A report into programmatic trends in Asia-Pacific has revealed how privacy shifts brought on by Apple's IDFA and the deprecation of the third-party cookie are fuelling an increase in spend to independent adtech, versus to the walled gardens.
While some digital advertising commentators believed these increased privacy controls would result in the proliferation of walled gardens, the opposite seems to be true so far in APAC.
According to OpenX and ExchangeWire's research report, 'The State of Programmatic in JAPAC 2021', only 16% of brands and agencies are increasing walled garden adspend in response to IDFA and cookie deprecation. Meanwhile, 27% are investing in exchange, SSP, and DSP partnerships. A much lower proportion (16% of brands and 11% of agencies) said they are partnering with third-party ID authentication providers.
Privacy shifts are also leading to increased investment in first-party data. Nearly one-third (32%) of publishers are investing in obtaining more first-party data in order to help authenticate their users.
The vast majority (80%) of brand and agency professionals surveyed said they have access to first-party data. However, nearly one-third (29%) stated they do not believe there are great solutions available to activate this data on the open web. These respondents are more reliant on getting help from DSP partners. Around half (52%) of agencies and brands stated they are confident in activating first-party data, of which nearly half (46%) are investing in partnering with third-party ID solutions.
The report is derived from a survey, conducted throughout April 2021, of 207 media professionals working in brands, agencies, or publishers in Australia, India, Indonesia and Japan.
Overall, it found that programmatic investment and spend is growing at a rapid rate across the region, with nearly two-thirds (64%) of firms increasing their programmatic investment or programmatic revenue percentage over the previous 12 months, compared to just 10% lowering their investment/revenue percentage. This increase is particularly strong amongst publishers, with 13% of these increasing the programmatic proportion of their revenue by 75% or over.
As a result, programmatic is commanding a bigger share of the media mix. More than half (58%) of surveyed firms said they generate at least 40% of their revenue, or spend 40% of their available media investment, within programmatic. In general, publishers are generating a higher percentage of their revenue via programmatic than brands and agencies, with 31% of publishers generating over 40% of their revenue via programmatic, compared to 21% of buyers allocating over 40% of their spend to the channel. Marketers are allocating more media spend to programmatic than agencies are, with 22% of agencies not spending in the channel at all.
India is more heavily invested in programmatic than its peers. Only 2% are not using the channel, compared to 33% in Japan, 9% in Australia and 6% in Indonesia. Moreover, the report found that 12% of respondents within India are generating over 75% of their spend in programmatic—double that of both Australia and Indonesia.
Elsewhere, the report found that concerns over ad fraud and quality are leading buyers to invest in supply-path-optimisation reviews. Two-thirds (67%) of marketers and agencies stated they have run an SPO review in the previous 18 months, with 32% indicating that it was the first one they have ever done.
In general, the report found that both the buy and sell sides are seeking fewer, but higher-quality partners. For example, publishers are using comparatively fewer heading bidding partners than last year, with 30% of respondents now using just one to four partners; 18% more respondents fell into this category than in 2020. This reduction in partners was particularly prevalent in the Indian market.