Interpretation of iResearch's 2014 DSP Industry Analysis Report

iResearch recently released the "2014 DSP Industry Analysis Report", which sorted out and analyzed the current development status of DSP and the entire industry chain. Since DSP began to appear in China, the market has experienced three or four years of development. From a small number of pioneers to more and more participants entering the market, from careful exploration of development routes to flourishing based on different positioning, from RTB to programmatic buying, a revolution brought about by DSP advertising technology is sweeping in, changing the entire marketing industry, and its impact is no longer limited to the role of DSP.

Changes: 2013 vs. 2014

Looking back at the iResearch DSP report in 2013 and comparing it with the current situation in 2014, we can clearly see the changes in China's rapidly growing programmatic advertising market in just one year.

1. The concept of DSP is gradually weakening, and multiple roles in the programmatic buying industry chain are given equal importance

The Internet is unpredictable. From widespread advertising to precise targeting, from media purchases to audience marketing, Internet advertising always brings surprises to marketers. Since 2012, DSP has become popular in the domestic digital advertising market, but the transaction process cannot be completed independently by DSP alone. It has a lot to do with the resource pool opened by the media behind it, including the quality and quantity of resources. In 2014, the industry began to pay attention to the global programmatic buying industry, and at the same time promoted the joint development of ADX, SSP, DMP and other platforms.

2. RTB was the only one that stood out in 2013, but RTB and Non-RTB developed side by side in 2014

Last year, the domestic programmatic ecosystem was mainly based on RTB, and industry insiders focused on the technical aspects of DSP, especially audience buying and precise positioning. But as programmatic buying has gained more attention, we have discovered that it is more than just one link.

In 2014, the awareness and acceptance of Non-RTB programmatic buying methods in the domestic market among advertisers, media, and various parties in the industry chain have increased significantly, becoming an important driving force for the growth of the programmatic buying market. In the future, it will also become a mainstream programmatic buying method to compete with RTB.

3. Diversification of programmatic buying methods, such as preferred transactions, private bidding, programmatic direct sales, etc.

With the promotion of programmatic buying in the advertising industry chain, the best resources, high-quality resources, preferred resources, and long-tail resources are all gathered in the resource pool of advertising transactions. More ADXs of high-quality resources have emerged, making programmatic buying methods more diverse. Advertisers can choose preferred deals, programmatic reservations, priority purchases, invited bidding, open bidding, and other methods to sell according to their own needs.

4. Programmatic buying resources are developing towards vertical segmentation, and mobile and video have also joined this camp

Platforms such as DSP and ADX for mobile and video have emerged one after another, and more mobile and video resources have been added to programmatic buying. Although their current proportion in the entire programmatic buying is still very small, when the critical point of development comes, they may become the two most explosive areas.

Mobile programmatic transactions will have a high growth in 2015. iResearch predicts that the overall scale of mobile programmatic buying will reach 390 million in 2014 and will maintain explosive growth in the next three years. In 2017, the market scale of mobile programmatic buying will exceed 3.5 billion yuan.

5. The number of companies with DMP platforms has grown from a small number to a large number, and from concept to implementation, a booming scene

From 2011 to 2013, seven companies including Allyes, Chuanyang, Yima, iPinyou Interactive, MEDIAV, eMedia and Admaster were on the list of DMP platforms, and by 2014 the number had increased to 19 or even more.

iResearch divides the DMPs in the current domestic market into first-party DMPs and third-party DMPs. First-party DMPs are private DMPs for advertising. They collect and integrate advertisers’ first-party data, including advertising data, official website data, EDM data, CRM data, etc. Advertisers have sole control and use rights over the system. For the so-called third-party DMPs, the control and use rights generally belong to the DMP operator. The collected and integrated data does not belong to any one advertiser, but is third-party data for advertisers. Enterprise-level programmatic platforms and DMPs have also become new growth demands for brand advertisers.

6. Market share has doubled, from 3.6% in 2013 to 8.9% in 2014

We are pleased to see that the number of advertisers actively consulting about programmatic business is increasing, and more and more advertisers have started to try programmatic buying business in 2014. This result is also reflected in the market size of programmatic advertising. In the next few years, programmatic buying will become the transaction model for most online advertising, bringing remarkable changes to the advertising market.

Inventory of the U.S. Programmatic Buying Market

The US advertising market has always been a benchmark for the Chinese market. In 2014, the growth rate of the US programmatic buying market was more significant, with 92.0% of ads delivered through RTB and 8.0% delivered through non-RTB, i.e. programmatic direct buying, a significant increase from 2.0% in 2013. It is expected that by 2016, the proportion of ads delivered through programmatic direct buying will reach 42.0%. The maturity of non-RTB programmatic buying will become an important driving force for the US programmatic buying market.

The programmatic buying market in 2015 is even more exciting

There are currently many programmatic companies in China, each of which has a single or multi-point layout in the industrial chain. As one of the leading programmatic companies with Chinese characteristics, Chuanyangg also embodies the characteristics of multi-point programmatic product layout.

In 2014, Chuanyang launched China's first programmatic buying framework, Programmatic Framework™, which fully penetrates the data layer, algorithm layer, application layer and API layer of the entire Internet advertising architecture with Chuanyang's leading product technology genes, providing the most preferred customized programmatic buying solutions for advertising buyers and sellers. Programmatic Framework™ is different from other programmatic buying products. It is a complete programmatic buying framework that fully includes the programmatic trading path from RTB to NON-RTB, from platform construction to advertising delivery to DMP, providing customers with a one-stop programmatic solution throughout the entire process.

From the application layer, Programmatic Framework™ can provide technical services, marketing services and creative services based on the PF™ framework. In terms of technical services, we customize exclusive DSP, SSP, ATD and DMP platforms for customers; in terms of marketing services, we can provide customers with three modes: self-service/non-self-service, PMP private bidding and Non-RTB programmatic high-quality direct investment; and in terms of creative services, we provide rich media creativity and dynamic creative optimization.

The emergence of various programmatic products and applications has made China's programmatic market flourish. Let us wait and see what the programmatic market will be like in 2015.