Short video platforms like Douyin and Kuaishou have significantly influenced video programmatic advertising in China through various mechanisms that enhance user engagement and drive advertising effectiveness. Here are the key ways these platforms impact the landscape:
1. Massive and Engaged User Base
Both Douyin and Kuaishou boast substantial daily active users—over 400 million for Douyin and around 300 million for Kuaishou. This vast audience provides advertisers with extensive reach, allowing brands to target diverse demographics effectively. The high engagement levels on these platforms mean that ads are more likely to be viewed and interacted with compared to traditional media channels .
2. Content-Driven Advertising
Douyin and Kuaishou prioritize creative, entertaining, and authentic content. Advertisers can create video ads that blend seamlessly with user-generated content, making them less intrusive and more appealing to viewers. This approach enhances user experience, as ads that resonate with the platform’s culture tend to perform better in terms of engagement .
3. Advanced Targeting Options
Both platforms utilize sophisticated algorithms to analyze user behavior and preferences, enabling advertisers to deploy advanced targeting strategies. Advertisers can reach niche audiences based on interests, browsing habits, and demographic information, ensuring that their messages are relevant and timely . This precision targeting is crucial in a competitive advertising environment.
4. Integration with E-Commerce
Kuaishou has made significant strides in integrating e-commerce features into its platform, allowing users to purchase products directly during video streams. This capability enhances the effectiveness of video programmatic advertising by providing a seamless shopping experience that can lead to higher conversion rates. Douyin is also developing similar functionalities, making it easier for brands to convert views into sales .
5. Interactive Ad Formats
The platforms offer various interactive ad formats, such as live-streaming ads and branded challenges, which encourage user participation and engagement. For instance, live-streaming on Kuaishou fosters a sense of community and connection between hosts and viewers, which can lead to higher trust and increased sales conversions .
6. Real-Time Feedback and Analytics
Advertisers benefit from real-time analytics provided by these platforms, allowing them to monitor campaign performance closely. This data-driven approach enables brands to adjust their strategies quickly based on viewer interactions and preferences, optimizing ad spend and improving overall effectiveness .
7. Cultural Relevance
Both Douyin and Kuaishou reflect cultural trends and consumer interests in China. Advertisers who align their messaging with current trends or popular content on these platforms can enhance their brand’s relevance and appeal, leading to better engagement outcomes .
In summary, Douyin and Kuaishou significantly shape video programmatic advertising in China by providing vast audiences, promoting creative content integration, enabling advanced targeting options, facilitating e-commerce interactions, offering interactive formats, delivering real-time analytics, and fostering cultural relevance. These factors collectively enhance the effectiveness of advertising campaigns on these platforms.
The popularity of video programmatic advertising in China is driven by several key factors that reflect the unique characteristics of the market and consumer behavior. Here are the main drivers:
1. Rapid Growth of Mobile Internet Users
China has seen a dramatic increase in mobile internet users, reaching over 829 million. This growth has shifted content consumption predominantly to mobile devices, making video ads particularly effective as they align with how users engage with media on their smartphones and tablets .
2. Rising Demand for Video Content
Video content consumption is surging in China, with platforms like Douyin (TikTok) and Kuaishou leading the way. As users increasingly prefer video over other formats, advertisers are adapting by investing more in video programmatic advertising to capture audience attention effectively .
3. Enhanced Targeting Capabilities
AI-driven programmatic advertising allows for precise audience targeting based on user data and behaviors. This capability enables advertisers to deliver relevant video ads to specific demographics, increasing engagement and conversion rates .
4. Cost-Effectiveness and Efficiency
Programmatic buying automates the ad purchasing process, reducing costs and improving efficiency. Advertisers can optimize their budgets by targeting specific audiences without the inefficiencies associated with traditional media buying methods . This efficiency is particularly appealing in a competitive market.
5. Integration with E-Commerce
The rise of live e-commerce and shoppable video ads has created new opportunities for advertisers. Platforms often allow users to purchase products directly while watching videos, enhancing user engagement and driving sales simultaneously . This seamless integration between content and commerce is a significant factor in the growth of video programmatic advertising.
6. Improved User Experience
Video ads can be more engaging than static formats, providing richer storytelling opportunities that resonate with viewers. The ability to create immersive experiences helps brands connect emotionally with their audience, leading to higher retention and engagement rates .
7. Innovative Ad Formats
The development of interactive and innovative ad formats, such as augmented reality (AR) and virtual reality (VR) experiences within video ads, has also contributed to their popularity. These formats capture user interest more effectively than traditional ads .
8. Support from Major Platforms
Dominant players like Baidu, Alibaba, and Tencent have developed their own programmatic advertising technologies, providing robust infrastructure for video programmatic buying. Their extensive reach ensures that advertisers can access large audiences through targeted video campaigns .
In summary, the combination of a growing mobile user base, increasing demand for video content, advanced targeting capabilities, cost-effectiveness, integration with e-commerce, and support from major platforms are all key factors driving the popularity of video programmatic advertising in China.
AI-driven programmatic advertising significantly enhances user engagement in China through several innovative strategies and technologies. Here are the key ways in which it achieves this:
1. Personalized Advertising Experiences
AI enables advertisers to analyze vast amounts of user data, allowing for highly personalized marketing messages tailored to individual preferences and behaviors. This personalization increases the relevance of ads, making users more likely to engage with the content. For instance, platforms like Alibaba utilize AI to recommend products based on users’ browsing history and purchasing patterns, leading to higher engagement rates .
2. Dynamic Content Optimization
AI-driven programmatic advertising allows for real-time adjustments to ad content based on user interactions. This means that if an ad is not performing well, it can be modified on-the-fly to better suit the audience’s preferences. This responsiveness keeps the content fresh and engaging, reducing ad fatigue among users .
3. Contextual Targeting
By leveraging AI, advertisers can deliver ads that are contextually relevant to the content being consumed by users. This method ensures that ads appear in environments where they are most likely to resonate with the audience, such as video ads on platforms like Douyin (TikTok) or Youku. Contextual relevance enhances user engagement by aligning ads with user interests at the moment they are consuming related content .
4. Enhanced User Insights
AI tools provide deeper insights into consumer behavior and preferences, enabling advertisers to refine their targeting strategies continuously. By understanding what drives user engagement, brands can create more compelling campaigns that resonate with their target audiences, ultimately leading to higher interaction rates .
5. Interactive and Engaging Formats
AI facilitates the creation of interactive ad formats that engage users more effectively than traditional static ads. For example, AI scene marketing platforms can integrate brand exposure directly into video content, allowing for seamless interactions where users can purchase products while watching videos. This immersive experience significantly boosts user engagement .
6. Efficient Retargeting Strategies
AI-driven programmatic advertising excels in retargeting users who have previously interacted with a brand but did not convert. By serving tailored ads based on past behaviors, advertisers can re-engage potential customers effectively, enhancing conversion rates and overall engagement .
7. Utilization of Rich Media
The rise of video content consumption in China makes programmatic video advertising particularly effective. AI helps optimize video ads for specific audiences and contexts, ensuring that they capture attention and encourage interaction. As users increasingly engage with video content on platforms like Kuaishou and Douyin, this strategy becomes crucial for maintaining high engagement levels
In summary, AI-driven programmatic advertising improves user engagement in China by delivering personalized, relevant, and interactive experiences that resonate with consumers’ interests and behaviors. This approach not only enhances the effectiveness of advertising campaigns but also fosters stronger connections between brands and their audiences.
AI-driven programmatic advertising is increasingly essential in China for several reasons, reflecting the unique challenges and opportunities within the market. Here are the key factors that highlight the need for this approach:
1. Efficiency and Cost-Effectiveness
Programmatic advertising automates the buying and selling of ad space through AI and machine learning, significantly reducing the time and resources required compared to traditional advertising methods. This efficiency translates into lower costs for advertisers, allowing them to allocate their budgets more effectively across various channels .
2. Enhanced Targeting Capabilities
With the vast amount of data available in China, AI-driven programmatic advertising enables precise audience targeting. Advertisers can segment audiences based on demographics, behaviors, interests, and contextual factors, ensuring that ads reach the most relevant users. This capability helps improve engagement rates and return on investment (ROI) .
3. Adaptation to Mobile Consumption Trends
China has a massive mobile user base, with over 829 million mobile internet users consuming content primarily through their smartphones. Programmatic advertising is particularly effective in this environment, allowing advertisers to deliver targeted ads on mobile platforms where consumer attention is concentrated .
4. Dynamic Content Optimization
AI technologies enable real-time adjustments to ad content and placements based on performance data. This dynamic optimization means that advertisers can quickly respond to changing consumer behaviors and preferences, enhancing the effectiveness of their campaigns .
5. Improved User Experience
AI-driven advertising can enhance user experience by reducing irrelevant ads and improving ad relevance. By analyzing user data, AI can help deliver personalized content that resonates with individual consumers, leading to higher engagement and satisfaction.
6. Integration with Emerging Technologies
The integration of AI with other technologies such as blockchain, augmented reality (AR), and virtual reality (VR) is beginning to reshape advertising in China. These innovations allow for more immersive and interactive ad experiences, which can capture consumer interest more effectively than traditional formats .
7. Data-Driven Insights
AI facilitates advanced analytics that provide advertisers with deeper insights into campaign performance and consumer behavior. These insights allow for better decision-making and strategy adjustments, ultimately improving campaign outcomes .
