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Report on the Programmatic Advertising Ecosystem in China

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Report on the Programmatic Advertising Ecosystem in China THE PROGRAMMATIC ADVERTISING ECOSYSTEM IN CHINA September. 2019 HONG KONG | BEIJING | SHANGHAI www.daxueconsulting.com [email protected] +86 (21) 5386 0380 1 TO ACCESS MORE INFORMATION ON THE KOL ECONOMY IN CHINA, PLEASE CONTACT [email protected] ABOUT © 2019 DAXUE CONSULTING 2 ALL RIGHTS RESERVED Values, principles and vision of daxue consulting 6 Key values emphasized throughout all our projects LOYALTY TO OUR CLIENTS RESPONSIBILITY High performance in our work At all levels at daxue consulting, daxue is creating an and dedication to the project environment where freedom and responsibility go and the client to explore all the together. This environment helps assessing risk early and aspects of the research and getting the most of each research adapt COMPREHENSIVE, SCIENTIFIC, INTERNATIONAL TEAM AND LOGICAL REASONING Working on each project making exchange Transparency of sources and between team members of different backgrounds information support our in order to solve all new challenges balancing conclusions and work intuitive and analytical answers EFFORTS ARE ALWAYS REWARDED EMPOWERMENT THROUGH COMPREHENSIVE MANAGEMENT Accountability on execution and rewarded efforts go together. • Project Leaders and Project Managers evolve in Evidences and arguments are an environment that pushes them to learn and supported with data combined with leverage the best technologies to understand logical and documented demonstration. markets and assess opportunities • Higher level management in daxue consulting focuses on creating a challenging and intellectually stimulating environment for the team members to support clients © 2019 DAXUE CONSULTING 3 ALL RIGHTS RESERVED The strengths of Daxue Consulting 6 crucial competitive advantages 1. Rigorous & creative 2. Responsive daxue consulting is recruiting daxue consulting has a commitment to Rigorous & international talents from China and the answer emails within a day. We are creative Responsive West. result-oriented and do not count our Teams are tailor-made depending on the time to accomplish our tasks. projects Regular reports with our clients in order One client = one senior project manager to make sure we reach the goal expected from our clients. Manage from A to Z 3. We manage from A to Z 4. Actionable recommendations daxue consulting does not outsource its services. We manage our own We care about results and design our assistants and use directly research in order to be operational. technological tools. We are driven by metrics such as Actionable We have a deep understanding on the customer acquisition costs, business recommen- fieldwork and the context within which plan KPIs, P&L optimization. dations data was collected. 5. Innovative 6. Professional Innovative Constant on the look for new research Our methodologies are rigorous and serious, Professional tools and methodologies taking information from the best practice in Our goal is to combine traditional the world of consulting and research. methodologies with the latest tech tools Demanding on the results, detail-oriented, respectful towards our commitments. Corporate presentation. © 2019 DAXUE CONSULTING 4 ALL RIGHTS RESERVED 350+ clients with 450+ projects for the past 7 years Examples of references © 2019 DAXUE CONSULTING 5 ALL RIGHTS RESERVED A recognized expertise on the Chinese market Regularly featured and quoted in global publications Daxue latest quotations in recent publications (click on the logo to be redirected to the articles) © 2019 DAXUE CONSULTING 6 ALL RIGHTS RESERVED Using modern tools to stay ahead of the competition A selection of tools leveraged by Daxue Consulting Search engine & Website / app traffic Data mining / survey Diary study & e-commerce Social listening comparison analysis community research analytics © 2019 DAXUE CONSULTING 7 ALL RIGHTS RESERVED OVERVIEW I. INTRODUCTION II. MARKET OVERVIEW III. PROGRAMMATIC ADVERTISING ECOSYSTEM IV. ADTECH PLATFORMS IN RTB V. CASE STUDY VI. WHAT’S NEXT? © 2019 DAXUE CONSULTING 8 ALL RIGHTS RESERVED INTRODUCTION © 2019 DAXUE CONSULTING 9 ALL RIGHTS RESERVED What is Programmatic Advertising? Programmatic Advertising Programmatic advertising is buying and selling online advertising space automatically, with computers using data to decide which ads to buy and how much to pay for them. Kenneth Kulbok, LinkedIn Programmatic Source: https://www.marketingweek.com/programmatic-advertising/ © 2019 DAXUE CONSULTING 10 ALL RIGHTS RESERVED Programmatic Advertising in China The selling point of programmatic in China is less about automation, and more about precision and results. China’s programmatic scene is packed with hybrid “one stop shops”: Ad Network + DSP, DSP + DMP, Private Exchange + DSP, etc. Along with these hybrids, there is greater conflict of interest for advertisers due to a lack of boundary or transparency across disciplines. Also, with these hybrids, advertisers can quickly experiment with programmatic without heavy investment or understanding in technology. Source: https://www.clickz.com/programmatic-in-china-part-4-open- © 2019 DAXUE CONSULTING exchange/26569/ 11 ALL RIGHTS RESERVED Key development nodes of Programmatic Buying in China • Programmatic buying has experienced the five key development nodes, embracing a huge room for growth in the future. 