Day: December 17, 2024

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AdTech

Overview of China’s Programmatic Advertising Ecosystem

Overview of China's Programmatic Advertising Ecosystem

As globalization continues to deepen, international brands are increasingly turning their attention to the vast Chinese market. With the largest number of internet users in the world and a digital advertising market size that ranks at the forefront globally, programmatic advertising, as an essential means of digital marketing, is gaining increasing attention. This article will delve into the development history of China’s programmatic advertising ecosystem, analyze its main players and functions, compare it with the foreign ecosystem, and finally provide strategic recommendations for foreign advertisers entering the Chinese market.

Development History of China’s Programmatic Advertising

Since being hailed as the “Year of Programmatic” in 2012, China’s programmatic advertising has experienced a period of enthusiastic capital pursuit, an outbreak period, and an adjustment period that has attracted industry-wide attention. With advertisers focusing on issues such as traffic fraud and advertising transparency, the industry has gone through a period of calm reflection during the adjustment period to the current refined transformation. The Chinese programmatic advertising market has undergone rapid development and transformation.

Embryonic Stage (2008-2011)

During this period, programmatic advertising began to sprout in China, with many companies starting to try this emerging marketing method. In 2011, Alimama launched the advertising trading platform Tanx, marking the preliminary exploration of China’s programmatic advertising.

Rapid Development Period (2012-2013)

The year 2012 is regarded as the inaugural year for programmatic advertising in China, with a plethora of companies launching DSP products. Google’s advertising trading platform also officially went live in China that year. In the following year, giants such as Tencent, Sina, and Baidu joined the programmatic advertising market, propelling the industry’s rapid development.

Eruption Period (2014-2016)

Driven by capital, the programmatic buying market entered an explosive period. Statistics show that during this time, more than a hundred programmatic buying platforms emerged. However, the market also faced issues like fake traffic, brand safety, and opacity, which gradually attracted industry introspection.

Shuffling Adjustment Period (2017 to Present)

As the market matures and advertisers demand higher transparency, the programmatic advertising market has entered a period of shuffling and adjustment. Companies with outstanding technology, resources, and reputation have begun to stand out, while other platforms face the pressure of being eliminated. Advertisers have started to focus more on the quality of advertising delivery rather than the quantity, with a preference for precise delivery that brings verifiable value.

Photo by Markus Spiske on Unsplash

Main Changes and Trends in China’s Programmatic Advertising Ecosystem

As market demands evolve, advertisers increasingly prefer precise delivery and performance measurement, driving the development of programmatic buying technologies, such as Real-Time Bidding (RTB) and Direct Programmatic Buying. In addition, China’s unique market environment and policy orientation are also shaping the unique development path of the programmatic advertising ecosystem, with the following trends emerging:

  • Increased demand for vertical platform advertising delivery: Advertisers are paying more and more attention to the quality of advertising delivery, with a preference for precise delivery that brings verifiable value.
  • The rise of Connected TV (CTV): With the increase of CTV users, programmatic TV advertising has become a new growth driver in the industry.
  • Improvement of KOL programmatic advertising delivery: Programmatic technology helps advertisers more accurately select KOLs for promotion, achieving systematic and programmatic KOL management.
  • Cross-platform and cross-device advertising delivery: With the advent of the all-screen era, brands have higher requirements for the scenario of digital marketing, and cross-device programmatic advertising delivery will receive more attention.
  • Enhancement of transparency and industry standards: Advertisers are increasingly concerned about industry transparency, and industry norms and standards are being strengthened, with third-party monitoring agencies and high-standard industry norms playing an important role.
  • Focus on brand safety and advertising effectiveness: Advertisers’ focus has shifted from  extensive “quantity” to refined “quality,” with brand safety and advertising effectiveness becoming key topics.
  • Integration of advertising transaction data: To improve the conversion rate of advertising and consumer experience, the integration of data generated in advertising transactions, more efficiently positioning the right target audience and the right delivery opportunity, has become the focus of the next wave of digital transformation.

