Interviews, insight & analysis on digital media & marketing

Programmatic in China is the advertising opportunity of the decade

By Alex Deats, EVP China, MiQ

Marketing to Chinese consumers presents global brands with an unprecedented opportunity. China now has one billion people online, is home to the world’s largest middle class, and Chinese tourists have long been the global leader in international tourism expenditure. The list goes on… 

While the last few years have taken some unexpected turns, more and more global brands have found themselves looking to China for growth. Many things in this world have been uncertain, but China’s growth has been a sure thing.

Programmatic in China is the advertising opportunity of the decade

Looking closer to home, to programmatic – just earlier this year P&G’s Marc Pritchard stated, ‘If you want to see the future of marketing, look to China. It’s where a lot of transformation is happening in terms of our use of data and digital technology in order to drive our business through programmatic’. The world’s largest advertiser is a good gauge for what the future of programmatic holds.

Furthermore, programmatic in China is now a $50 billion a year industry. It has doubled in size since 2017 as advertising budgets follow media consumption trends. The average adult in China spends almost 5 hours per day with digital media, a 64% share of their daily media time, more than any other market in the world. And digital is fast becoming synonymous with programmatic, almost 80% of digital display ad spend in China is programmatic, up from 50% only 4 years ago. So, if it isn’t already, programmatic will soon become the norm for global brands in reaching consumers in China. It’s forecast to grow and grow.

Finding success with programmatic in China is not always straightforward

Most marketers are aware of the programmatic opportunity in China, but for some finding success with programmatic in China can feel illusive or difficult to grasp. As revealed in our Reaching China report – only 38% of marketers at global brands in the UK and US believe their programmatic strategies in China are advanced, with that falling to just 18% among agencies. Something is not right.

There’s a disconnect between decision-making and activation. Two-thirds of global brands make their marketing decisions for China outside of China, more often than not at their headquarters, born from their desire to maintain a harmonious global strategy. Although less than 20% plan and manage their programmatic investment for China from the same place. With few alternatives outside of China, most global brands outsource programmatic activation to third parties in China. 

Moreover, the ecosystem in China is different, the digital advertising players are different and consumers are different. 61% of marketers at global brands identify a lack of local market knowledge as a major roadblock, holding them back from investing more in programmatic. 40% meanwhile, have concerns they can’t access the right partners and local platforms to meet their goals. This can leave many marketers at a crossroads: knowing that programmatic in China is a huge growth opportunity, one they fear missing out on, but in equal measure apprehension of getting it wrong.

Bringing China closer to home

To overcome these barriers, it’s important global brands choose a programmatic partner for China that understands the market. One that offers hands-on-support outside of China and local know-how in China to bridge the gap between decision-making and activation. A safe pair of hands in a complex market where global brands can be brought closer to the market than ever before.

And with the technology giants Google, Amazon and Facebook who govern much of Western programmatic advertising not mainstream in China, instead replaced with unfamiliar local players, global brands need to turn to partners that have the depth of access to the Chinese market. Those who have experience reaching Chinese consumers using the best local inventory, data, ad verification and measurement solutions. And those who make them available from anywhere in the world, in a manner consistent with the global programmatic principles marketers have grown accustomed to.

The few global brands that have already taken this approach are winning.  42% of marketers who currently plan and manage their programmatic investment in China, from either the UK or US intend to increase their investment in the next 24-months. Or rather, just 3% will decrease their investment. Either way you view the data: this approach offers global brands optionality, a different way to reach consumers in China that overcomes many of the challenge’s marketers have faced in the past.

Programmatic success in China doesn’t come overnight, it’s a journey. But with the right partner, global brands can turn China’s huge opportunity into huge programmatic addressability.