8. Competitive Advantage
As competition intensifies in the Chinese market, leveraging AI-driven programmatic advertising can provide brands with a significant edge over competitors who rely on traditional methods. The ability to adapt quickly to market changes and consumer preferences is crucial in a fast-paced environment
In summary, AI-driven programmatic advertising addresses many of the pain points faced by advertisers in China today, including inefficiencies in traditional models, the need for precise targeting, and the demand for engaging content tailored to mobile users. As the digital landscape continues to evolve, adopting these advanced technologies will be essential for brands aiming to succeed in this dynamic market.
Yoyi DSP offers a range of specific targeting options designed to help advertisers effectively reach niche audiences. Here are the key targeting features available:
1. Behavioral Targeting
Yoyi DSP allows advertisers to target users based on their online behaviors, such as browsing history, engagement with previous ads, and interaction with specific content. This enables brands to reach audiences who have shown interest in similar products or services.
2. Demographic Targeting
Advertisers can define their target audience based on demographic factors like age, gender, income level, and education. This granular approach helps in reaching specific segments that are most likely to convert.
3. Interest-Based Targeting
Yoyi DSP enables targeting based on user interests and preferences. Advertisers can create segments around particular hobbies, lifestyles, or topics that resonate with their niche offerings.
4. Contextual Targeting
This feature allows ads to be displayed on websites or within content that is contextually relevant to the advertised product. For example, an ad for outdoor gear can appear on travel blogs or adventure-related content, ensuring it reaches an audience likely to be interested.
5. Geographic Targeting
Advertisers can focus on specific geographic areas to reach local audiences or regions where their products are most relevant. This is particularly useful for businesses that cater to localized markets.
6. Retargeting Options
Yoyi DSP provides robust retargeting capabilities, allowing advertisers to reconnect with users who have previously interacted with their brand but did not convert. This includes serving ads to users who visited a website or engaged with a specific product.
7. Custom Audiences
Advertisers can create custom audience segments using first-party data from their own customer databases. This allows for highly tailored campaigns that align closely with existing customer profiles.
8. Lookalike Audiences
Yoyi DSP can identify and target new users who share similar characteristics and behaviors with existing customers. This expands the reach while maintaining relevance to the niche market.These targeting options make Yoyi DSP a powerful tool for advertisers aiming to connect with niche audiences effectively, enhancing engagement and conversion rates through precise and relevant ad placements.
Yoyi DSP and iPinYou are two prominent demand-side platforms (DSPs) in China, each with unique features that cater to different aspects of digital advertising. Here’s a comparison highlighting their distinctive offerings:
Unique Features of Yoyi DSP
Data Management Platform (Data Bank):
Yoyi DSP has developed a comprehensive Data Bank that allows clients to collect and analyze first-party data from various campaigns. This platform provides insights into consumer behavior, enabling advertisers to optimize their strategies effectively
Integrated Ad Formats:
Yoyi offers a unified platform that integrates multiple ad formats, including display, video, and mobile ads. This allows advertisers to manage all their campaigns from a single interface, streamlining the process and improving efficiency.
Focus on Full Funnel Tracking:
Yoyi emphasizes tracking the entire consumer journey, from ad exposure to conversion. This capability helps advertisers understand the effectiveness of their campaigns at various stages and adjust strategies accordingly.
Advanced Audience Targeting:
Utilizing AI-driven algorithms, Yoyi DSP provides sophisticated audience segmentation and targeting capabilities. This enhances the precision of ad placements and improves overall campaign performance.
Historical Data Utilization:
Yoyi leverages historical data for predictive analytics, allowing advertisers to make informed decisions based on past campaign performances and trends.
Unique Features of iPinYou
Strong RTB Technology:
iPinYou is known for its robust real-time bidding (RTB) capabilities, which allow for quick and efficient bidding processes on ad impressions across various platforms.
Dynamic Creative Optimization:
iPinYou focuses on dynamic creative optimization, enabling advertisers to tailor their ads in real-time based on audience interactions and preferences. This feature enhances engagement by delivering more relevant ad content.
Extensive Audience Profiling:
The platform provides advanced audience profiling tools that help advertisers identify and target specific consumer segments effectively. This enhances the effectiveness of campaigns by reaching the right audiences.
Partnerships for Enhanced Inventory Access:
iPinYou has established partnerships with various publishers and ad exchanges, giving it access to a broad inventory of ad placements, which is crucial for maximizing reach and effectiveness.
Multi-dimensional Reporting:
The platform offers comprehensive reporting features that provide insights into campaign performance across multiple dimensions, allowing for better optimization and strategy adjustments.
Summary
While both Yoyi DSP and iPinYou offer valuable services in the digital advertising space, Yoyi stands out with its integrated Data Bank and full funnel tracking capabilities, making it particularly strong in data utilization and campaign management. In contrast, iPinYou excels in real-time bidding technology and dynamic creative optimization, focusing on delivering highly relevant ads through extensive audience profiling. Each platform has its strengths tailored to different advertising needs within the Chinese market.
Here are five notable AI-driven demand-side platforms (DSPs) in China, including Yoyi DSP, which exemplifies the integration of artificial intelligence in digital advertising:
1. Yoyi DSP
Yoyi DSP is a leading platform that utilizes AI algorithms for programmatic advertising. It focuses on optimizing ad placements and targeting through data analysis, helping advertisers reach their desired audiences effectively. Yoyi DSP’s machine learning capabilities enhance campaign performance by continuously learning from user interactions.
2. Baidu DSP
Baidu’s DSP leverages its extensive search and user data to optimize advertising campaigns. The platform employs AI for precise audience segmentation and real-time ad placement adjustments, ensuring high engagement rates and maximizing return on investment for advertisers.
3. Alibaba DSP
Alibaba’s advertising platform integrates AI to analyze consumer behavior across its vast ecosystem, including e-commerce and cloud services. This allows for targeted advertising that resonates with specific demographics, utilizing machine learning to refine campaign strategies dynamically.
4. Tencent DSP
Tencent’s DSP benefits from its social media networks, such as WeChat and QQ, to deliver highly personalized ads. The platform uses AI to analyze user interactions and preferences, enabling advertisers to create more relevant and engaging campaigns.
5. Kuaishou DSP
Kuaishou, known for its short-video content, employs AI-driven analytics to optimize video ad placements. The platform analyzes viewer behavior and trends to deliver personalized ads that align with user interests, significantly improving ad effectiveness.These platforms illustrate the growing trend of AI integration in digital advertising in China, enhancing targeting precision and overall campaign performance.
How does Yoyi DSP compare to other leading AI-driven DSP companies in China
Yoyi DSP is a prominent player in China’s demand-side platform (DSP) market, but it faces stiff competition from several other leading companies. Here’s a comparison of Yoyi DSP with some of its key competitors:
Yoyi DSP Overview
Founded: 2007
Focus: Specializes in precision targeting technology and internet marketing services.
Capabilities: Offers both impression-based and performance-based advertising solutions. It has developed a robust network of top publishers in China and utilizes AI for audience targeting and campaign optimization.
Unique Features: Yoyi has integrated multiple ad formats (video, mobile, display) into a unified system and launched a data management platform (Data Bank) to enhance data utilization for advertisers.
Market Leadership: iPinYou is recognized as the largest DSP in China, leveraging advanced real-time bidding (RTB) technologies and extensive audience profiling capabilities. This positions it as a formidable competitor to Yoyi
Integration with Social Media: Tencent’s DSP benefits from its integration with social media platforms like WeChat, allowing it to deliver highly personalized ads based on user interactions. This gives Tencent an edge in consumer engagement.
E-commerce Focus: Alibaba’s DSP excels in leveraging its vast e-commerce ecosystem to provide targeted advertising solutions that are particularly effective for retail brands. This specialization contrasts with Yoyi’s broader focus on various ad formats.
Video Advertising Growth: Kuaishou is rapidly emerging as a strong competitor by focusing on video advertising, capitalizing on the popularity of short-form video content among users. This niche may attract advertisers looking to engage younger audiences effectively.
In summary, while Yoyi DSP is a significant player with strong technological capabilities and a diverse client base, it contends with well-established competitors like iPinYou, Tencent, Alibaba, and Kuaishou, each leveraging unique strengths in the rapidly evolving digital advertising landscape in China.
China, with its enormous consumer base and rapidly growing digital ecosystem, has long been a coveted market for foreign brands. The potential for growth in the Chinese market is substantial, and as the nation becomes a dominant global player, more international companies are eager to expand into this market. However, many brands mistakenly believe they can simply replicate the marketing automation strategies that have proven successful in their home markets and achieve similar results in China. This assumption often leads to frustration, underperformance, and missed opportunities.
The Chinese market, while lucrative, is vastly different from Western or other international markets. From its unique digital ecosystem and distinct consumer behavior to the regulatory environment and competitive landscape, marketing in China requires a tailored approach. In this article, we will explore why foreign brands can’t directly apply their automated marketing experiences from abroad to the Chinese market and what they should consider instead to achieve success.
1. Understanding the Chinese Digital Ecosystem
One of the most significant challenges that foreign brands face when entering China is navigating its unique digital landscape. Unlike most other countries, where Google, Facebook, and Instagram dominate the digital advertising and marketing space, China has its own set of platforms and ecosystems that operate under different rules and expectations.
The “Great Firewall” and its Impact on Marketing Tools
The Great Firewall refers to China’s strict internet regulations that block many foreign websites and services. This includes major platforms like Google, Facebook, Twitter, and even certain Western marketing automation tools. This means that the tools and platforms international marketers rely on for data analytics, content management, and automated marketing simply won’t work in China.