Main Players in China’s Programmatic Advertising and Brief Introduction

China’s programmatic advertising ecosystem is a diversified and highly integrated system, including Demand-Side Platforms (DSPs), Supply-Side Platforms (SSPs), Advertising Exchanges, Data Management Platforms (DMPs), Programmatic Creative Platforms, Monitoring and Analytics Tools, Programmatic TV, and Programmatic Digital Out-of-Home (pDOOH), among other roles. These platforms and tools, through efficient technical means, have achieved automated purchasing, precise delivery, and data recovery of advertising resources, providing advertisers with one-stop services from strategy formulation to performance evaluation, promoting the digital transformation of the entire advertising industry.

  • DSP (Demand-Side Platform): A platform that helps advertisers or ad agencies to automatically lock in target traffic, purchase advertising space, control budgets, and optimize strategies. YOYI Tech’s Plus platform, covering high-quality advertising resources from mainstream Chinese media, can help advertisers achieve their advertising goals efficiently and economically.
  • Ad Exchange & SSP: Advertising trading platforms and supply-side platforms are responsible for the buying and selling of advertising inventory. For example, HUAWEI Ads, as a newly included platform, covers more than 730 million monthly active users.
  • Trading Desk: A procurement trading platform and technology, providing one-stop automated advertising platform services. YOYI Tech’s OneDesk is a representative TD that integrates various high-quality media and advertising resources.
  • Data Supplier & Data Management: Data provision and management platforms support advertisers in more accurately targeting their audience.
  • Programmatic TV: Programmatic television advertising provides opportunities for the programmatic purchase of television and outdoor advertising.
  • Measurement & Analytics: Monitoring and analytical tools help advertisers evaluate the effectiveness of their advertising.
  • pDOOH: Programmatic outdoor advertising, which leverages technology to automate the placement of outdoor advertising. For example, Asiaray (Ya Shi Wei) and DiDi are newly included platforms.

Photo by Google DeepMind on Unsplash

Differences and Similarities between China’s and Foreign Programmatic Advertising Ecosystems

Compared to foreign ecosystems, China’s programmatic advertising ecosystem also faces challenges in data privacy protection and user choice rights. With the implementation of “privacy protection” mechanisms, the space freely available for the audience identification mechanisms that programmatic advertising relies on to operate is increasingly narrowing. There are some significant differences between China’s programmatic advertising ecosystem and that of foreign countries, as follows:

  • Market Size and Maturity: Although China’s programmatic advertising market is large, it is still in a stage of continuous development and adjustment compared to the more mature markets of Europe and the United States.
  • Technology and Platform Development: China’s programmatic advertising technology ecosystem map shows that the market is adapting to changes in privacy protection mechanisms and audience identification mechanisms, such as OAID replacing IMEI, and IDFA facing more refined authorization for use.
  • Influence of Super Platforms: In China’s programmatic advertising ecosystem, large technology companies like HUAWEI Ads occupy an important position through their closed-loop ecosystem products, which is different from the situation abroad where giants like Facebook and Google dominate and work with many small and medium-sized platforms.
  • Advertising Forms and Innovation: China’s programmatic advertising is exploring new forms such as Programmatic TV and pDOOH, while the development of these fields in foreign markets may be more mature.

Considerations for Foreign Advertisers Entering the Chinese Advertising Market

  • Understand the Market Environment: China’s advertising market has a unique cultural and regulatory environment. Foreign advertisers need to deeply understand these characteristics. An in-depth understanding of Chinese market characteristics and consumer behavior is key to success. For example, Chinese consumers’ dependence on mobile devices is much higher than in other countries, which has an important impact on advertising delivery strategies.
  • Data Compliance: With the strengthening of data privacy protection, advertisers must ensure that their data collection and use comply with Chinese laws and regulations. Strictly comply with Chinese laws and regulations, especially in terms of data protection and privacy. For example, understand and comply with the relevant requirements of the “Cybersecurity Law” and the “Personal Information Protection Law.”
  • Choice of Partners: Choosing experienced and resourceful local partners can help foreign advertisers adapt to the market environment more quickly and achieve effective market penetration.
  • Technical Adaptability: Utilize local Chinese technology platforms and services, such as DSPs and Ad Exchanges, to achieve more precise advertising delivery.
  • Cultural Sensitivity and Localization Strategy: Advertising content needs to consider the sensitivity of Chinese culture to avoid cultural conflicts or misunderstandings. Develop advertising content and marketing strategies that conform to Chinese cultural and social values. For example, respecting Chinese traditional festivals and customs can improve the acceptance and effectiveness of advertising.

