Programmatic advertising is big in the west, dominated by the likes of Google’s DoubleClick Ad Exchange – a big digital marketplace where advertisers can purchase advertising space. But in China, programmatic advertising is quite different again – and this is something that China digital advertisers and marketers need to be aware of.

What is programmatic advertising anyway?

Basically, it is the use of software to automate the process of online ad buying and selling. This means that instead of negotiating with a human salesperson for ad prices and placements, you make use of technology to decide for you where and when your online ads are placed, based on pre-set goals and targets.

Programmatic advertising can be done either through Real-Time Bidding (RTB) on open exchanges or private marketplaces, or by the direct purchase of guaranteed or fixed-rate deals.

The benefits

Programmatic advertising makes the decision-making process of ad buying much faster and easier. By combining data from various sources with automation, advertisers can achieve greater accuracy in audience targeting.

It also places the emphasis on who sees your ads, rather than where they are placed. In other words, you can buy from a range of sites, rather than negotiating with specific publishers. It also has some inbuilt flexibility in that it starts small and self-adjusts according to performance.  

Potential pitfalls

The potential for fraud does exist with automated advertising. However, it may be possible to reduce the risk by ‘teaching’ the technology where the low-quality leads are so they can be weeded out.

What’s different in China?

In China, programmatic advertising is relatively new and evolving. There are a few other differences as well, such as:

  • Major players: the marketplace is dominated by the big players of Baidu, Alibaba and Tencent, known collectively as BAT. Examples include Baidu’s Exchange Services, Taobao’s TANX and Tencent’s Tango. There are also more private than open ad exchanges in China.
  • Data: obtaining data can be more difficult, as the big players are not always too keen on sharing it.
  • Market complexities: the online ad market is more fragmented and there is a lack of standardisation when it comes to advert sizes and formats. China also has a relatively complex media environment.

Cultural, market and language differences can also make it difficult to negotiate the advertising and marketing landscape, and quite a few big successful players in the west have failed to thrive in China.

Tips for automated ad buying in China

  • Get expert assistance from a bilingual local partner or trusted adviser, who knows and understands the complexities of the advertising landscape in China.
  • Start with a small budget and build it up gradually after testing what works and what doesn’t.
  • Give preference to larger reputable market leaders, such as the BAT-owned companies.
  • Make sure advertising inventory is third-party validated prior to purchase, to reduce the risk of bias.
  • Always track your results. This way you can optimise better and improve your decision-making.

Need some expert help?

Programmatic advertising in China can be complex. If you need some help getting started with this or any other aspect of digital marketing in China, get in contact with our bilingual team.

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