In place of these, Chinese platforms like WeChat, Weibo, Baidu, Douyin (TikTok), and Alibaba dominate the digital space. Each of these platforms comes with its own advertising ecosystem, unique user interfaces, and different data tracking capabilities. These platforms do not integrate seamlessly with foreign marketing automation tools, forcing brands to rethink their technology stack.
Unique Platforms: WeChat, Weibo, Douyin, and Beyond
China’s social media platforms have a completely different dynamic compared to those in the West. WeChat, for instance, is not just a messaging app but a multi-functional platform where users can pay bills, shop, book appointments, and engage with brands. Brands that wish to succeed in China must adapt their content marketing and automation efforts to fit into these platforms’ specific ecosystems, which often means working with third-party Chinese service providers to navigate the intricacies of API integrations and ad targeting.
Search Engines: Baidu, Sogou, and the Decline of Google
With Google blocked in China, search engine marketing relies heavily on Baidu, which functions differently in terms of SEO, paid search, and display advertising. Marketing automation systems that are optimized for Google Ads or SEO practices outside of China will find Baidu’s system to have unique requirements, especially in keyword selection, ad copy restrictions, and bidding mechanisms.
2. The Cultural Factor: Consumer Behavior in China
Culture significantly influences consumer behavior, and China’s cultural landscape is distinct from that of most Western countries. This creates challenges for brands that try to replicate automated messaging, segmentation, and customer journeys based on experiences from foreign markets.
Localized Messaging and Storytelling
Automated marketing systems often rely on templated messaging and content that can be adapted across regions. However, what works in the U.S. or Europe may not resonate with Chinese audiences. In China, storytelling plays a huge role in building trust and engaging consumers, with narratives often emphasizing tradition, family values, and social harmony. Foreign brands need to adjust their messaging to align with these cultural values, or risk alienating their target audience.
Luxury Perception and the Need for Exclusivity
In China, particularly in the luxury market, exclusivity and status are important drivers of consumer decisions. Automated marketing that relies on mass targeting and generalized email campaigns might not resonate with Chinese luxury consumers, who prefer personalized and exclusive brand experiences. Brands that succeed in China’s luxury market often create bespoke, invite-only experiences and leverage influencers (known as Key Opinion Leaders or KOLs) to reach niche audiences.
The Role of “Face” (Mianzi)
The concept of “face” or mianzi in China involves maintaining a positive social image and reputation. This cultural factor plays a critical role in consumer decision-making and requires careful handling in marketing automation. Foreign brands using broad, automated campaigns that lack personalization may inadvertently offend Chinese consumers by failing to recognize their desire for individualized treatment and social standing.
3. Regulatory Environment: Navigating Chinese Rules and Policies
The Chinese government imposes strict regulations on data privacy, advertising content, and the overall operation of foreign businesses in China. Foreign brands that fail to comply with these rules risk fines, penalties, and even being barred from doing business in China.
Data Privacy and the Rise of the PIPL
In 2021, China introduced its Personal Information Protection Law (PIPL), which is comparable to the EU’s GDPR but with stricter guidelines specific to China. This law governs how companies collect, store, and process Chinese citizens’ data. Any automated marketing strategy must take these regulations into account, ensuring that consumer data is handled in compliance with local laws. Foreign brands need to reassess their data management practices, especially if their automated marketing tools rely on centralized data storage systems based outside China.
Censorship and Content Restrictions
The Chinese government closely monitors and censors content that it deems inappropriate or harmful. Automated marketing strategies that work in liberal markets may run afoul of China’s content restrictions, especially when it comes to politically sensitive topics or cultural nuances. Foreign brands need to build a localized content approval process that ensures all messaging aligns with government guidelines.
Regulations Around Foreign Investment
The Chinese market has complex regulations governing foreign investments, joint ventures, and market entry strategies. Automated marketing cannot operate in a vacuum; brands need to account for these broader strategic and legal considerations when entering China. Depending on the sector, foreign companies may need to partner with a local entity to establish a presence, and this will affect how marketing campaigns can be structured and automated.
4. Consumer Preferences for Digital Payments and E-commerce
China leads the world in mobile payments, and e-commerce is deeply integrated into Chinese consumers’ daily lives. Any marketing strategy that foreign brands implement must take into account the preferred digital payment systems, e-commerce platforms, and shopping habits in China.
WeChat Pay and Alipay: Integrating Payment Systems
Automated marketing systems in the West are often designed around credit card or PayPal payments. However, in China, WeChat Pay and Alipay dominate the digital payment landscape. For foreign brands, this means that any automated marketing and e-commerce platform must integrate seamlessly with these payment methods. Moreover, Chinese consumers expect frictionless payment experiences, meaning that a poorly integrated system can deter purchases and hurt conversion rates.
E-commerce Giants: Tmall, JD.com, and Pinduoduo
Unlike Western markets where brands often drive traffic to their own websites, China’s e-commerce landscape is dominated by platforms like Tmall, JD.com, and Pinduoduo. These platforms have built-in advertising and marketing tools that require localized strategies. Foreign brands can’t simply apply their automated marketing techniques designed for Shopify or WooCommerce and expect the same success. Instead, they must familiarize themselves with the advertising options and algorithms unique to these Chinese platforms.
The Rise of Livestream Commerce
Livestreaming has become a massive driver of e-commerce sales in China. Platforms like Taobao Live and Douyin Live allow brands to engage directly with consumers through live broadcasts. This phenomenon does not have a direct equivalent in most Western markets, and automated marketing systems have not traditionally accounted for the real-time, dynamic nature of livestream commerce. Brands entering China need to consider how they can blend automated systems with the highly interactive nature of livestreaming.
5. Influencer Marketing: The Power of KOLs and KOCs
Influencer marketing in China operates differently than in the West, and foreign brands must adjust their automated marketing strategies accordingly. Key Opinion Leaders (KOLs) and Key Opinion Consumers (KOCs) play a pivotal role in shaping consumer perceptions, driving brand loyalty, and boosting sales.
KOLs vs. Western Influencers
While Western brands are familiar with working with influencers, the scale and impact of KOLs in China are unparalleled. KOLs often have millions of followers and wield significant influence over consumer purchasing decisions. Automated marketing strategies that don’t incorporate KOLs are likely to fall flat in China, where consumers trust the recommendations of their favorite influencers more than traditional brand messaging.
KOC Engagement for Authenticity
Key Opinion Consumers (KOCs) are micro-influencers who focus on authenticity and personalized engagement with their smaller audiences. They are highly trusted by their followers and can provide a grassroots approach to marketing that feels more genuine. For foreign brands, automating campaigns that involve KOCs requires a different approach compared to KOLs, as KOC engagement is more focused on community-building and long-term brand loyalty.
6. Marketing Automation in China: Customization Over Replication
At its core, the mistake many foreign brands make is assuming that marketing automation can be applied in a “one-size-fits-all” manner. While automation can streamline processes, the key to success in China is customization. The unique platforms, consumer behaviors, regulatory frameworks, and cultural nuances in China require that brands rethink how they use automation tools.
Localized Customer Journeys and Segmentation
In China, customer journeys often differ significantly from those in Western markets. Consumers are accustomed to engaging with brands through multiple touchpoints, from social media to e-commerce platforms and offline experiences. Automated systems must be adapted to reflect thesecomplex customer journeys. Brands need to map out localized customer journeys that reflect the ways Chinese consumers interact with different touchpoints and tailor their automated systems to deliver relevant content at each stage. For example, a customer who follows a brand’s WeChat official account may require different engagement tactics than one who first interacts with a brand through a livestream on Taobao Live.
Segmentation, too, needs to be localized. The broad audience categories that work for Western markets are often too generalized for China’s diverse consumer base. Automated marketing systems must account for factors such as regional differences, cultural preferences, and even the various spending power levels between Tier 1 and Tier 4 cities. Customizing automation workflows to these distinct segments will drive higher engagement and conversions.
Localization of Content Automation
Content automation—such as scheduling social media posts or email marketing campaigns—requires significant localization in China. For instance, Western brands may rely on global holiday promotions like Christmas or Black Friday for their automated campaigns. However, Chinese consumers respond to different events, such as Singles’ Day, Chinese New Year, or the Mid-Autumn Festival. It’s essential to adapt automated content calendars to these local holidays and cultural moments to stay relevant.
Furthermore, the tone and style of content must be adjusted. Chinese consumers often respond better to emotional, narrative-driven content that emphasizes harmony, trust, and family values, while overly direct or aggressive sales tactics can backfire. Brands should adjust automated content to reflect these local preferences, incorporating storytelling elements and emphasizing brand loyalty rather than just pushing products.
Adapting Email Marketing for WeChat
While email marketing is a staple of automated marketing in Western countries, it is far less effective in China, where consumers rarely rely on email for communication. Instead, WeChat serves as the primary platform for customer engagement, from messaging to promotions and customer service. Therefore, brands should shift their automated marketing efforts toward WeChat-based communication. Setting up automated workflows in WeChat, such as drip campaigns and engagement sequences, can help brands nurture customer relationships in a way that is culturally and practically appropriate for China.
7. Data-Driven Decision Making: Insights and Analytics in China
Data is the cornerstone of effective marketing automation, but the type of data available in China, and how it is collected and used, differs from many Western markets. To be effective, brands need to build strategies that align with the Chinese data landscape and comply with the country’s regulations.