Photo by Markus Spiske on Unsplash

The development of China’s programmatic advertising has been diverse and dynamically changing, from initial exploration to current refined operations, with the market continuously maturing and improving. The Chinese programmatic advertising market offers great opportunities for foreign advertisers but also comes with challenges. By deeply understanding the market environment, complying with laws and regulations, formulating localization strategies, and choosing the right partners and technology platforms, foreign advertisers can succeed in this vibrant market.

Categories
Advertising Ecosystem

Overview of China’s Advertising Verification Platforms

With the robust growth of China’s economy and the acceleration of digital transformation, China’s advertising market has become one of the most dynamic advertising ecosystems globally. However, the rapid development of the advertising industry has also brought many challenges, such as false traffic, brand safety issues, and data transparency. These issues not only harm the interests of advertisers but also impact the consumer experience. Therefore, advertising verification platforms have emerged in China, becoming key to ensuring the authenticity, effectiveness, and safety of advertising placements.

I. Classification of China’s Advertising Verification Platforms

Understanding the different types of advertising verification platforms helps advertisers better grasp their role in the market and strengthen their understanding of the ecosystem of China’s advertising market. Advertising verification platforms can be divided into the following types based on their main functions and services:

  • Advertiser Verification Platforms: These platforms focus on verifying the identity, qualifications, and creditworthiness of advertisers to ensure their legality and integrity, preventing false advertising and fraudulent activities.
  • Advertising Content Verification Platforms: These platforms are mainly used to verify the compliance and accuracy of advertising content, including whether the advertising involves false propaganda, misleading statements, or infringement.
  • Traffic Verification Platforms: Traffic verification platforms focus on verifying the quality of traffic for advertising placements, ensuring that the traffic obtained by advertisers is genuine and effective, preventing traffic fraud and volume brushing behavior.
  • Data Verification Platforms: These platforms provide data verification services to ensure the authenticity and accuracy of the data used by advertisers and advertising platforms, such as audience data and click-through rate data.
  • Programmatic Advertising Verification Platforms: These platforms combine programmatic advertising purchase technology to provide automated advertising verification services, helping advertisers and advertising platforms monitor and manage advertising activities in real time.
  • Anti-Fraud Platforms: Focused on preventing advertising fraud, including click fraud, installation fraud, etc., identifying and blocking fraudulent traffic through technical means.
  • Brand Safety Verification Platforms: These platforms focus on protecting the brand safety of advertisers to avoid ads appearing in inappropriate content or environments, such as bad content, pirated content, etc.

Photo by Samu Lopez on Unsplash

II. Examples of China’s Advertising Verification Platforms

Next, let’s look at some well-known advertising verification platforms in the Chinese market to intuitively feel the role and influence of these platforms.

  • Alibaba’s Diamond Stand: Mainly used for verifying the effectiveness of advertising on the Taobao and Tmall platforms, ensuring the effectiveness and transparency of advertising placements.
  • Baidu’s Baiqingteng: Provides monitoring and verification services for advertising placements, helping advertisers evaluate the effectiveness of advertising placements and optimize advertising strategies.
  • Tencent’s Advertising Insights: Tencent’s advertising verification platform, is used to verify data such as advertising exposure, clicks, and conversions, enhancing the advertising placement effect for advertisers.
  • Weibo Super Manager: An advertising management and performance monitoring platform launched by Weibo, helping advertisers monitor the effectiveness of advertising placements and conduct data analysis.
  • JD Jingzhuntong: It has successfully passed the Traffic Anti-Fraud Project Evaluation CAF certificate issued by TAG (Trustworthy Accountability Group, a U.S. advertising self-regulatory organization), becoming one of the first comprehensive advertising platforms in China to obtain this certification.

These platforms help advertisers improve the transparency and effectiveness of advertising placements by providing professional verification services.

