Programmatic Advertising in China: eMarketer's Updated Forecast and Estimates

Executive Summary

Programmatic ad spending in China totaled $16.69 billion (RMB110.90 billion) in 2017, a 48.6% increase over 2016. Internet giants Baidu, Alibaba and Tencent—the so-called BAT companies—will continue to dominate the programmatic advertising landscape as consumers spend more time on their digital platforms.

• Since China is a mobile-first market for internet access, digital advertisers have followed consumers by investing in mobile ad formats. In 2017, 79.9% of programmatic outlays were dedicated to mobile advertising. Mobile will drive total programmatic growth throughout the forecast.
• The BAT companies are such large publishers that they control advertising on their platforms, casting a large shadow in China over competing small and medium-sized publishers. As a result, most advertisers buy ads directly through one of the three BAT companies. In 2017, direct sales accounted for 63.5% of programmatic digital display ad spending, while real-time bidding (RTB) represented 36.5%.
• China’s share of total display ad spending (60.0%) still lagged the US (78.0%) and the UK (79.0%) in 2017. While advertisers in China have limited options for digital marketing, an ever-growing number of publishers in the US and UK increases competition, which enables more spending.
• Programmatic digital video accounted for just 24.0% of total digital video ad spending in China last year. Over-the-top (OTT) video publishers like Youku Tudou primarily sell ad slots at a premium cost. These ads are often sold in advance of placement and offer limited programmatic video ad availability.