2012 2013 2014 2015 2016 and afterwards Mobile popularity Intelligence RTB outbreak period PMP leading period Video boom period period acceleration period • Fast developing • Media seeking to • The overall scale of • Rapid rise of mobile • More mature in data period of maximize their video advertising traffic accumulation and programmatic own interests began to grow application buying market • The mobile-end • Combination of the • More advertisers programmatic • Up-and-coming • Transformation advantages of increased their Buying finished the artificial intelligence needs of technology traditional buying budget for video four-year journey of companies and RTB mode programmatic the PC end in one buying year's time • Introduction of Ad exchange to the market Source: http://standardperpetual.com/EN/insight/0714/01.html © 2019 DAXUE CONSULTING 12 ALL RIGHTS RESERVED How Programmatic Advertising works • Programmatic advertising is designed to replace human negotiations with machine learning and AI- optimization. The goal is to increase efficiency and transparency to both the advertiser and the publisher. • In the early days, since the Chinese market had low awareness of programmatic ads, people mistakenly thought that programmatic advertising was simply DSP (Demand side platform) or RTB (Real-time bidding). Now, after 7 years of development, the market has a more clear and in-depth understanding of programmatic ads as well as its relationship with DSP, AdX, RTB and Non-RTB. Advertiser Agency DSP ADX SSP Publisher Audience st Advertising flow 1 party data rd DMP 3 party data supplier Data flow Source: https://zhuanlan.zhihu.com/p/39021981 © 2019 DAXUE CONSULTING 13 ALL RIGHTS RESERVED Programmatic vs. Traditional media buying • Programmatic advertising is faster, more efficient, and cheaper than traditional methods. • Programmatic ads could be helpful for the consumption structure development in China by targeting the ads on right group of people. Traditional Programmatic Manual negotiations & trading Main difference Automated real-time-bidding Marketer negotiates with salespeople in a Algorithm decides where ads will Buying process time consuming and expensive process be shown Predetermined price between advertiser Pricing Real-time-bidding determining price and publisher Scattered data tracked and collected by Transparent real-time reporting to make marketer into an understandable report Reporting informed changes during the campaign Analysis and optimization after the Optimization Optimization in real-time and adjustable campaign is over at anytime Automated with reduced costs and Slow and leaves room for human error Efficiency increased ROI Source: https://www.match2one.com/blog/traditional-vs-programmatic-media- © 2019 DAXUE CONSULTING buying/ 14 ALL RIGHTS RESERVED MARKET OVERVIEW © 2019 DAXUE CONSULTING 15 ALL RIGHTS RESERVED Overview of the industrial chain in China Realizing the second-time growth in buyer’s market • Despite the emergence of issues related to transparency and security, the investment of advertisers on programmatic buying has not been substantially reduced. • Advertisers actively seek to apply private data to advertising optimization and some large advertisers even build their own DSPs. Advertiser • The social, content media and video products of the media icons occupy more of users' time, and more high-quality resources are provided to the Programmatic Buying market through the development of information flow and other advertising products. Publisher • The providers of programmatic creative received more attention from the market and more new independent data service providers entered the market. • Due to the strategy adjustments of Baidu and Ali, BES and TANX are gradually turned to Third-party internal supply and gradually faded out of the market, which is a good opportunity for other platform third-party independent platforms. Source: http://standardperpetual.com/EN/insight/0714/01.html; © 2019 DAXUE CONSULTING https://www.zhihu.com/question/57447518/answer/154283947 16 ALL RIGHTS RESERVED Programmatic Advertising landscape in China Super Platforms DSP & DSPAN (DSP + Ad Network) Ad Exchange & SSP M P C A U O R B N K L S E I U T S Trading Desk & Tech Verification
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