Make a Serious Impression on the Chinese Mobile Market with the Right DSP

Hindsight is a wonderful thing. It’s hard to imagine there was a time before we reached smartphone ubiquity that all the talk was about ‘feature phones’.

Smartphones were so expensive that they would be like a ‘Rolls-Royce’ – affordable to a limited audience, whilst the rest of us made do with devices that were cheaper and less powerful.

Now, more than two-thirds of people around the world have a mobile device. That’s truly astonishing, but it also shows how quickly technology can be adopted when it fulfills a need.

The most effective programmatic campaigns are simple, yet multi-faceted. They mix complicated data sets with myriads of emotional cues, reaching out to consumers in the places they live, on the technology they use, at opportune moments where they might be the most receptive.

Programmatic retargeting is driving demand-side platform (DSP) uptake

Although programmatic has already grabbed the lion’s share of ad budgets, many age-old problems of attribution, tracking and optimization remain. Whilst the core proposition of programmatic is that ads are only served to relevant consumers at the relevant time.

Retargeting is one way to combat those problems. By reminding users of a product, retargeting helps to build brand awareness, bring users back to the product they searched for, and eventually drive conversions. The advantage of using a DSP for this is that the retargeting can happen in more places and across more formats, leading to more creative, engaging campaigns.

Retargeting can be very helpful for app marketers and game publishers – especially eCommerce retailers. With shopping cart abandonment rates as high as 69%, it is a huge pain point for those in mCommerce.

On average, retargeting produces three times more sessions per dollar spent on traditional UA, driving roughly 48% higher click-through-rates. In fact, our research reveals that retargeted dormant users are 173% more likely to spend again.

In a competitive market, DSPs have become a point of difference

But to do that effectively requires a hugely complex technology stack, of which DSPs play a crucial role. DSPs are one of the most intelligent advertising solutions around; they allow users to bid in real-time across a number of ad platforms through a single interface, giving advertisers much greater scale, control, targeting and measurement of their campaigns.

As well as playing a major role in retargeting, and support all the latest ad formats including video, VR, AR, native content and more. Successful DSPs will be the ones which can evolve with and embrace new ad trends and formats.

As more advertising budgets shift to programmatic, whether or not a company has its own DSP becomes a big differentiator. Advertisers and agencies are under additional pressures concerning privacy, transparency and ad fraud, which creates an incentive to work with fewer vendors with broader capabilities.

It’s exactly this approach that has given Facebook and Google their duopoly over much of the market. However, the rapid growth of programmatic advertising in APAC may change this.

China and APAC are the biggest growth area for programmatic

China’s mobile market is only set to get bigger, and the investment in the programmatic market is rapidly catching up on the US, making China the second-largest programmatic market by ad spend.

This is because China is an overwhelmingly mobile-first society, with over 781 million mobile internet users. It accounts for 49% of APAC’s 1.6 billion smartphone users, and has the world’s largest mobile app market, making up 30.8% of total global app revenues in 2018.

According to iResearch, 80% of programmatic in China is on mobile. This year alone programmatic ad buying is set to reach 67 billion RMB, with Dentsu saying digital ad spend on mobile in China will go beyond 75% for the first time.

There has been a big focus on using AI and machine learning in the Chinese programmatic market, due in part to its fractured nature and sheer scale. Because of this, China has become a real innovator when it comes to programmatic advertising, particularly on mobile. Where the West has the App Store and Google Play, China has 400 different android stores and a totally different content and social media landscape.

There are also cultural and language difficulties, for instance, censorship laws and new platforms to learn. Baidu, Alibaba, Tencent and now ByteDance (the creator of TikTok) dominate the programmatic market, accounting for between 80- 90% of the total spend.

So, for Western agencies and advertisers who have been using Google and Facebook all their professional lives, using a DSP is the easiest way to enter the Chinese mobile market and master it. The problem is, very few DSPs have the capability to connect the Western and Eastern markets.

Building a truly global DSP

Building a DSP that can effectively access inventory across both hemispheres requires significant technological know-how. Existing DSP offerings tend to be one way; they’re either inbound platforms from Western advertisers looking for Chinese consumers, or outbound models from China to the West. Very few DSPs have the capability to deliver campaigns seamlessly across both markets.

So, using a DSP that has been built and developed especially to access and advertise within the Chinese mobile market can be invaluable for reaching out to new customers. It gives Western advertisers a foot in both camps, and the tools they need to bypass some of the toughest challenges around when entering what we have seen is a blossoming market.

That’s a crucial difference for NativeX’s new DSP. We have integrated with all of the most important Chinese internet platforms, in addition to a wealth of unique Chinese mobile inventory which has been built up over a number of years. By combining this with our access to established ad networks in the US, Europe and LATAM, we have planted our feet firmly in all key markets.

The greatest growth in programmatic will come from APAC

There is another important strategic reason for building our own DSP – the rate of programmatic growth in APAC. Whilst the US continues to be the single biggest market with $40.6 billion spent on programmatic last year, according to data by Zenith Media the growth of programmatic is slowing in mature markets.

Zenith predicts that by 2020 programmatic in the US will only grow by 17%, compared to 31.5% in China. Whilst there is a long way to go before China or another APAC country supplants the US as the biggest market by value, it’s clear that there is huge untapped demand.

There is no avoiding the opportunity that China and the APAC market presents. China is the single biggest mobile app market, accounting for 40% of global app revenues. Japan and Korea are significant markets in their own right, with particularly strong consumption of mobile games and social apps.

Not only are consumers in APAC avid consumers of content, but the rise of programmatic in the region also opens up a path for growth that we at NativeX see as the natural progression for our company and the industry as a whole.