The Power of First-Party Data
In China, leveraging first-party data is crucial due to restrictions on data sharing and the limited availability of third-party data compared to Western markets. Given the impact of the Personal Information Protection Law (PIPL), brands are under strict scrutiny regarding how they collect and use consumer data. This makes it more important than ever to build direct relationships with consumers through platforms like WeChat or through loyalty programs, gathering insights into their preferences, behaviors, and purchase history.
Automated systems should be designed to make the most of this first-party data, personalizing interactions based on deep consumer insights. For example, an automated workflow might send personalized promotions through WeChat based on a consumer’s previous purchases or browsing behavior. However, unlike in many Western markets, where third-party data might be readily available to supplement insights, brands in China must build and nurture their own data pools, making consumer engagement efforts even more critical.
Data Analytics Platforms in China
Google Analytics, a key tool for most Western marketers, is not accessible in China. Instead, brands need to use Chinese analytics platforms such as Baidu Analytics or local third-party solutions. These tools have different interfaces, metrics, and reporting capabilities. Automated systems must be adapted to pull data from these local sources and incorporate them into broader global reporting structures if necessary.
This also means that data-driven marketing strategies, from A/B testing to customer segmentation, will need to rely on locally generated insights. Foreign brands must ensure that their marketing automation tools are compatible with these analytics platforms and adjust their KPIs and success metrics based on the available data.
8. Omnichannel Approach: Offline and Online Integration
China is a leader in the integration of offline and online commerce, often referred to as new retail. In this environment, automated marketing systems must be able to bridge the gap between online and offline experiences seamlessly.
O2O (Online-to-Offline) Marketing
One of the key trends in China is O2O (Online-to-Offline) marketing, where consumers interact with brands across both digital and physical channels. Automated marketing strategies need to reflect this dynamic. For example, a customer may browse products online but prefer to complete the purchase in a physical store. Brands must automate personalized follow-up messages that encourage store visits, perhaps by offering time-sensitive discounts or rewards for in-store purchases.
Technologies such as QR codes play a major role in integrating the online and offline experiences. Consumers in China are accustomed to scanning QR codes to access promotions, menus, product information, or even make payments. Automated marketing systems should leverage this behavior by linking QR codes to automated workflows, enabling seamless transitions between online interactions and offline sales experiences.
AI-Driven Personalization in Offline Stores
Leading Chinese retailers are incorporating artificial intelligence to personalize the in-store shopping experience. For example, some stores use facial recognition to identify returning customers and offer tailored recommendations based on their previous purchases or browsing history. Automated marketing systems must be integrated into these AI-driven experiences, ensuring that customer data from online interactions is available to offline stores and vice versa.
9. Building a Strong Local Team and Partnerships
The complexity of the Chinese market means that foreign brands cannot succeed by relying solely on their global teams and existing resources. Local expertise is crucial to ensure that marketing automation systems are adapted properly.
Local Teams for Cultural and Technological Insight
Hiring a local marketing team in China is essential. These professionals understand the nuances of consumer behavior, the competitive landscape, and the ever-evolving digital ecosystem. A local team can help tailor automated marketing workflows to align with local preferences, manage relationships with key platforms, and ensure compliance with Chinese regulations.
Local teams can also provide real-time feedback on the performance of automated campaigns and recommend adjustments based on shifting consumer trends, new platform features, or emerging regulations. They serve as the bridge between the global strategy and local execution, ensuring that automation efforts are both effective and culturally appropriate.
Partnerships with Chinese Agencies and Service Providers
Many foreign brands also benefit from partnering with Chinese agencies or third-party service providers who specialize in digital marketing and e-commerce in China. These partnerships can help navigate the complexities of working with platforms like Tmall, WeChat, and Douyin, ensuring that automation systems are properly integrated with local tools and platforms.
Additionally, local service providers often have direct relationships with KOLs, media outlets, and key stakeholders, which can enhance the effectiveness of automated influencer campaigns or media buys. Partnering with local agencies can also reduce the time needed to launch campaigns and ensure that brands are always up-to-date with the latest developments in China’s fast-moving digital landscape.
Conclusion: Customization is Key to Success in China
The Chinese market is rich with potential for foreign brands, but it requires a fundamentally different approach to marketing, especially when it comes to automation. Brands that attempt to apply their global marketing automation strategies without adapting to China’s unique digital landscape, cultural nuances, regulatory environment, and consumer behaviors are setting themselves up for failure.
Success in China hinges on understanding the intricacies of local platforms like WeChat and Baidu, embracing cultural differences in messaging and consumer engagement, complying with China’s data privacy and censorship laws, and building robust partnerships with local experts. Marketing automation can still play a critical role in scaling operations and personalizing customer experiences, but it must be customized to meet the demands of the Chinese market.
For international brands looking to enter China, the most effective strategy is to treat the market as distinct—not just another extension of their global operations. With the right blend of localization, strategic adaptation, and partnerships, foreign brands can unlock the full potential of automated marketing in China, driving sustainable growth and long-term success.
Entering the Chinese market offers unparalleled opportunities for international luxury and fashion brands. With the rapid rise of China’s affluent middle class and an insatiable appetite for luxury goods, the country is a crucial destination for global brands. China now accounts for nearly one-third of the global luxury market, and this figure is expected to rise in the coming years.
However, succeeding in China’s luxury market is not as simple as replicating marketing strategies from the West. The Chinese digital ecosystem is unique, dominated by platforms like WeChat, Tmall, and Baidu, which function in ways entirely different from Facebook, Instagram, or Google. Consequently, marketing in China requires a completely different approach. One of the most powerful tools available to luxury and fashion brands is the Demand-Side Platform (DSP)—a technology that automates ad buying to target specific audiences with precision.
In this article, we’ll discuss why DSPs are crucial for international luxury and fashion brands entering the Chinese market. We’ll explore the key differences between China’s digital advertising environment and that of the West, and highlight the strategies that will allow brands to maximize the value of DSPs. With a focus on strategic, tactical, and practical insights, this article will serve as an essential guide for decision-makers and marketing professionals looking to establish or grow their luxury brand presence in China.
Understanding the Chinese Luxury Consumer: Why Precision Matters
1. Affluent Consumers with Unique Behaviors
Luxury consumers in China are significantly younger than their Western counterparts. While the average luxury consumer in the U.S. or Europe might be in their 40s or 50s, in China, they are often in their 20s and 30s. These consumers are highly engaged with digital media, spend a large portion of their time on mobile devices, and have high expectations for personalized, premium experiences.
Chinese luxury consumers are also deeply influenced by social media and key opinion leaders (KOLs). Rather than relying solely on traditional advertising, they turn to influencers, user-generated content, and reviews from their social networks when making purchasing decisions. Brands that want to reach these consumers must be present on the platforms they use, and DSPs are the perfect tool for ensuring their messages are targeted effectively.
2. Hyper-Segmented Market
China’s luxury market is diverse, with segments that vary greatly by region, income level, and personal preferences. For example, consumers in Tier 1 cities like Beijing and Shanghai might be looking for established global brands like Chanel or Louis Vuitton, while younger consumers in Tier 2 and Tier 3 cities might be more open to newer, niche luxury brands.
This hyper-segmentation requires luxury brands to have a detailed understanding of their target audience and to create highly customized marketing campaigns. DSPs offer the ability to do just that by using data to target specific audience segments based on their demographics, location, interests, and online behaviors.
Why DSPs Are Essential for Luxury Brands in China
1. Precision Targeting and Personalization
Luxury goods are not for mass consumption, and the consumers who buy them expect a highly personalized experience. DSPs enable luxury brands to target very specific audience segments with precision. For example, a brand can target high-net-worth individuals in Shanghai who are interested in specific product categories, such as watches, handbags, or shoes. DSPs allow brands to refine their targeting parameters continuously, ensuring that their ads are shown only to the most relevant audiences.
With DSPs, brands can also create personalized ads tailored to different segments of their audience. For example, a luxury brand could run a campaign showcasing its most exclusive collection to ultra-wealthy consumers, while promoting its entry-level products to aspirational buyers.
2. Cross-Platform Reach
One of the unique challenges of the Chinese digital ecosystem is that consumers are spread across a variety of platforms, including WeChat, Tmall, Douyin, and Baidu. Unlike in the West, where Facebook or Google Ads might cover the majority of a brand’s digital advertising needs, brands in China need to engage with consumers across multiple platforms to have a comprehensive reach.
DSPs allow luxury brands to run campaigns across a wide range of platforms while centralizing the management of their ad buys. For example, a DSP can help a brand run targeted ads on WeChat’s Moments, display ads on Baidu’s search results, and video ads on Douyin, ensuring maximum exposure across China’s fragmented digital landscape.
3. Real-Time Optimization and Flexibility
The ability to make real-time adjustments to campaigns is critical for luxury brands that want to maintain a sense of exclusivity and respond quickly to trends. For instance, a brand might notice that a particular product is performing well in Beijing but not in Guangzhou. With DSPs, the brand can reallocate its budget toward Beijing, or optimize its creatives for the Guangzhou market based on performance data.
Similarly, DSPs allow luxury brands to react quickly to unexpected events or shifts in consumer behavior. If a new fashion trend emerges or a KOL mentions the brand in a post, the brand can use DSPs to instantly amplify its message and take advantage of the increased visibility.
4. Integration with E-Commerce Platforms
In China, luxury brands are not just using DSPs to drive brand awareness; they are also using them to drive e-commerce sales. Platforms like Tmall and JD.com have become major channels for luxury goods, offering a controlled environment where brands can maintain their exclusivity while reaching a large audience.
