Programmatic advertising has become an embedded advertising principle and method in many parts of North America and Europe.
Reports from eMarketer predict that 83% of display ads in the US will be bought programmatically by 2017. While programmatic continues to make a distinct mark on western ad spend, it still remains a budding concept in the Asia-Pacific (APAC) region.
These are some reasons APAC is primed for programmatic advertising, and why brand marketers and advertisers in this region should board the programmatic train.
Hurdles for Marketers
Although APAC is a huge market for programmatic ad buying, some drawbacks include the simple lack of understanding of the concept by many marketers, agencies, and companies in the region.
Because programmatic is still in its infancy, very few players widely discuss its benefits. The fact that programmatic, in itself, is a complex matter—the acronyms and convoluted terms withstanding—makes it all the more difficult to popularize.
Add to this the fragmented nature of the APAC market, and there’s truly a challenge. Doing business in Asia differs across countries and cultures, as in the case of Japan, Malaysia, or China. The key is to know which market to focus on and expand from there.
Finally, audience data is rather sparse across the region’s markets, and people with the skills and in-depth knowledge in programmatic advertising and big data are difficult to find.
The Next Frontier
While programmatic advertising has a slow uptake in the region, multiple sources have expected its growth.
In an analysis by EConsultancy, programmatic advertising will take 33% of the advertising industry by 2018, and video ads sold programmatically will take up to 15-50% by the end of the year.
Some reasons for these predictions hinge on the fact that APAC is a growing market. Not only it is a population-dense continent, but there is massive mobile usage in many countries particularly the Philippines, Indonesia, and South Korea. This continues to increase fast, even in countries where mobile is not yet widespread. APAC saw the fastest growth in mobile inventory in 2014 that added up to 192%. Mobile demand has also increased 329%.
This presents programmatic marketers great opportunities. Mobile usage, majority of the time, is on mobile chat and messaging applications. Some examples are WeChat in China or QQ in Japan. These are a rich platform for programmatic ads.
Mobile gaming is another rich platform. Research has shown that APAC is the world’s largest mobile gaming market with $6 billion in revenues. This number continues to grow by 25% annually.
Finally, the increase in internet usage makes APAC a prime market for programmatic advertising. Recent statistics show that over a third of the APAC population now use the internet.
Social media activities also continue to rise: active social media accounts on APAC countries’ popular social media sites increased by more than 47 million.
The massive growth both in mobile and internet use makes for a great playing field for all things programmatic, and although there are challenges that marketers need to overcome, it is only a matter of time before programmatic takes full swing in the region.
Photo: The Hong Kong Harbor; Credit: CUHK Business School