Emerging Asian markets show fastest programmatic growth, total spend of over $500m
Malaysia will be the No 1 market for RTB this year with US$12 million spend
EMERGING markets in Asia show the fastest programmatic growth in 2014 with a total spend of over US$500 million, up 73% from 2013, according to a new study by Magna Global.
The strategic global media unit of IPG Mediabrands recently released its The International State of Programmatic report, which features research about the state of the programmatic industry in 24 markets across the globe.
Programmatic buying is the process of executing media buys in an automated fashion through digital platforms such as: exchanges, trading desks, and demand-side platforms (DSPs).
This method replaces the traditional use of manual RFPs (request for proposals), negotiations and insertion orders to purchase digital media.
Prashant Kumar (pic), president of IPG Mediabrands, World Markets Asia said that with traditional media, the broadcasting and the media buying was not designed for high levels of nuance when it comes to audience targeting.
“Programmatic is the new way – where intelligent, fast learning, adaptive bots can precision-target messages for maximum relevance and impact, often in real time.
“The job of finding the optimal best within the give space and constraints has now moved to algorithms. Programmatic buying is already transforming the lower funnel, and will more and more impact the upper funnel investments as well," he added.
The report by Magna Global is intended to provide key insights and forecasts on the shift to programmatic in the international arena.
North America is by far the leading programmatic market, accounting for more than half of the world’s total programmatic spend, followed by other big players like Australia, Japan, China and the United Kingdom.
However, the growth rate of less mature markets shows a rapid acceleration in the industry; while the top 10 programmatic markets are growing by 39% this year, the medium and smaller markets will grow between 57% and 66% in 2014.
Total RTB spend will be US$54 million in 2014, up from US$19 million last year (176% growth), but in the following years, RTB shares will vary significantly between low penetration markets like Korea and Taiwan, and Malaysia and Singapore which will top the RTB market with 30% share by 2018.
Korea will dominate the programmatic share in the region this year (US$237 million), but Malaysia and Singapore will become the No 1 and No 2 real-time bidding (RTB) markets in 2014 with US$12 million and US$10 million of spend respectively.
By 2018, Korea will become the largest RTB market even though its RTB penetration will be one of the lowest in the region, the significant total size advantage it has on the other markets will eventually win out.
RTB and non-RTB purchases will represent 25% of total display spend in developing Asia in 2014. In addition, RTB being newer than non-RTB programmatic buying in most markets will grow to over 50% of the total display market by 2018.
Other key findings from the report include:
The combined size of Japan, China and Australia’s programmatic markets are 6x larger than the rest of those in developing APAC.
In the developing Asia region, Korea represents the largest share of the total programmatic spend among developing Asian markets with a total of US$237 million in 2014.
When looking at just RTB buy, Malaysia will be the No 1 market this year with US$12 million spend; Singapore follows closely behind with an estimated US$10 million spend. The two countries’ RTB penetration will grow to 30% by 2018 and will eventually lead and surpass that of China’s.
Desktop display represents 94% of total RTB spend, with the remaining 6% representing video and mobile RTB. Social represents the majority of non-RTB programmatic spend in researched Asian markets.
In many developing APAC markets, Google remains the dominant exchange player by impressions.
Magna Global concluded that while a successful programmatic infrastructure is not build overnight, the lessons learned from well-developed programmatic markets continue to translate into younger markets now entering this field, leading to fast-growth programmatic rates.
To access a copy of the report [PDF document], click here.
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