DSPs can be integrated with these e-commerce platforms, allowing luxury brands to target consumers who have shown an interest in their products and drive them to make a purchase. For example, if a consumer has browsed a luxury brand’s product page on Tmall but has not completed a purchase, the brand can retarget that consumer with a personalized ad through a DSP, reminding them of the product and offering an exclusive promotion to encourage conversion.
5. Leveraging Data for a Competitive Edge
One of the greatest advantages of using DSPs in China is the access to vast amounts of data. Luxury brands can use data from multiple sources to build detailed profiles of their target audience and tailor their messaging accordingly.
For instance, DSPs can analyze consumer behavior on social media platforms, e-commerce sites, and search engines to identify which consumers are most likely to purchase luxury products. By leveraging this data, brands can create highly targeted campaigns that speak directly to their audience’s preferences and purchasing behaviors.
Strategies for Using DSP in the Chinese Luxury Market
1. Invest in High-Quality Creative
In the luxury market, creative excellence is non-negotiable. Chinese consumers expect high-quality visuals and premium content from luxury brands. To maximize the effectiveness of DSP campaigns, brands must invest in high-quality creative assets that reflect their brand’s image and resonate with their target audience.
This could include professionally shot videos, interactive rich media ads, or personalized dynamic ads that showcase the brand’s products in a luxurious, aspirational way. Given the importance of social media and visual platforms in China, brands should also consider working with KOLs to create authentic content that enhances their DSP campaigns.
2. Combine Branding and Performance Marketing
Traditionally, luxury brands have focused more on brand-building campaigns rather than performance marketing. However, in China, there is an opportunity to combine both approaches through DSPs. Luxury brands can use DSPs to build brand awareness through top-of-funnel activities, such as running video ads on Douyin or display ads on WeChat Moments, while also using DSPs to drive e-commerce sales by retargeting consumers who have engaged with their brand.
By combining branding and performance marketing, luxury brands can create a full-funnel approach that not only enhances brand equity but also drives measurable business outcomes.
3. Utilize Geo-Targeting for Tiered City Strategies
China’s luxury market is not uniform, with different consumer behaviors and preferences across Tier 1, Tier 2, and Tier 3 cities. For example, consumers in Tier 1 cities like Beijing, Shanghai, and Shenzhen may already be familiar with global luxury brands, while those in Tier 2 and Tier 3 cities might be experiencing these brands for the first time.
Luxury brands can use DSPs to create tiered city strategies, tailoring their messaging and targeting for different regions. For example, a brand could run campaigns in Tier 1 cities that focus on exclusive, limited-edition collections, while in Tier 2 and Tier 3 cities, the focus might be on introducing the brand and promoting more accessible products.
4. Optimize for Mobile Consumers
China is a mobile-first country, with the vast majority of digital interactions happening on smartphones. Luxury brands must ensure that their DSP campaigns are optimized for mobile devices, with responsive ad formats that look stunning on small screens. Interactive ad formats, such as swipeable carousels or short-form video ads, work particularly well on platforms like WeChat and Douyin, where mobile engagement is high.
Additionally, mobile DSP campaigns can incorporate location-based targeting to reach consumers who are near luxury retail stores or premium shopping districts, driving foot traffic and in-store purchases.
5. Align Campaigns with Key Cultural Moments
In China, certain cultural moments and festivals, such as Chinese New Year, Singles’ Day, and Golden Week, are critical opportunities for luxury brands to engage with consumers. These periods often see a spike in luxury spending as consumers look to treat themselves or buy gifts for loved ones.
Luxury brands should align their DSP campaigns with these key moments, using data to anticipate consumer demand and create timely, relevant ads that resonate with their audience. For example, a luxury watch brand could run a campaign during Singles’ Day offering limited-time promotions on select items, while a high-end fashion brand could launch a Chinese New Year collection featuring ads that highlight cultural motifs.
Case Studies: Luxury Brands Successfully Using DSP in China
Case Study 1: Burberry’s Digital Transformation in China
Burberry, one of the most iconic British luxury fashion brands, has been a pioneer in leveraging DSPs and digital tools to engage Chinese consumers. Recognizing the importance of being digitally savvy in China, Burberry was one of the first luxury brands to launch a flagship store on Tmall. The brand used DSPs to target affluent Chinese consumers with personalized ads across multiple platforms, including WeChat and Douyin.
By integrating its DSP campaigns with e-commerce platforms like Tmall and JD.com, Burberry was able to create a seamless experience for consumers, from awareness to purchase. The brand also worked with KOLs to create exclusive content that was amplified through its DSP campaigns, helping Burberry strengthen its digital presence and drive e-commerce sales.
Case Study 2: Cartier’s Cross-Platform Strategy
Cartier, the French luxury jeweler, has successfully utilized DSPs to reach Chinese luxury consumers across multiple platforms. Recognizing that its target audience is active on WeChat, Douyin, and other Chinese platforms, Cartier used DSPs to run targeted campaigns that featured high-quality video content showcasing its latest collections.
By using DSPs to segment its audience and deliver personalized messages to different consumer groups, Cartier was able to build brand awareness while driving traffic to its online and offline stores. The brand’s DSP campaigns were also integrated with its Tmall flagship store, allowing consumers to easily make purchases online after engaging with Cartier’s ads.
Conclusion
For international luxury and fashion brands, DSPs are not just an option—they are a necessity for succeeding in China’s competitive and complex market. The ability to target specific audience segments with precision, optimize campaigns in real-time, and deliver personalized ads across multiple platforms makes DSPs a powerful tool for luxury brands looking to build awareness and drive sales in China.
As the Chinese luxury market continues to grow, brands that invest in sophisticated digital tools like DSPs will be best positioned to capture the attention of affluent Chinese consumers and build long-term brand loyalty. By aligning their strategies with the unique behaviors and preferences of Chinese luxury shoppers, brands can ensure their success in one of the most lucrative markets in the world.
As international companies continue to expand into the Chinese market, one industry that offers enormous potential is travel and tourism. China’s rapidly growing middle class, increasing appetite for travel, and strong digital infrastructure make it a promising destination for travel businesses. However, tapping into this market comes with its challenges, particularly when it comes to digital marketing.
In China, the digital landscape is unique and requires specialized strategies that are different from those used in other global markets. One powerful tool that travel businesses can leverage to reach their target audience is demand-side platforms (DSPs). DSPs allow brands to automate and optimize ad buying in real-time, using data to ensure ads are shown to the right people at the right time.
This article will explain why running a travel business in China requires DSPs, highlight the specific advantages they bring to the travel industry, and provide actionable strategies for international brands looking to enter the Chinese market. We will also explore key differences between China’s DSP market and those in other parts of the world and share insights on how to create successful campaigns tailored to the Chinese traveler.
The Chinese Travel Market: A Booming Opportunity
1. Growth of the Chinese Middle Class
China’s middle class has been growing steadily, and with it, the demand for both domestic and international travel has surged. According to a McKinsey report, over 400 million Chinese will belong to the middle class by 2025, and many of them will have the disposable income to spend on travel. This growing affluence has made China the world’s largest outbound travel market, with Chinese tourists spending more than $277 billion overseas in 2019 alone.
For international travel companies, this means an enormous opportunity to capture the attention of a rapidly expanding consumer base that is eager to explore new destinations. However, reaching these consumers requires understanding their digital habits, which differ significantly from those in Western markets.
2. China’s Digital Ecosystem: A Unique Landscape
The Chinese digital ecosystem is unlike any other in the world. Global platforms like Google, Facebook, and Instagram are blocked in China, while domestic platforms such as WeChat, Baidu, and Douyin (TikTok’s Chinese counterpart) dominate the market. These platforms have built closed ecosystems that integrate social media, messaging, e-commerce, and more, providing advertisers with powerful tools to reach targeted audiences.
Travel businesses looking to market to Chinese consumers must navigate this complex digital landscape and develop tailored strategies to reach their target audience. This is where DSPs come into play.
Why DSPs are Essential for the Travel Industry in China
1. Precision Targeting for a Fragmented Audience
One of the key advantages of using DSPs in China is the ability to precisely target specific audience segments. The travel industry caters to a wide range of travelers with different preferences, including business travelers, families, young millennials, and luxury vacationers. DSPs allow travel companies to use data to segment their audience based on behavior, interests, and demographics, ensuring that their ads are shown to the right people.
For example, a DSP campaign can target young professionals who are likely to book quick weekend getaways, or families looking for vacation packages during national holidays. With DSPs, travel businesses can reach these fragmented audiences across various platforms such as WeChat, Baidu, and online travel agencies (OTAs) like Ctrip and Qunar.
2. Real-Time Optimization and Flexibility
The travel industry is highly dynamic, with frequent changes in pricing, availability, and consumer preferences. DSPs allow travel companies to optimize their ad campaigns in real time, adjusting bids, creatives, and targeting parameters based on performance data.
For instance, a hotel chain running a DSP campaign during peak travel seasons can increase bids for high-value audiences who are more likely to book. Likewise, if an airline notices that a particular route is underperforming, they can shift their ad budget to other routes or destinations that are seeing higher demand.
Real-time optimization ensures that travel brands can be agile in their marketing efforts, making adjustments on the fly to maximize their return on investment (ROI).
