RTB spend, a subset of overall programmatic spend, will be $54 million in Asia this year, up from $19 million last year, according to the ‘International State of Programmatic’ study. Social represents the majority of non-RTB programmatic spend in “developing” Asian markets, which includes Hong Kong, Singapore, Korea, Indonesia, Malaysia, Thailand, Philippines and Vietnam.
The combined size of the Japanese, Chinese and Australian programmatic markets is six times larger than the rest of developing Asia. China’s display market alone will be $15 million by 2017, five times the size of all developing display markets combined.
Korea represents the largest share of programmatic spend in the region, with $237 million of total programmatic spend in 2014. By 2018, Korea will become the largest RTB market even though its RTB penetration will be one of the lowest in the region, thanks to the significant total size advantage it has over other markets.
However, in the RTB space Malaysia and Singapore will be the top markets this year, spending $12 million and $10 million, respectively. Also, Malaysia and Singapore’s RTB penetration will lead those of developing APAC, and surpass that of China.
“We believe based on our discussions with players in those programmatic ecosystems that Malaysia and Singapore’s RTB penetration will surpass that of China,” said a spokesperson for Magna Global. “The spend in China is going to be much larger, but it will represent a smaller part of China’s total display spend.”
The spokesperson attributed this to several factors. For one, China’s digital regulatory environment is more difficult than some other APAC countries. Secondly, Western programmatic companies have had a more difficult time penetrating the Chinese market than they have elsewhere. Finally, China’s display market is very fragmented and already well developed. “In some ways it’s more difficult to cannibalize existing display spend than it is to have the programmatic ecosystem grow at the same time as the display market itself.”
Programmatic including both RTB and non-RTB purchases is expected to account for 25 per cent of total display spend in developing APAC in 2014. RTB will represent 3 per cent of total display spend in 2014, although this is likely to grow quickly with Singapore and Malaysia surpassing the 30 per cent mark by 2018.
Magna Global foresees considerable changes in desktop display trends. At present, PC spending represents 94 per cent of total RTB spend, while video and mobile make up the rest. Desktop display is expected to represent two-thirds of total of total RTB spend by 2018. Mobile will make up more of the remaining one-third than video.
According to the study, the dominant ecosystem players in these Asian markets are big international companies. As no individual market is substantial individually, few national players have launched operations to compete with standard DSP/exchange/trading desk options. Growth rates are high enough in some of the smaller countries to justify establishing a presence for global programmatic companies. In many developing APAC markets, Google remains the dominant exchange player by impressions.
CPMs remain low, as is typical for markets in their infancy. For desktop display, most CPM levels in APAC are in the US$0.20 to US$0.40 range depending on the inventory.