In 2014, mobile ad spending in China rose 330.0% year over year to $8.21 billion, propelled by the largest single-year gain in mobile internet ad spending of any country tracked by eMarketer.
According to a new eMarketer report, “China Mobile Ad Spending: 2015 Forecast and Trends,” mobile will become China’s dominant digital advertising channel in less than two years and be used for nearly half of all advertising in the country by the end of the decade. In other words, mobile still has a vast amount of untapped potential. That potential includes the rise of programmatic advertising, which is likely to become an important part of the country’s digital advertising ecosystem.
Mobile programmatic display advertising spending in China rose more than 400% in 2014 to reach RMB390.3 million ($63.5 million), according to iResearch Consulting Group. This was expected to more than double in both 2015 and 2016, before topping RMB3.83 billion ($623.2 million) in 2017.
These somewhat conservative figures could be a sign of the relative immaturity of China’s programmatic ad market, which may lack the sophistication needed to serve specialized media such as video. Real-time bidding (RTB) accounted for three-quarters of the overall mobile programmatic ad picture in 2014, according to iResearch. However, it will slowly begin to cede share to non-RTB programmatic spending starting this year.
Others have a more optimistic take on how programmatic will develop going forward. They include Andy Fan, founder and chief editor of RTBChina, which reports on China’s RTB ad ecosystem.
“There are about 250,000 advertising queries per second in China, and mobile advertising currently takes up around one-fifth of the total digital advertising,” Fan said. “I predict that programmatic advertising display on mobile platforms will be equal to that of the overall online platform in about two years.”
For Fan’s prediction to come to pass, a number of significant obstacles will have to be overcome. China’s programmatic ecosystem remains incomplete. There are few third-party data management platforms, significant transparency issues and a highly fragmented market in which exchanges interact with a plethora of often specialized demand- and supply-side platforms.
The programmatic ecosystem in China has a long way to go to catch up to the levels of maturity seen in the US and Europe. But it’s probably only a matter of time before the industry consolidates. This process, in conjunction with advances in user profiling and targeting technology, is likely to bring a treasure trove of mobile advertising opportunities across ecommerce, online-to-offline marketing, geolocation targeting, advanced search, rich media and video.