How Programmatic Buying is Transforming Japan's Market Dynamics
Programmatic trading is becoming a topic of extreme interest in Asia with publishers and advertisers realising the potential for scale and efficiency that was not available with traditional advertising methods. While the trend is picking up relevance in the region per se, industry leaders believe that in Japan, programmatic trends are changing the very dynamic of the market.
Reiterating the importance of programmatic premium in Japan, Xiaoming Shao, Managing Director, Maxifier Asia Pacific observed, “Programmatic trading is growing in importance in the Japanese market, although it is still behind the US and UK in terms of adoption.” To better understand the status of programmatic buying and the opportunities that it opens up in the market, Maxifier, a key player in the domain, organised an industry initiative ‘Programmatic Chaos’ in Tokyo last month.
The need to take more and faster media decisions
Joe Zawadzki, CEO at MediaMath believes that programmatic is a function of the changing media environment and the need to make more decisions faster. “Programmatic media buying automates those decisions that are done repeatedly, and removes inefficiencies from the manual buying process. While a full-time employee in the traditional world of media buying may be able to make 720 decisions per week across its media negotiations with its partners, in the programmatic world that same person could drive 850 billion decisions in one week,” he said.
Although 67 per cent of worldwide ad spend is brand advertising, only 25 per cent of digital ad spend is on branding with the remainder still focused on performance metrics, highlighting the huge opportunity that exists in digital by attracting brand dollars online. “The hurdles here are a lack of creativity online and the need for better and the right metrics for brands. Both of these are now being addressed, and viewability and interactivity metrics are emerging to support brands and a move away from the click,” reflected Aniq Rahman, President of Moat.
Shao also pointed out that while there are local technologies, many businesses are very keen to understand the latest solutions that exist outside Japan that can deliver programmatic, and their applications, as they look to select those technologies which can help bolster their businesses.
A USD 1.1 billion potential
The programmatic concept is still relatively new in Japan. However, its adoption speed is noteworthy. Kirk McDonald, President of PubMatic, quoted IDC research, which identified that by 2016, RTB (real time bidding) spend in Japan would reach USD 1.1 billion and has one of the highest growth rates in the world in terms of RTB spending. He said, “Direct sold inventory via RTB is expected to grow from USD 10 million this year to USD 118 million by 2016, by using opportunities such as private marketplaces to drive this.”
Zawadzki cautioned here that data needs to be viewed as a means, not an end, and ultimately it is results that are important. While dashboards may deliver interesting information, it has no value unless it can be used.
These are exciting times for the display advertising market in Asia as publishers explore different ways in which they can adopt the right balance of branding and performance metrics to get the best out of their campaigns. Japan is seeing interest from various US technology providers given the scope of growth in the market too. However one aspect that comes across in the conversations of industry leaders is that programmatic buying is inducing some fundamental changes in which media buying, and hence the creation of efficiencies, is taking place. The market is still only seeing the tip of the iceberg.