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The Adoption of Programmatic Buying in China

Home » Blog » The Adoption of Programmatic Buying in China
Posted by Mandy Ang on January 6, 2016
Delynn Ho Smaato APAC

The development of programmatic media buying in China has become very visible in the last few years. Programmatic buying promises Chinese advertisers dramatic improvements in both efficiency and targeting.

In our first installment of our Bite-Sized Mobile Insights, I spoke with Smaato’s APAC Supply Senior Director, Delynn Ho, regarding the state of programmatic buying as well as the related opportunities and challenges in China.

Mandy: I’ve read about the untapped mobile advertising potential in China. This potential includes the rise of programmatic advertising, which is likely going to be a vital piece of China’s digital advertising ecosystem. In your opinion, how mature is the state of programmatic buying in China now?

Delynn Ho: According to China Internet Watch, the total transaction value of mobile programmatic buying will be about US$626.27 million in 2017Despite the huge potential in China, real-time bidding (RTB) is still at its infancy, compared with other developed markets.

Smaato has observed significant uptake of programmatic buying from Chinese players over the past 8 months, both locally and overseas. This is especially so for consumer-oriented business, where data-driven decision is essential to better target consumers by their mobile device, shopping and payment habits. However, RTB could not ramp up as fast as we had hoped, due to the absence of large quantity of high-quality data.

Traditionally, Chinese mobile publishers prefer not to open their media resources for programmatic buying as they prefer more control of the ads and gain higher margins. They have not yet moved their inventory to the RTB ecosystem and are not able to provide full transparency and access to data. This makes it hard for effective buying and to deploy optimization strategies.

Mandy: According to BBC news, the Chinese government is pumping money to build mobile internet infrastructure, and to accelerate the development of high-speed broadband networks at lower cost. Do you think this initiative will pose a good opportunity for the mobile ad industry?

Delynn Ho: Yes, this is crucial as the improvements in speed and delivery will indirectly drive usage for mobile. Where there is demand, there is supply.

Mandy: Mobile advertisers in China are used to the traditional way of media placement, in which they can specify an ad position and schedule for a fixed price.  With programmatic buying, advertisers are not even able to see where their advertisements are displayed.  How can Smaato help these advertisers? 

Delynn Ho: In China, most of the programmatic players offer a one-stop solution (acting as both demand & supply side platform). This can potentially be a conflict of interest, since one is the seller and also a buyer.

Transparency is how Smaato help advertisers. Our inventory gives advertisers the options to choose which app or mobile websites they want to place their ads on. For some brands, ensuring that their ads appear in a brand-safe environment is very important, as any misstep will undermine their branding effort.

Efficiency is also another key factor in programmatic buying. Real-time bidding automates and matches all availability (supply) and requirements (demand). The advantage over traditional media is that, instead of limiting an ad to a specific site, programmatic ads can appear on multiple sites. 

In addition, our Private Marketplace allows advertisers to enjoy higher quality of inventory with better placements and higher impact. Think of private marketplace as a private bazaar for only selected premium publishers and buyers; where buyers get full transparency and buying controls. When launching any mobile campaigns, the ability to target and measure has been key factor to consider, Smaato's Private Marketplace aims to solve these issues. With publishers’ proprietary data and analytics that refine target audience, advertisers get a better picture of their campaigns' effectiveness and measurement.

Given the time consumers spent on mobile devices in premium and relevant environment, the mobile ad industry can only catch up with the user.

Written by Mandy Ang

Mandy Ang is Smaato's Senior Marketing & PR Manager for APAC. She leads all marketing activities such as events and campaigns management for the region.

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