3. Data-Driven Insights for Personalized Campaigns
Personalization is critical in the travel industry. Chinese consumers expect tailored experiences, whether they are booking a flight, choosing a hotel, or planning an itinerary. DSPs provide travel businesses with the data-driven insights needed to create highly personalized campaigns.
For example, an international airline can use DSPs to target Chinese consumers who have shown an interest in European destinations by serving them ads with flight deals to Paris or Rome. Similarly, a luxury hotel chain can target affluent travelers by showcasing premium suites and exclusive packages.
By using DSPs, travel companies can leverage first-party data from their own platforms, as well as third-party data from DSP providers, to deliver personalized ads that resonate with individual consumers’ preferences and travel aspirations.
4. Multi-Platform Reach in a Closed Ecosystem
China’s digital landscape is dominated by a few large platforms, each with its own ecosystem. Tencent’s WeChat, Alibaba’s Tmall, Baidu, and ByteDance’s Douyin are examples of closed ecosystems where users engage in everything from social networking to shopping and content consumption.
DSPs in China offer travel businesses the ability to reach audiences across multiple platforms within these ecosystems. For instance, a travel brand can run programmatic ads on WeChat Moments (the equivalent of Facebook’s news feed), display ads on Baidu search results, and video ads on Douyin, all through a single DSP. This multi-platform reach ensures that travel companies can engage consumers at different touchpoints throughout their decision-making journey.
Key Strategies for Using DSPs in China’s Travel Industry
1. Understand Consumer Travel Behavior
Before launching a DSP campaign, it’s crucial for travel brands to understand the behavior of Chinese travelers. China’s travel market is highly seasonal, with peak travel periods such as Chinese New Year, Golden Week, and the summer holidays. During these times, demand for flights, hotels, and travel packages skyrockets, and DSP campaigns need to be strategically timed to capitalize on this surge in interest.
Additionally, the rise of “free independent travelers” (FITs) in China—who prefer to plan their own trips rather than join group tours—means that personalized marketing is more important than ever. DSPs enable travel companies to target FITs with customized offers based on their browsing and booking behavior.
2. Collaborate with Local Platforms and Agencies
Navigating the Chinese digital ecosystem can be challenging for foreign brands unfamiliar with the nuances of platforms like WeChat and Baidu. Partnering with local platforms or agencies that specialize in DSP advertising can help international travel companies launch effective campaigns in China.
For example, travel brands can collaborate with Tencent to access WeChat’s vast user base and use its DSP capabilities to run targeted ads on Moments and mini-programs. Similarly, partnering with Baidu can provide access to valuable search data, allowing travel companies to run programmatic ads that target consumers searching for specific destinations or travel services.
3. Leverage First-Party and Third-Party Data
Data is the foundation of any successful DSP campaign. Travel brands should make use of both first-party data (from their own websites, booking platforms, and CRM systems) and third-party data provided by DSP providers.
For instance, an international hotel chain can use its own customer data to retarget past guests with personalized offers, while also using third-party data to identify new potential customers based on their online behavior. This combination of data sources allows travel businesses to create highly targeted campaigns that drive bookings and conversions.
4. Optimize for Mobile-First Consumers
China’s internet users are overwhelmingly mobile-first, with over 98% of the population accessing the internet through their smartphones. For travel businesses, this means that DSP campaigns must be optimized for mobile devices, with ad formats that are designed to engage mobile users.
Mobile-friendly formats such as in-feed ads, video ads, and interactive ads work particularly well on platforms like WeChat and Douyin. Additionally, travel brands should consider leveraging mobile-specific features like location-based targeting, which can be used to promote nearby attractions or last-minute deals to consumers on the go.
5. Align with Major Travel and Shopping Events
China has several key travel and shopping events that present significant opportunities for travel businesses to launch DSP campaigns. Events like Singles’ Day (11.11), Double 12 (12.12), and 618 Shopping Festival are not only major e-commerce events but also times when consumers plan and book travel.
Travel companies should align their DSP campaigns with these events, using them as opportunities to promote special offers, limited-time deals, and exclusive travel packages. By strategically timing campaigns around these high-traffic periods, travel brands can maximize their reach and drive higher conversions.
Case Studies: Success Stories of DSP in China’s Travel Industry
Case Study 1: Marriott International’s Personalized DSP Campaign
Marriott International is a prime example of a travel brand that has successfully leveraged DSP advertising in China. To promote its hotel properties across China, Marriott used Tencent’s DSP to run personalized ads on WeChat Moments. The campaign targeted users based on their travel history, search behavior, and social interactions, serving them tailored hotel offers based on their preferences.
By using data-driven insights to create personalized ads, Marriott saw a significant increase in engagement and bookings, particularly among young, affluent travelers looking for premium hotel experiences.
Case Study 2: Ctrip’s Retargeting Campaign
Ctrip, one of China’s leading online travel agencies (OTAs), used DSP advertising to retarget consumers who had browsed specific travel destinations but hadn’t completed their bookings. By using Baidu’s DSP, Ctrip was able to serve dynamic ads featuring the exact destinations and travel packages that users had previously viewed.
This retargeting strategy proved highly effective, driving a significant increase in bookings for Ctrip, particularly during peak travel seasons like Golden Week and Chinese New Year.
Conclusion
The travel industry in China presents a unique set of opportunities and challenges for international brands. While the market is booming, success requires a deep understanding of China’s digital landscape and the use of sophisticated tools like DSPs to reach the right audience at the right time.
DSPs offer travel businesses the ability to target specific consumer segments, optimize campaigns in real-time, and deliver personalized ads across multiple platforms. By leveraging these capabilities, international travel companies can tap into China’s vast and lucrative travel market, driving growth and long-term success.
For decision-makers and marketing leaders, the strategic and operational advantages of using DSPs in China are clear. As you plan your entry or expansion into this dynamic market, incorporating DSPs into your marketing strategy will be essential to achieving your goals.
As international companies seek to tap into the vast Chinese market, understanding the most effective advertising tools and platforms is crucial. One tool that has gained popularity is demand-side platforms (DSP). However, the digital landscape in China is vastly different from that in international markets, requiring brands to adapt their strategies to local nuances.
DSPs are widely used in global markets for programmatic advertising, allowing advertisers to automate the buying of ad space across various platforms. While this technology exists in China, there are significant differences in how it operates compared to Western counterparts, making it important for foreign brands to carefully assess how to use DSPs in the Chinese market.
This article explores which industries benefit most from DSP advertising in China, identifies key differences between Chinese and international DSP ecosystems, and provides insights on how brands can strategically and practically harness the power of DSPs to drive successful advertising campaigns in China.
Understanding the Chinese DSP Ecosystem
1. Key Differences Between Global and Chinese DSP Markets
Foreign brands accustomed to DSPs like The Trade Desk or Google Display & Video 360 in international markets will quickly discover that China operates with its own unique set of DSPs. Due to China’s regulatory environment and unique internet ecosystem (largely dominated by domestic giants such as Alibaba, Tencent, and Baidu), foreign DSP providers have limited market penetration.
Local DSP Players: China’s DSP market is controlled by local giants like Tencent’s Ad Network, Baidu DSP, Alibaba’s TANX (Taobao Advertising Network Exchange), and ByteDance’s Ocean Engine. These platforms are often integrated with larger ecosystems and touchpoints, such as e-commerce, social media, and mobile apps, allowing for extensive user data aggregation.
Audience Data and Privacy: In contrast to Western markets, where third-party cookies are widely used for tracking, China relies heavily on first-party data, with large tech companies like Tencent and Alibaba accumulating vast amounts of user information from within their closed ecosystems. This creates a highly targeted advertising environment but also requires advertisers to navigate data privacy regulations such as China’s Personal Information Protection Law (PIPL).
Programmatic Landscape: Chinese DSPs also often emphasize full-service offerings, integrating with social platforms (like WeChat), video platforms (like Douyin), and e-commerce ecosystems (like Taobao). This makes DSPs in China highly versatile, but foreign brands need to ensure their content is adapted to these platforms’ unique formats and user behaviors.
2. When Does DSP Make Sense in China?
Not all industries benefit equally from using DSPs in China. The effectiveness of DSP advertising is closely tied to the nature of the product or service, the target audience, and the goals of the brand’s advertising campaigns. Below are the industries best suited for DSP-driven strategies in China:
Industries That Benefit from DSP Advertising in China
1. Luxury and Fashion
China is one of the largest luxury goods markets in the world, with a fast-growing middle and upper class that has a strong appetite for luxury brands. In the fashion and luxury industry, precision targeting and personalized messaging are crucial for reaching affluent consumers. DSPs enable luxury brands to leverage first-party data from platforms like Tmall, WeChat, and Douyin, ensuring that their ads are shown to the right audience segments—whether that’s high-net-worth individuals or trend-following millennials.
Why DSP Works:
Access to premium audiences via closed ecosystems (WeChat, JD.com).
Data-driven targeting that matches affluent consumer profiles.
Ability to integrate with e-commerce touchpoints like live-streaming and direct purchasing.
Example: Dior used a combination of WeChat Ads and programmatic buying through local DSPs to drive sales during key shopping festivals like Singles’ Day. The brand used highly targeted campaigns to reach its core customer base in China’s first-tier cities, achieving significant returns.
2. E-Commerce and Retail
E-commerce dominates China’s online shopping landscape, with platforms like Tmall, Taobao, JD.com, and Pinduoduo playing key roles. DSPs are particularly effective for international brands in the retail and e-commerce space looking to gain visibility on these massive platforms.
Why DSP Works:
Direct integration with major Chinese e-commerce platforms.