III. Features of China’s Advertising Verification Platforms

China’s advertising verification platforms have the following features in terms of functionality and characteristics:

  • Data Transparency and Strong Monitoring Capabilities: These platforms can usually provide detailed data reports, including key indicators such as advertising exposure, clicks, conversion rates, etc., helping advertisers fully understand the effectiveness of advertising.
  • Multi-platform Coverage: For different advertising placement platforms (such as Alibaba, Baidu, Tencent, Weibo, etc.), these platforms provide corresponding verification services with a wide coverage range.
  • High Precision: Through big data analysis and artificial intelligence technology, these platforms can accurately evaluate the effectiveness of advertising, helping advertisers accurately optimize advertising strategies.
  • Real-time Monitoring and Feedback: Able to monitor the effectiveness of advertising placements in real-time, providing timely feedback on data and analysis results, helping advertisers adjust advertising strategies and improve the effectiveness of advertising placements.
  • Compliance and Security: These platforms can usually ensure the compliance of advertising placements, protect user privacy and data security, and comply with relevant laws and regulations.

Photo by Jakub Żerdzicki on Unsplash

IV. The Operation Logic of China’s Advertising Verification

(1) Advertising Content Review

  • Keyword Filtering: Advertising verification platforms filter keywords in advertising content to exclude illegal, illegal, or sensitive information.
  • Image Recognition: Using image recognition technology, scan and analyze images in advertisements to identify any false or misleading content.
  • Text Analysis: Through natural language processing technology, conduct an in-depth analysis of advertising copy to ensure its content is true, accurate, and complies with relevant laws, regulations, and ethical standards.

(2) Traffic Anti-Fraud

  • Behavior Analysis: Advertising verification platforms analyze user clicks, browsing, and other behavioral data to identify abnormal traffic, such as clickbots, malicious brushing, and other fraudulent activities.
  • Device Recognition: Use technical means such as device fingerprinting and IP addresses to identify abnormal access behavior under the same device or IP address.
  • Data Cross-Verification: Cooperate with third-party data providers to cross-verify advertising data to ensure the authenticity of advertising displays and clicks.

(3) Advertising Effectiveness Evaluation

  • Click-Through Rate Monitoring: Real-time monitoring of the click-through rate of advertisements, analyzing whether user clicks are genuine and effective.
  • Conversion Rate Analysis: Track user behavior after clicking on advertisements, such as purchases, registrations, etc., to evaluate the conversion effect of advertisements.
  • ROI Calculation: Calculate the return on investment (ROI) of advertisements based on advertising input and output data, providing decision support for advertisers.

(4) Compliance with Laws and Regulations

  • Compliance Review: Advertising verification platforms conduct compliance reviews of advertising content to ensure that it complies with relevant laws, regulations, and advertising industry standards.
  • Privacy Protection: Strictly comply with data protection laws and regulations during the verification process to ensure the privacy and data security of users.

(5) Technological Innovation and Application

  • AI Technology: The utilization of artificial intelligence technologies, including machine learning and deep learning, enhances the precision and efficiency of ad verification processes.
  • Big Data Analysis: Leveraging big data analytics to deeply mine and scrutinize advertising data, providing advertisers with more accurate ad placement recommendations.

Photo by Google DeepMind on Unsplash

(6) Continuous Optimization and Iteration

  • Feedback Mechanism: Establishing a feedback system to gather the suggestions and advice of advertisers and users, to continuously refine the functionality and services of the ad verification platform.
  • Technological Updates: Staying abreast of industry trends and technological advancements to ensure timely updates and optimization of the technological infrastructure and algorithmic models of the ad verification platform.

Taking JD Jingzhuntong as an example, the platform has not only provided comprehensive advertising services but has also achieved notable success in ad verification. It has successfully passed the certification for the Certified Against Fraud (CAF) project issued by TAG (Trustworthy Accountability Group), an American advertising self-regulatory organization, becoming one of the first integrated advertising platforms in China to receive this certification. This signifies that JD Jingzhun Pass’s capabilities in preventing traffic fraud and illegal advertising activities in the digital advertising sector have gained recognition from an international authoritative body.

Chinese ad verification platforms play a crucial role in ensuring the authenticity of advertisements and improving their effectiveness. As technology continues to advance and market demands grow, these platforms will keep evolving and innovating, offering advertisers more comprehensive and precise services. Advertisers need to select the most suitable verification platform based on their specific needs and market changes to maximize the value of their ad placements.

Source of featured image: Photo by Logan Voss on Unsplash

Categories
AdTech

Introduction to China’s Advertising DMP

A DMP (Data Management Platform) can provide audience targeting for advertising campaigns through demographic labeling and establish user profiles based on campaign data. It manages these labels and facilitates retargeting, thereby helping advertisers or agencies review and optimize their advertising strategies more efficiently.

