Adtech firm Hivestack, which specialises in programmatic digital out-of-home (DOOH), is expanding into China, the second-largest OOH market in the world in terms of spending.
Hivestack has opened an office in Shanghai and is eyeing further expansion across North Asia including Hong Kong, Japan, South Korea and Taiwan. It has hired The Trade Desk's SVP of North Asia, Troy Yang, to lead its expansion across the region.
Yang will be located in Hong Kong and will hire a general manager of China to lead the Shanghai office. Further hires in China are planned for Q1 to manage data, technology, partnerships and DSP integrations. As well as hiring regional talent, Yang will be tasked with onboarding and partnering with local demand, supply, data and omni-channel DSP partners. He will report to Hivestack's chief revenue officer Nigel Clarkson.
Hivestack founder and CEO Andreas Soupliotis said Yang's connections in North Asia and his experience in programmatic in China "will be key to helping us realise our ambitious growth plans". Yang has led The Trade Desk's North Asia region for three years, including helping to oversee its entrance into China in 2018. Prior to The Trade Desk, Yang was Asia managing director at Analytic Partners and VP Asia at Nielsen.
Hivestack selected China for its first North Asian launch due to the enormity of the opportunity for DOOH growth. China and neighbouring Taiwan were the most resilient markets for adspend in 2020—the only markets to record growth in Magna's December 2020 study. Programmatic advertising was forecast by Dentsu Aegis Network to grow by 45.7% in China in 2020.
Soupliotis said there is "huge scope" to leverage programmatic technology in DOOH advertising in China, but added that the DOOH landscape is "different from any other country". In most countries, digital outdoor/roadside billboard operators are the biggest DOOH media owners. But in China, place-based companies who predominantly operate screens in elevators and office towers, such as Focus Media and Xinchao, have the highest revenue.
Hivestack's full-stack offering means it works directly with both DOOH publishers and brands. In China, it will initially focus on building up its supply to facilitate “outside-in” buys—bringing overseas media budgets into China.
Soupliotis said this will be key in building relationships in the challenging China market. "Successful delivery of overseas revenue to Chinese DOOH publishers is a great way to build trust, but we have no delusions that it will take time to get there," he told Campaign.
Hivestack has already secured business from a US-based Fortune 500 technology company that is set to run a programmatic campaign in China in Q2. It is currently looking for Chinese supply partners to run the campaign.
As well as “outside-in” buys, Hivestack is also aiming to secure "inside-out" business from Chinese brands looking to buy DOOH campaigns internationally.
"China has amazing brands with products that are exported to other countries, such as Xiaomi, Huawei and Lenovo. As we grow our team in China and our partnerships, we hope to become one of China’s leading domestic programmatic DOOH full stack platforms," said Soupliotis.
Hivestack claims it doesn't have much international competition in China: "You don’t see the usual North American adtech companies in the Chinese Lumascapes," Soupliotis said. On the supply-side, it will be competing with Chinese video and display SSPs "who may try to reposition themselves to include programmatic DOOH". On the demand-side, it plans to embrace and integrate with Chinese DSPs.
While the business is globally hosted on Amazon Web Services (AWS) North America and AWS Japan, Hivestack's server-side stack in China will be locally hosted on Amazon Web Services China. It has also migrated its mapping and geofencing technology, which usually relies on Google Maps, to Baidu’s stack for its China operation. The migration of its tech stack took four months to complete. China is Hivestack's ninth country of operation.