exchanges – making a direct relationship between advertiser and publisher unnecessary. This is perceived as a loss of control over the publisher inventory quality.

4. Share of voice versus targeted advertising

Targeting is seen as a benefit by brand advertisers, but their most important KPI remains share of voice, especially when compared with competitors. Brand advertisers feel they need to balance targeted ads and mass ads in order to maintain their share of voice metric – and resist investing uniquely in programmatic advertising.

The good news is, that not all programmatic advertising is done through RTB, and with the rise of non-RTB models, Chinese advertisers are now beginning to share the benefits of programmatic, despite their reservations. Programmatic guaranteed is a model that is welcomed, particularly by brand advertisers. China boasts only a few dominant video channels in the OTV sector. Publishers are less interested in booking efficiency and more in premium quality content; while Chinese advertisers see the programmatic guaranteed model as a way of marrying more efficient media buying with their desire to keep control over pricing and placement.

And that is where the Chinese programmatic market differs from the West’s approach: While the more mature markets in Europe and the US see automated media booking as an efficient and economic way of spending their advertising budgets and focus on process automation, China is more interested in the efficiency of the programmatic process, i.e. decreasing media overlap, reducing wasteful, off-target ad impressions, and ensuring cross media creative rotation.

According to a recent report by iResearch, non-RTB trading in China is set to catch up with RTB within the next two years – an indication that advertisers are taking first steps in the programmatic market through programmatic guaranateed. That way, non-performance brand advertisers can buy guaranteed quality inventory at fixed prices – and enter the brave new world of programmatic.

The post Programmatic Video in China appeared first on ExchangeWire.com.


Via ExchangeWire

Copenhagen INK

Lars is the owner of Copenhagen INK and is an experienced and passionate marketer with a proven track record of driving business impact through innovative commercial marketing initiatives.

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