BAT is Driving Up China Programmatic Ad Spend

Three companies will be responsible for the massive spend on programmatic digital display ads, said a recent eMarketer study. Baidu, Alibaba, and Tencent (collectively called BAT) will drive advertisers to invest US$22.81 billion in 2018.

eMarketer predicted that programmatic digital display ad spending in China to grow fast. It noted that the market size would reach $29.61 billion by the end of 2019, representing 69.0% of total digital display ad spending in the country.

Mobile will be the primary driver. The high smartphone penetration in China will see mobile-based ads continue to impact programmatic ad spend positively. Mobile will also account for 83.7% of the total spend on programmatic digital display ads this year.

 “eMarketer raised its estimates on programmatic ad spend in China, thanks to the growing influence of the BAT companies. While over 60% of digital advertising spend already goes to BAT, their influence on the programmatic market is even more dramatic,” Shelleen Shum, senior forecasting analyst at eMarketer said.

While BAT platforms offer "relatively sophisticated ad buying technology," eMarketer noted that BAT rivals would not contribute much. According to the analyst firm, the players "outside the big three remain few and undeveloped."

It is also less sophisticated than the US and UK's market, with the influence of BAT partly to blame. "China's programmatic market still remains behind the US and the UK as BAT's outsized influence stymies the growth of a competitive ad tech ecosystem," Shum added.

Programmatic Ad Spend
How programmatic display ad spend is evolving in China.