Real-time optimization of ads based on sales data.
Ability to retarget customers with personalized offers based on browsing and purchasing behavior.
Example: Nike China leveraged Alibaba’s DSP to promote new product lines during major shopping events. By using data-driven targeting, Nike was able to segment its audience based on browsing and purchasing history, leading to a significant uplift in sales during campaigns.
3. Automotive Industry
The automotive industry has seen exponential growth in China, especially in the electric vehicle (EV) sector. DSPs provide car brands with the ability to target potential customers based on their online behavior, whether they are researching vehicles, watching automotive-related content on Douyin, or engaging with car enthusiast communities on WeChat.
Why DSP Works:
Ability to reach consumers across multiple platforms, from video to social to search.
Geo-targeting capabilities to focus on consumers in cities with high car ownership rates.
Integration with video platforms to showcase ads in premium automotive content.
Example: Tesla used Baidu’s DSP to run programmatic campaigns that targeted high-income urban dwellers interested in sustainable vehicles. By leveraging Baidu’s search data, Tesla was able to reach consumers who were actively researching electric vehicles and drive them to the company’s local stores.
4. Tourism and Travel
China’s growing middle class and increasing disposable income have fueled a booming domestic and outbound tourism market. For foreign brands in the travel and hospitality industry, DSP advertising is a powerful tool to capture Chinese travelers looking for international experiences.
Why DSP Works:
Ability to target specific consumer segments, such as affluent travelers, adventure seekers, or family vacation planners.
Geo-targeting to promote international destinations to Chinese travelers.
Dynamic ad formats that can display personalized offers based on the user’s previous travel searches or bookings.
Example: Marriott International used programmatic buying through Tencent’s DSP to target Chinese tourists planning vacations abroad. The campaign included personalized recommendations based on users’ travel preferences and previous searches, significantly increasing hotel bookings from Chinese travelers.
5. Tech and Electronics
The technology and electronics industry thrives on innovation and early adoption, making it essential for brands to reach tech-savvy consumers in China. DSPs allow these companies to showcase their latest products to a young, digital-native audience that frequently interacts with tech-related content across multiple platforms.
Why DSP Works:
High-level targeting capabilities to reach digital natives interested in the latest technology trends.
Retargeting potential customers who have engaged with product ads or visited e-commerce stores.
Integration with video platforms to showcase product demos and reviews.
Example: Huawei used ByteDance’s Ocean Engine DSP to promote its new line of smartphones to younger audiences. The campaign included video ads on Douyin, interactive product demos, and personalized offers, leading to a significant boost in sales.
Key Strategies for Foreign Brands Using DSP in China
1. Adapt Content to Local Platforms
While DSPs automate the process of buying ad space, foreign brands must tailor their content to align with the unique user experience of Chinese platforms. For example, video content on Douyin (China’s TikTok) requires shorter, more dynamic storytelling, while WeChat’s feed ads benefit from a more interactive approach.
2. Leverage Data from Closed Ecosystems
The closed nature of platforms like Tencent and Alibaba provides a wealth of first-party data. Brands should collaborate with local DSPs to tap into these data streams and target consumers based on precise behavioral and transactional data. This will help foreign companies avoid the pitfalls of cookie-based tracking that is more common in international DSP markets.
3. Maximize Mobile-First Advertising
China’s digital environment is mobile-first, with over 98% of internet users accessing content via smartphones. DSP campaigns must prioritize mobile ad formats, such as interactive video and in-feed ads that are optimized for mobile consumption.
4. Align with Local Shopping Festivals
To drive conversions, foreign brands should align their DSP campaigns with China’s major shopping festivals, such as Singles’ Day (11.11), 618, and Chinese New Year. By strategically timing DSP campaigns around these high-traffic periods, brands can maximize reach and engagement.
Conclusion
The advertising landscape in China presents unique opportunities and challenges for foreign brands. DSP advertising, while effective, requires a localized approach that takes into account the differences between the Chinese and global digital ecosystems. Industries such as luxury, retail, automotive, tourism, and tech are particularly well-suited to DSP-driven strategies, but success hinges on adapting content, leveraging first-party data, and focusing on mobile-first, localized tactics.
By following the strategies outlined above, foreign companies can effectively navigate China’s digital advertising space, driving greater engagement, conversions, and brand growth.
Digital Signal Processing (DSP) has emerged as a critical technology in various fields, including telecommunications, electronics, audio processing, and artificial intelligence. In China, DSP technology has undergone rapid development, driven by advancements in research, manufacturing capabilities, and market demands. This article will explore the history, current state, and future trends of DSP technology in China.
1. The Early Development of DSP in China
The development of DSP technology in China can be traced back to the late 20th century when the country began to recognize the importance of digital signal processing in telecommunications and electronics. In the 1980s, China started to import DSP chips and began research in this field, mainly relying on foreign technology from companies like Texas Instruments and Analog Devices.
By the early 1990s, Chinese universities and research institutions started focusing on the theoretical aspects of DSP. Notable academic centers such as Tsinghua University and the Chinese Academy of Sciences played a key role in laying the groundwork for DSP technology by contributing to both hardware and algorithm research. Early applications of DSP in China were primarily in the fields of radio communication and image processing.
However, China’s DSP industry was largely dependent on imported technologies for most of the 1990s, and domestic development lagged behind international counterparts. Nevertheless, this period laid the foundation for future growth by training a generation of engineers and researchers.
2. The Rise of DSP in the 2000s
The 2000s saw a significant shift in China’s DSP development. The rapid growth of telecommunications, especially with the expansion of 3G and 4G networks, created a huge demand for DSP solutions. Domestic companies began to invest heavily in R&D, and government support for the semiconductor industry accelerated the growth of DSP capabilities.
China began developing its own DSP chips, with companies like HiSilicon (a subsidiary of Huawei), Spreadtrum (now UNISOC), and Allwinner Technology entering the scene. These companies started producing competitive DSP chips for mobile phones, routers, and consumer electronics. By the mid-2000s, China had made notable strides in catching up with global leaders, although the country was still reliant on foreign DSP core technologies for the most part.
Another key area of development during this period was the increasing use of DSP in consumer electronics. From audio devices to video codecs, Chinese manufacturers were able to integrate DSP technology into a variety of applications, making it accessible to a wider market.
3. Current State of DSP in China
As of today, China’s DSP technology is highly advanced and continues to grow rapidly. Several trends characterize the current landscape of DSP development in China:
a. Self-reliance and Localization
China has intensified its efforts to develop indigenous DSP technology, especially as geopolitical tensions have led to restrictions on the import of key semiconductor technologies from the U.S. Companies like Huawei have increased their focus on developing homegrown DSP chips, such as the Kirin series, which incorporate custom-designed DSP components for signal processing in telecommunications and AI applications. This trend is part of China’s broader effort to achieve technological self-reliance, particularly in the semiconductor industry.
b. AI and Machine Learning Integration
With the rapid rise of artificial intelligence and machine learning, DSP has found new applications in AI-driven solutions, such as natural language processing (NLP), computer vision, and smart home devices. Chinese companies are at the forefront of integrating DSP with AI, particularly in areas like voice recognition, image processing, and autonomous driving technologies. Major Chinese tech firms, including Baidu, Alibaba, and Tencent, are leveraging DSP for AI-driven applications, optimizing performance through custom chips and algorithms.
c. 5G and IoT Expansion
The deployment of 5G networks has created a new demand for sophisticated DSP systems that can handle massive amounts of data with low latency. Chinese telecom giants such as Huawei and ZTE are using DSP to enhance network performance, reduce energy consumption, and enable real-time communication in 5G-enabled Internet of Things (IoT) devices. DSP plays a crucial role in managing the data traffic and signal quality in these high-speed networks.
d. Growing Domestic DSP Ecosystem
China’s domestic DSP ecosystem has expanded significantly. In addition to established players like HiSilicon and UNISOC, many smaller firms and startups are entering the market, focusing on niche DSP applications in automotive, medical devices, and industrial automation. Government-backed initiatives have encouraged more domestic chip manufacturing, helping to foster innovation and reduce dependency on imports.
4. Future Trends of DSP in China
The future of DSP technology in China is promising, with several key trends likely to shape its development:
a. Advancements in 6G and Beyond
As the world looks towards 6G, China is positioning itself as a leader in next-generation communication technologies. DSP will play a pivotal role in enabling ultra-high-speed data transmission and real-time processing required by 6G networks. Chinese companies are already investing in R&D for 6G technologies, which are expected to be operational by 2030. In addition to communications, 6G will drive advancements in autonomous vehicles, AI, and virtual/augmented reality, all of which will rely on advanced DSP capabilities.
b. AI-Optimized DSP Architectures
The intersection of AI and DSP will continue to grow, with more specialized DSP architectures designed to accelerate AI workloads. Neural DSP chips, which combine traditional signal processing with neural network processing, will become increasingly common. Chinese firms are likely to innovate in this area as AI-driven applications like facial recognition, smart cities, and robotics demand faster and more efficient processing solutions.
c. Green DSP for Energy Efficiency
With the growing concern for environmental sustainability, there will be a stronger emphasis on developing energy-efficient DSP technologies. This “green DSP” movement will focus on reducing power consumption in data centers, IoT devices, and communication networks. Chinese researchers and companies are likely to prioritize this aspect, especially in light of China’s commitment to carbon neutrality by 2060.
d. Collaboration with Global Standards
China is expected to continue its active role in shaping global standards for DSP technology, particularly through organizations like the International Telecommunication Union (ITU) and the Institute of Electrical and Electronics Engineers (IEEE). By contributing to and influencing global DSP standards, China will ensure its technologies are aligned with international norms, while also promoting its own innovations on the world stage.
