BEIJING/NEW YORK: Programmatic buying is growing fast in China with the amount of display ad budgets spent via demand-side platforms (DSPs) predicted to almost treble to 1.5bn yuan in 2013 before rocketing to 17bn yuan by 2017.
The figures were contained in an excerpt from a report – China DSP Market Trends Report 2013 – by Beijing-based internet market research firm iReserach and based on its own forecasting model, corporate data and interviews.
Will Tao, analysis director at iResearch told MediaPost he was surprised the DSP market was so small in 2012, at just 550m yuan, but he noted the impressive growth rate.
"Many companies have set up their DSPs and have proven that it is valuable," he said. "The market is in its introductory stage and is beginning to grow rapidly."
The 179% increase seen in 2013 will not be sustained in subsequent years but with forecast rises of 116% in 2014, 93% in 2015, 76% in 2016 and 53% in 2017, the sector will play an increasingly important role in China's advertising infrastructure.
"DSPs are the future of advertising, especially to display ads," said Tao, as he observed a levelling off of the growth rate for display ads.
"DSPs could bring new opportunities to the advertising market," he argued, adding, that "with DSPs, we are able to improve ad sales efficiency and attract more advertisers".
The iResearch report also outlined the ways in which DSPs in China differed from other markets, including the handling of data. "Data is quite hard to find in China due to lack of data integration and analysis," said Tao. "DSPs have to collect data by themselves."
For the future, the iResearch report suggested that over half of more than programmatic ad placements through DSPs will come through third-party ad buying by 2017, compared to the current total of 21%.
Programmatic premium buying is also forecast to gain in importance at the expense of real time bidding, with the 2013 ratio of 11:89 turning around to 69:31 by 2017.
Data sourced from MediaPost, iResearch; additional content by Warc staff