Asia much slower to embrace programmatic than rest of the world – claims Zenith

According to media agency Zenith’s Programmatic Marketing Forecasts report, 65% of money spent on advertising in digital media in 2019 will be traded programmatically.  However in key Asian markets, the percentage of money spent on programmatic trading on digital media is considerably lower than the global average.

Speaking to Mumbrella, Zenith’s head of forecasting and director of global intelligence Jonathan Barnard set out the figures for a number of countries in the region: Taiwan leads at 43.1%, followed by China at 31.5%, Hong Kong at 28.1%, Malaysia at 25.2% and India at 13.8%. Figures for Singapore were unavailable.

By contrast, the United States traded 83% of all digital media programmatically this year, followed by Canada at 82%, the United Kingdom at 76% and Denmark at 75%. By 2020, programmatic advertising will account for more than 80% of digital media in these markets, it is claimed.

Asked why Asian markets were less eager to embrace programmatic trading, Barnard said: “Advertisers in Asian markets are often more interested in reach and mass awareness than pinpoint targeting.

“Publishers have been reluctant to sell premium inventory programmatically, because they want to guarantee prices and volumes. Advertisers are starting to embrace targeting and publishers are selling premium inventory, but this shift is taking time.”

Asked for a timeframe when programmatic trading would become the default method in Asia, he added: “It should account for more than half of digital media in South East Asia within five years, and be the default method within 10.”

Currently, the US is the world’s biggest programmatic market according to Zenith, spending $40.6 billion. China is a distant second with a spend of $7.9 billion on programmatic, followed by the UK with $5.6 billion.

Zenith predicts that: “By 2020, advertisers will spend $98 billion on programmatic advertising, representing 68% of their expenditure on digital media advertising.”

The report added: “It’s only a matter of time before programmatic trading becomes the default method of trading for all media.

“However, the transition is taking slightly longer than we expected – last year we forecast that 64% of digital media would be programmatic in 2018, and 67% would be programmatic in 2019, so we have pulled back both forecasts by two percentage points.

“The introduction of privacy legislation such as the EU’s GDPR has had some chilling effect by making certain data previously used in programmatic transactions unavailable, and making other data more costly to process.

“But we think the main reason for the slowdown in spending on programmatic media is that advertisers are investing more in infrastructure and data to make their programmatic activity more effective.”

Zenith’s global head of digital and innovation Benoit Cacheux said: “Programmatic trading improves efficiency and effectiveness, and is gaining a dominant share of digital media transactions.

“The scale of operational restructuring to make the most of it is both extensive and expensive, though, and advertisers are spending more carefully while they invest in infrastructure and data and review the quality of media.

Speaking about the methodology driving the forecasts, Barnard said: “They [the data sets] come from Zenith’s programmatic experts in each country, those actively involved in running campaigns for clients.

“They base their forecasts on their experience of trends in client spending, pricing, technology, infrastructure and marketplace practices. This is the fourth edition of our programmatic forecasts, so we’ve been able to observe how our previous predictions have turned out and refine them over time.”


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