Online advertising spend in APAC is set to surpass US$52 billion by 2017, according to PricewaterhouseCoopers’ (PWC) latest global entertainment and media outlook. The figure currently stands at just over US$27 billion, but is expected to rise at a compound annual growth rate of nearly 14% over the next four years. Sounds great, right? Well, yes, but in order to maximise the opportunities and stand any chance of success, international companies must avoid the ‘one size fits all’ mentality and respect the intricacies and differences between these diverse local markets.

Case in point, China. If there’s one market that’s as far as possible from the UK or US in terms of the DNA of its online video landscape, it’s China. Given that the country’s overall online ecosystem is fundamentally different than most other world markets, that won’t come as much of a surprise. The Chinese market has developed organically in response to local challenges, rather than copying the kinds of solutions commonly found in other countries. As a result, you have big players in the market that provide combinations of services seldom found together in western firms — creative production, mobile app development, a DMP and an Ad Network can all be found within a single company.

Another key unique element of the Chinese market is the dominance of Youku Tudou, which controls more than a third of the video market. Three times the size of its nearest competitor, Sohu, which has around 10.3% market share, Youku Tudou has spent the last year working on its corporate structure post-merger, so the company’s road map for development is still unclear. However, one of its more recent moves has been a tie up with China’s version of Twitter, Sina Weibo, to promote its video content to the company’s 500 million microbloggers.

That can only strengthen its hand in a video market where most deals are done direct. Mainstream adoption of programmatic buying is still a few years away, a fact that’s unsurprising given the fragmented nature of the display market, which traditionally goes the programmatic route first.

Standardisation is another obstacle. This is a market where VAST/VPAID-esque standards are unheard of. Every publisher has its own tech stack and integrations can be troublesome. Guaranteed buys are the order of the day and it’s rare to see inventory being sold on a passback or exchange basis. Trading currencies are also different. CPM buying models are becoming more commonplace, but buying models like Cost Per Day, Cost Per Time, and Share of Voice continue to be widely accepted within the market.

A tricky and uneven terrain to negotiate, however, companies like Videology with feet on the ground and local experts in the market can anticipate and plan for these market-specific differences to help not only adapt, but also to share best practices from around the globe as appropriate.

The search for markets more similar to those in the US and Europe, typically starts in Australia, although like much of Asia, data coverage remains a challenge. Then you have markets in Southeast Asia like India and Indonesia that are receiving a lot of attention from global FMCG companies who have experience in the online video space. This has certainly helped with the development of those markets, but the ecosystem is still nascent with a lack of standardisation, custom-built technology stacks, and a wide range of local publishers new to the video space.

To be fair, they’re not far off from where the UK and Europe were five years ago, but with the added opportunity of mobile. All these markets have huge mobile penetration typically bigger than their PC penetration — and it’s not uncommon to see people consuming video via public WiFi networks. The compound annual growth rate (CAGR) of ad spend across APAC shows mobile leading online, television and out of home in every major market from now until 2017 and is projected to grow by 22% during the same period according to PricewaterhouseCoopers.

One of the markets most likely to grow dramatically in the coming years is Japan. This market has an established infrastructure, people experienced in digital media, and even a surprising amount of data (though said data is often tightly controlled). Japan already has a developed programmatic market for display and we’re seeing that filter over to the video space.

The critical factor in Japan is the way the country approaches innovation. This is not a market where brands and agencies undertake small tests and gradually increase investment. In Japan, success is achieved by building relationships and establishing long-term partnerships.

Japan aside, the development of programmatic buying for video will happen at a faster pace overall in Asia than it did in Europe and the US for two key reasons.

Firstly, the demand is there from big multinational advertisers. They have been educated on the power of targeted video from their work in more established markets and they want to take advantage right across the world, particularly in Asian markets where population and wealth are increasing at a rapid pace.

Secondly, consumer media habits are changing just as quickly as they are in the West. Media owners need to find incremental revenue streams and video is an effective means of achieving that growth.

The big lesson here is that you can’t treat Asia-Pacific as a single market. Every country is different, consumer habits vary enormously and on the supply side, the big and small publishers are mostly country-specific. APAC is a region of opportunities like any other, however, success will be achieved through understanding and respect for the differences between markets.