Taming the Wild West

Wild West

Jay Friedman, partner and COO at Goodway Group, shares his insight into the ad tech future resulting from the explosion caused by header bidding.  His core notion is that the vast number of queries generated by programmatic ad buying are forcing overload on both the supply and demand side of the ad equation.  The quantities are swamping the systems and will inevitably force consolidation.

As an example, Friedman talks of a web page that today generates 120 bid requests for four ad positions as limiting to maybe five, the number of DSP’s with the infrastructure to handle the volume.  Similarly, on the supply side Friedman sees the real need for only “three display, three video, three native and a couple of mobile SSPs.”

The message is that we may be coming to the end of the Wild West stage of programmatic expansion and that we should expect the market to exercise some law and order in the foreseeable future.   Source: eMarketer

The Largest Mobile Audience in the World is Larger

Carriers - Sept 20117

 

Mobile subscriptions in China continue to grow, but as we have noted before, at a much slower rate than in past years. The average increase since January of this year has been 6.7 million new smartphone subscriptions per month compared to the average of 22.5 million in each of the first nine months of 2016. There is now a subscription for all 1.4 billion people in China as the market is in full replacement mode. Flip-phones and not so smart phones are disappearing.

Chinese Millennials on the Move

Chinese Travel

 

Chinese millennials (18-34 year olds) are the country’s most ardent overseas travelers, well out of proportion to patterns in the west.  And it is projected that they will be taking 70% of the trips by 2020. Using data from Phocuswright’s industry tracker, analysis from Bloomberg Intelligence says, “As China’s travel market takes off, all eyes should be on the country’s roughly 400 million millennials, who will drive spending on airfare, hotels, theme parks, casinos and cruises.”

Blatant plug: mPoint recommends that travel-related advertisers reach that audience through our Chinese-oriented networks.  Source: Bloomberg.com

Programmatic Crystal Ball

Minority Report

A conversation with Eunice Kim, media planner with Toyota North America revealed an expansive view of programmatic’s evolving future. She sees ever-expanding data targeting as “more measurement points, targeting capabilities and data signals” become available. At the extreme end of the spectrum she imagines emotion-based targeting, that is, targeting based on what is known about a consumer’s “personality traits or their emotional state” as a step beyond mere demographic data. Ultimately, AI enters the targeting sphere.

The possibilities create Minority Report level intensity, but before we get to the outer edges of the programmatic universe, we first must conquer the treacheries of viewability and ad fraud that are restraining our current world.  Source: eMarketer

 

China’s Consumer Price Index Steadies

Consumer Price Index-Sep-17

 

September’s Consumer Price Index for China hovers around the 13-month average of 101.7. That means there is little pressure on consumers to slow their buying, a good thing for the economy in general.  Source: www. Tradingeconomics.com; National Bureau of Statistics of China

The Inevitability of Mobile Programmatic Ad Buying

Transparency Concerns

 

A survey of 500 British marketers revealed a litany of concerns they have with regard to transparency in the mobile programmatic world. Overlying the direct concerns, as expressed in the table, is the belief among 74% of the respondents that mobile programmatic is either ‘as confusing’ or ‘more confusing’ than programmatic for the desktop. Here’s the kicker: In spite of the all these concerns fully 60% of the respondents said they intended to increase their programmatic mobile ad spend in the next year. Apparently, the power of the market trend toward programmatic ad buying and toward mobile usage is undeniable.  Source: Netimperative.com

China’s Manufacturing Expansion Slows

Manufacturers PMI

 

Last week we reported a major slow down in the expansion of China’s service sector. This week we see a relatively minor slow down in expansion on the manufacturing sector side. Both are still expanding, but at slower rates. Slowing increases in output, new orders and exports could be explained by some inflationary pressure and the government’s environmental inspection policies.

Looking to the future, director of macroeconomic analysis at CEBM Group, Zhong Zhengsheng’s analysis says, “The Chinese economy was stable in the third quarter, but the outstanding price pressure from upstream industries will be a drag on the continued improvement of companies’ profitability.”  Source: Markit Economics

Follow the Money

Quarterly Ecommerce - Q217

Sitting in the west, the dominance of Amazon is felt daily.  The view from China is quite different.  There Tmall by Alibaba and JD.com represent 84.2% of the market while the remainder of the market is made up of more than eight smaller players including Amazon at a measly 0.9%.  It is a example of China’s singularity.  In the biggest digital sectors – search and e-commerce – they separate themselves from the rest of the developed world, which explains the challenges in trying to penetrate that lucrative market.  Sources: eMarketer, International Enfodesk

A Call to Arms Against Fraud

Fraud Triangulation

 

After a bad experience with bot fraud and domain spoofing, vice president of programmatic and data strategy at Business Insider, Jana Meron articulates the need for all elements of the advertising world to “commit to enforcing higher standards.”

Responsibilities

  • Exchanges must police their buy-side partners to assure they are not reselling inventory.
  • Supply-side platforms need to enforce their contracts with buyers. Turning a head when there’s suspicion does injustice to those who are footing the bill.
  • Publishers must fight unauthorized reselling of their inventory and join IAB Tech Lab’s Ads.txt initiative.
  • Demand-side players must resist ads that “appear too good [read: cheap] to be true.” Best practices say one should use third party fraud tracking and blacklists to reduce bad actors while seeking exchanges that actively search for fraud.

Source: AdExchanger

China’s Government Reports GDP within the New Norm

Quarterly GDP - Q217

 

China’s official second quarter GDP stayed the same as the first quarter coming in a millisquigen above expectations.  Analysts note that “industrial output and retail sales picked up while fixed-asset investment remained strong.”  One must always take government calculated GDP numbers with a grain of salt, but the relative trend is probably accurate.  The economy slide that was predicted in early 2016 has not materialized as many other indicators confirm.  Sources: Trading Economics; National Bureau of Statistics, China