20 Jul 2015

Insights into Global Programmatic Advertising

Programmatic advertising brings some big advantages to the international marketer.

Buying your ads programmatically (using software and technology rather than manual input) is much more efficient than the human-input methods, which often involved negotiating with ad space suppliers and their intermediaries. It certainly saves time compared to manually inserting the ads into each channel and platform they are to run on.

We often counsel readers of this blog against uprooting any aspect of their business strategy from their home market and transplanting it, intact, into a new market. Unsurprisingly, advertising is no different. No matter how carefully crafted, advertising approaches need to be reviewed when you move them to a different market.

It’s pretty obvious that your creative assets need to be adjusted for each market in order to reflect the local conditions and your brand proposition in each one. Some major brands have made high profile errors when they tried to transplant their advertising into another market without any adaptation. Others have crudely adapted existing creative and got caught out, such as when Microsoft clumsily removed a black actor from one of its adverts aimed at the less ethnically diverse Polish market.

But adapting your programmatic advertising approach involves much more than just localising the creative effectively. Web users display their online intent differently in different regions, so your advertising will need to adapt to these behaviours in order to optimise your spend.

For example, it’s thought that Chinese web users are much more likely to use transactional queries on search engines than US or European users. In any emerging market you’re more likely to have a higher proportion of users new to the internet than you’d find in established markets.

Outside the first tier of cities, Chinese web users are more likely to have fewer than two years experience using the web. Newer web users are more likely to click on banner ads and less likely to identify sponsored search results as advertising than more experienced ones. This may have implications for your entire advertising strategy.

In the various markets, you’ll also find users are on different platforms and in different channels. What this means is that the ability of your ad to influence them may come at a very different point in their purchase cycle compared to consumers in another market.

Chinese consumers are more likely to seek approval on social media ahead of making a purchase decision, so this channel could be especially influential. Your advertising approach may need to change to reflect the most influential channels in this market.

Advertising as an information source

Using programmatic advertising can help you understand your market better, for example how long the consideration process typically lasts. In an earlier blog post, we examined how some world cultures tend to have a preference for uncertainty avoidance, which tends to affect their social behaviour and aspects of their working life.

One theory put forward by an academic research paper looking into online behaviour and the tourist industry was that Japanese tourists, who come from a culture that prefers to avoid risk, would tend to book further in advance than German ones, who have a lower risk-avoidance profile.

However this was not the case. An advertiser trying to promote the next ski season might be best advised to experiment to find out the optimum time to advertise a holiday in their various markets rather than make assumptions.

Some web users also use multilingual web search. A study of Korean science and engineering students who were looking for technical papers for their studies found a perception that there was more information in English language papers, and that these would also be more professional than Korean language ones.

English was also the students’ chosen search language for finding new ideas, and there was agreement that there was more on offer on the English web than the Korean one for their subject. So in this study, search intent was revealed by the language of the search rather than the particular query used.

Programmatic advertising in China

Emerging markets, particularly Brazil and China, are expected to show significant growth in programmatic advertising in the near future. China is poised to become the world’s biggest ad market, but this huge market offers a very different landscape when it comes to programmatic advertising.

For a start, the programmatic approach to advertising placement still hasn’t quite taken off in China: advertisers seem to be clinging to a greater sense of control that comes with the more traditional methods. As this area of advertising is yet undeveloped, there are still some concerns about access to data. Some major brands also don’t feel they have enough quality control and fear for the integrity of their brand in current programmatic advertising programmes.

Like many areas of the Chinese digital landscape, it’s a fragmented market with many big players. Each major player has its own interface and set of rules that advertisers need to get to grips with. The sheer scale of the market means that you may feel it’s sufficient to engage with a single massive player such as Baidu.

Advertising with Baidu is a way to reach its huge affiliate network and this will push your ads across a wide range of sites, achieving good reach. Or Taobao offers access to an ecommerce audience who are already shopping, so this network and its affiliates offer opportunities to reach an audience who already have one hand on their credit card. Other more familiar platforms such as DoubleClick are also at work in the market.

What’s very clear is that programmatic advertising is on the rise in China, with programmatic ad spend rising several hundred percent in 2014. Spending in this area is expected to at least double both this year and next. But it’s apparent that the existing programmatic capabilities need to improve in terms of sophistication and there are still gaps in provision.

Third party data management systems are few and far between. Advertisers still don’t have full visibility of their data, meaning they can’t purse optimisation strategies that could improve their advertising ROI. A survey from Winterberry Group found third-party data availability was the most important factor for advertisers when it came to entering a new ad market.

The main advantage of programmatic advertising is that it frees up advertisers to focus on optimising their ads both creatively and in terms of placement, rather than focusing on manual insertion and the bureaucracy of negotiating with publishers. Programmatic advertising in China still needs to develop further if it is to really take off but it’s certainly an area that international digital marketers should be watching closely.



 
 

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