China is the rising star of global advertising spenders. With more than 500 million internet users, it is an expanding market that advertisers are clamouring to target in an effective way. In fact, JP Morgan predicts that China’s video advertising market will be the largest in the world by 2015.

Given the large advertising market in China, and the relatively recent adoption of programmatic buying, China presents a lot of opportunity for TubeMogul to be at the forefront of education and adoption of new models, specifically with programmatic branding. We already have offices established throughout the APAC region, including Singapore, Australia and Japan; all of our offices there have seen great traction and growth over the past six months to a year. While the Chinese market does present different challenges than other countries we work in, we are expecting similar growth patterns to form amongst consumers in this country.

When it comes to the layout of the market, however, China has not followed in the footsteps of Western companies; there isn’t a replication of the Lumascape, as almost none of the same players are active in China. Instead, local companies fill that space, spanning a wide range of activities. It's common to see a company offering both a supply- and demand-side platform, data management platform, ad serving and traditional ad network services, all rolled into one, making the boundaries of the Chinese digital advertising ecosystem less clearly defined. That being said, the Chinese marketplace presents a world of opportunity to grow and educate on the programmatic market. Although digital video has high rates of adoption, programmatic buying is still virtually non-existent, and most of China’s video inventory is sold in manually-executed direct deals.

Despite the lack of programmatic buying, the appetite for online video in China is definitely hot: less than a year ago, China watched over 4 billion hours of online video in one month alone. Specifically with mobile, there has been a widespread and fast upswing of video viewing across the country, with some reports of 50% growth quarter-to-quarter. In China, online video is, in some ways, even more developed than in the West. The majority of internet users in China spend time watching online video content, much more than their Western counterparts, and viewers have a much higher adoption of watching their favourite shows everywhere, using devices ranging from tablets to connected TVs. eMarketer reports that 55% of Chinese users made a purchase using their mobile, compared with 19% in the United States, and digital video consumption seems to be going the same way. The high-growth digital video market presents a great opportunity for TubeMogul to step in and enhance the way brands are connecting with consumers, especially in the mobile market.

With purchasing power highly concentrated in the so-named Tier 1 cities such as Shanghai, Beijing and Guangzhou, and given the limited number of publishers and available inventory, prices in those areas have been rising substantially. However, the price has not been a deterrent for brands that are still showing high interest in the video ad space, so much so that publishers are rapidly looking for ways to grow inventory and stay on top of the demand.

Even though video is the most natural vehicle for branding online, and the industry is growing, video budgets in China are more oriented toward direct response, compared to other markets. TubeMogul can present a reliable and trustworthy way for marketers to gauge and record metrics for branding campaigns, something that isn’t currently widely available in China. TubeMogul’s expansion in China provides a great opportunity to bring programmatic video buying into the predominantly direct-response focused landscape. In addition, TubeMogul is able to further introduce the advanced branding capabilities that come with programmatic video advertising, capabilities that that our clients have come to expect elsewhere in the world.

China has developed a very healthy relationship with online video and video ads, providing many growth opportunities for companies like ours to bring a positive experience for both consumers and brands in an exciting and growing environment. Bring on the challenge!