Classification of DMPs

Based on the ownership of the DMP platform, DMPs are categorized into first-party, second-party, and third-party DMPs.

  • First-Party DMP: Refers to an internal DMP built by large advertisers themselves or with the help of external technology providers. It is used for analyzing and managing user data, providing decision support and user data support for marketing processes and is widely used in industries such as e-commerce, gaming, and travel.
  • Second-Party DMP: Refers to a DMP built by demand-side service providers (usually DSPs) to assist advertisers in better campaign deployment, enhancing effectiveness while increasing the volume of placements, indirectly boosting the advertiser’s spending on the demand-side platform.
  • Third-Party DMP: Refers to a DMP primarily engaged in data transactions, offering services such as data exchange and sales to demand-side entities. It typically requires integration with DSPs before being applied to advertising campaigns. If it involves PC data, a cookie mapping process is also necessary between the DSP and DMP.

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Classification and Enumeration of Data Suppliers

There are numerous third-party data providers in the market. Here are some of the larger ones:

  • BAT: Alibaba’s e-commerce data, Tencent’s social data, and Baidu’s search data. Generally, these data sources have relatively high barriers to access.
  • Companies with a wealth of valuable offline data: It’s important to highlight offline data, as we live in the real world where online behavior may not truly reflect our intentions. For instance, a user browsing cars online may not necessarily intend to purchase, but a visit to a car dealership suggests a high likelihood of intent. Typical representatives include companies like Zhanhui Zongying, which holds real user activity data from airports, high-speed railways, and the automotive industry chain, and UnionPay Smart, which has offline transaction data from POS machines. Recently, these data-rich companies have been activating data monetization models, offering advertisers superior programmatic advertising solutions through self-built DSPs and unique DMPs.
  • Third-party monitoring companies also hold a large amount of advertising campaign data due to the nature of their business. Typical representatives include companies like MiaoZhen and AdMaster; mobile representatives include TalkingData and Umeng.
  • Media companies also provide demographic data services (such as gender, age, and interests), but the coverage of a single media source is inherently limited.
  • Traditional CRM technology service companies are also present, but integrating CRM data with online data has always been a challenging issue.
  • DSP companies also possess some data, primarily sourced from advertising traffic. Advertising exchanges provide user and media information data such as the current media, position, and IP of the user’s advertisement to help DSPs make better bidding decisions based on user behavior. As a result, DSPs have accumulated a wealth of data based on this advertising traffic and their past advertising performance data. However, since this data is carried within the advertising traffic and much of the RTB traffic is “remnant traffic,” it has a certain degree of fragmentation and may not reflect the entirety of a user’s online behavior. Especially on mobile ADX, unlike PCs, it cannot provide the URL of each ad content page, only the App in which the user’s ad is displayed, and the latitude and longitude obtained is merely the user’s offline location when the App is opened to display the ad, which may not reflect the user’s entire movement trajectory. Therefore, such fragmented data makes it difficult to analyze and label user behavior as continuously and precisely as on the PC side.

Photo by Joshua Sortino on Unsplash

Basic Functionality and Core Process of Data Sample Learning

The most fundamental function of a DMP is to collect various online and offline data through different means and channels. The types of data can be diverse, not limited to advertising campaign data but also including CRM, surveys, third-party, and other data sources. Advertisers focus on different aspects of data from different sources:

  • For First-Party DMP data, advertisers are more concerned with the analytical capabilities of first-party data, such as consumer behavior analysis on official websites and offline, and media attribution analysis.
  • For Second-Party DMP data, advertisers are more concerned with the application of second-party data in advertising campaigns and the impact of media content and categorization on advertising efficiency.
  • For Third-Party DMP data, advertisers focus more on the efficient output methods and connectivity and effectiveness of the data.

Photo by Firmbee.com on Unsplash

The basic functionality of a DMP mainly revolves around various stages such as data collection, cleansing, integration, management, analysis, and application.

Data collection, cleansing, integration, and management focus on aspects such as timeliness, accuracy, reliability, stability, scalability, and automation of data processing.

Data analysis and application focus on the mining of “people” and “patterns” within the data. Creating audience profiles, classifying and tagging data, and providing guidance for marketing and decision-making are key.

Source of featured image: Photo by Jakub Żerdzicki on Unsplash

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