APAC programmatic guaranteed usage predicted to double by 2020

A relatively new model of programmatic buying that allegedly helps publishers command better prices is predicted to double its penetration in Asia-Pacific in the next two years.

According to a report by The Boston Consulting Group, digital display and video ad placements bought using programmatic guaranteed will increase from 6 per cent  in 2017 to 11 per cent in 2020.

Largely touted by Google, a partner of BCG, the technology works by linking up a programmatic buyer to a publisher’s audience, via device ID or cookie, at an agreed fixed price.

The publisher will then send the right ID on their bid request through its SSP. In theory, the publisher will benefit from the pricing commitment, while the buyer can access the publisher’s audiences on a larger and more efficient scale than the manual tag-based reservations seen in private marketplaces.

Like header-bidding, the shift to programmatic guaranteed has come as part of the move towards brand safe premium advertising.

However, as with header-bidding, programmatic guaranteed is regarded as tough to implement due to the necessity of aligning a publisher and an agency’s data-management platform in order to perform the cookie or device ID match.

As such, according to the BCG’s report, markets with an advanced technological ecosystem, like China, are likely to adopt the model faster than their counterparts.

Countries like China, where there is a dearth of third-party ad serving, may “leapfrog the direct reservations approach” and establish programmatic guaranteed as the norm, the report added.

Due to the dominance of the BAT trio (Baidu, Alibaba, and Tencent), and their preference towards direct deals or proprietary programmatic platforms. In China, programmatic still only accounts for a quarter of transactions. However, as the BAT trio increases its investment in automated buying, competition for premium mobile inventory is expected to heat up over the next few years, BCG added.

India, another market where current programmatic penetration is low, is also expected to leapfrog the trend into programmatic guaranteed, rising from six per cent in 2017 to about 17 per cent in 2020.

Meanwhile, slower adoption will occur in South East Asian markets like Indonesia and Malaysia, due to a shortage of buy side and sell side partners and programmatic education. However, the countries would benefit from access to premium inventory, control, and transparency, the report said.

Singapore as the APAC hub is also expected to grow by around 3 per cent, while the Philippines and Vietnam will trail behind as the least developed programmatic markets.

In addition, Japan, despite falling into the category of ‘Advanced Asia’ in Zenith’s annual media spend report, still has a low programmatic penetration. With only 20 per cent of transactions performed programmatically, and four publishers dominating two-thirds of the direct reservations market, by 2020, the penetration of guaranteed is predicted to barely scrape 1 per cent.


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