Conclusion
China’s journey in DSP technology, from its early dependence on foreign imports to its current status as a key player in global DSP development, is a testament to the country’s rapid technological advancement. With a strong focus on self-reliance, AI integration, and next-generation communication technologies, China is poised to be a major force in the future of DSP. As industries like telecommunications, automotive, and healthcare continue to evolve, DSP will remain at the heart of innovation in China, driving the next wave of technological breakthroughs.
Programmatic advertising refers to the practice of automating media buying and creating digital ads with the use of marketing technology. For an effective programmatic advertising strategy, use an automated workflow to effectively deliver ads to your audience.
What is programmatic advertising?
Programmatic advertising is the use of advertising technology to buy and sell digital ads. Programmatic advertising serves up relevant ad impressions to audiences through automated steps, in less than a second.
Programmatic advertising uses an automated process, within advertiser-defined parameters, to purchase digital ad inventory across the web, mobile, apps, video, and social media. Programmatic advertising uses workflow automation and machine learning algorithms to deliver the most effective ads to audiences based on a variety of signals, like shopping patterns.
Programmatic ad buying takes place when consumers click on a publisher’s website, and the publisher puts the ad impression up for auction through header bidding and one or more SSPs. Then, the DSP bids on behalf of the advertiser for that impression based on campaign’s strategies, budget, creative sizes, and other factors. The publisher automatically assigns impressions to the winning bidder—the advertiser/DSP offering the highest CPM (cost per mille, or the cost per one thousand advertising impressions). The ad is instantly served on the website.
What is programmatic media buying?
Programmatic media buying uses an automated process to buy digital space for ads. Programmatic media buying also cuts down on wasted ad impressions by serving ads to relevant audiences and minimizing ad fraud risk—making it cost-efficient, as well.
Why is programmatic advertising important?
Programmatic advertising is important because it can save time in the creation of your ads and campaigns. Not only does it automate the process, it analyzes your campaign performance to help you optimize for success.
What is the difference between programmatic advertising and display ads?
Display ads could be a type of programmatic ad. While display ads are the ads themselves, programmatic advertising is the process of distributing these ads. Display advertising is also a type of digital advertising, but it does not necessarily need to be programmatic.
What are the benefits of programmatic advertising?
Traditional advertising requires time to develop requests for proposals (RFPs) and quotes, conduct negotiations, and create insertion orders. With programmatic, the process is more streamlined. Advertisers can buy and place ads quickly through Real-Time Bidding (more on that later).
2. Reach
Programmatic allows advertisers to reach audiences based on different marketing signals, such as shopping and browsing activity across devices.
3. Transparency
With traditional media buying, ads are purchased in bulk and advertisers have little control over the inventory and placement. With programmatic advertising, advertisers know where their ads will appear and can have greater confidence that they’ll show up in relevant brand environments.
4. Measurement
Programmatic offers real-time measurement and optimization to drive maximum results.
What are the challenges of programmatic advertising?
Potential challenges with programmatic advertisng include commoditization, transparency, and a steep learning curve. Despite the potential challenges, brands that don’t adopt to programmatic advertising strategies may be missing out on the benefits of efficiency, reach, transparency, and accountability.
1. Commoditization
As with other forms of media, programmatic is commoditized. Everyone is playing in the same space and some types of ad supply may be scarce. With the growing popularity of Programmatic Guaranteed, an increasing amount of non-commoditized inventory is becoming available to advertisers programmatically.
2. Transparency
While programmatic provides advertisers with greater control over viewability and where their ads appear, brand safety and transparency remain top-of-mind for advertisers. Amazon Ads and many third-party solutions address these concerns to help preserve brand trust.
3. Learning curve
Programmatic requires a learning curve that may initially feel overwhelming. Working with partners, agencies, or Amazon Ads directly can help advertisers to ease their foray into programmatic.
What is a demand-side platform?
A demand-side platform (DSP) is programmatic software for advertisers. A DSP helps facilitate media buying from numerous publishers through SSPs, ad exchanges, ad networks, and direct integrations. DSPs help brands and agencies (the demand side) determine which impressions to buy and at what price (the supply side). Advertisers can select audiences based on demographics, shopping patterns, browsing behavior, and many other signals.
What is a supply-side platform?
A supply-side platform (SSP) is programmatic software for publishers to facilitate sales of advertising impressions via ad exchanges. By connecting publishers with multiple ad exchanges, demand-side platforms, and networks at once, SSPs let suppliers sell impressions to a greater pool of potential buyers, and allows suppliers to set the bidding range to maximize their revenue.
What is Real Time Bidding (RTB)?
Real-time bidding (RTB) is a way to buy ads programmatically. With RTB, advertisers can participate in an auction when an impression becomes available. If their bid wins the auction, their ad is displayed instantly on the publisher’s site. RTB is not only efficient, but it helps advertisers focus on the most relevant inventory.
What is header bidding?
Header bidding is a technology that allows publishers to simultaneously request bids from multiple demand sources and send the bids to their ad server to conduct an auction. The ad server determines the winning bid and renders the ad on the site. Allowing multiple bidders to bid on the same inventory at the same time increases competition, but offers advertisers the opportunity to access premium inventory with these publishers.
What is an ad exchange?
In programmatic advertising, an ad exchange is an online marketplace where advertisers, agencies, demand-side platforms, publishers, and supply-side platforms can bid on advertising inventory from various publishers using RTB. Advertisers determine the price by participating in the bidding process. Additionally, with an ad exchange, advertisers gain visibility regarding where their ads will appear.
How do I run programmatic ads?
Once you’ve established your campaign goals, such as driving new product discovery or increasing sales; defined your ad types, such as display, video ads, or in-app ads; and have set up the DSP, you’re ready to get started.
To maximize your impact at the lowest cost, think about the various components of your campaign setup, such as duration and audience size, as this will help determine the CPMs you need to win your bid. At this stage, you can estimate the budget you need for the campaign and develop a bidding strategy.
CPM bid levels vary by media types and creative units. Generally, display demands the lowest CPMs whereas video demands the highest CPMs.
With programmatic advertising, you have the opportunity to evaluate campaign and creative effectiveness mid-campaign through reporting on metrics such as CTR, CPC, overall spend, and conversions. You can then optimize your campaign based on these insights.
How much does programmatic advertising cost?
The cost of programmatic advertising varies and is generally based on CPM. CPMs range in price based on who you’re trying to reach, supply settings, advertising budget, and the amount of time the campaign has to run. Adjusting these factors will change the end price for the campaign.
For example, holding everything else constant, when you’re reaching a broad audience, the CPM is typically less than when you are trying to reach a more niche audience. Targeting and ad group variables impact the CPMs required to secure inventory. With programmatic, advertisers are charged prices through RTB.
How do I measure programmatic advertising?
Impressions, clicks, and actions are three main ways to measure your programmatic advertising campaign, but they are just starting points. You can also measure key performance indicators (KPIs) that map back to your business objectives. Below is a helpful guide; utilize the metrics and OKRs most relevant to your objective:
Goal
KPIs
Branding and awareness – What is x?
Reach/unique reach, average frequency, share of voice, brand lift, views
Interest and consideration – I want to know more about x.
Open marketplaces are also known as RTB. This is a type of programmatic advertising where bids are placed for ad space and impressions.
2. Private marketplaces
Private marketplaces are by invitation only. Advertisers can place their ads after receiving placement options from publishers.
3. Preferred deals
Preferred deals are given priority placement. This type of advertising is a joint collaboration between ad sellers and publishers on the placement or impressions.
4. Programmatic guaranteed
Programmatic guaranteed advertising promises a certain amount of impressions for your ads. This is decided manually, without bidding.
Bajaj Finserv and their media agency, Arm Worldwide, worked with Amazon Ads to identify relevant audiences for their Insta EMI card. Once they were ready, they created a campaign with display ads from Amazon DSP, which would direct consumers to an Insta EMI application webpage where they could learn more.
Lenovo worked with Amazon Ads on strategic campaigns and high-impact placements to help them connect with the growing gaming community in the UAE. They used Amazon DSP video, display banners, and more to showcase their cutting-edge laptop devices.
Groupe SEB, a manufacturer of domestic appliances and cookware, used Amazon DSP campaigns across both Amazon-owned and third-party supply networks. This helped them to engage audiences and bring them relevant products, while also driving ROAS.
Reckitt, a producer of health, hygiene, and home products, worked with Amazon Ads and their local agency Cadastra to create campaigns for in-market and lifestyle audiences. By using Amazon DSP, they were able to remarket to prior customers.
You need to get started using programmatic buying tools, but you’ve never done it before, and you don’t know where to begin. Join the club. We get it. It’s the same reason we haven’t learned to cook for ourselves yet.
Here’s the good news: We’ve got experts at Basis Technologies who know the ins and outs of programmatic advertising. All you have to do is ask the right questions. Lucky for you, we’ve asked the basic questions and we’ve come equipped with answers (and, lucky for us, everyone assures us there is no such thing as a dumb question).
Understanding Programmatic Ad Buying
To start: Programmatic is a very broad term. Simply put, it’s technology that automates digital media buying. This can include automating anything from rate negotiation and campaign set up to optimizations and actualizations. One of the primary buying tools you have at your disposal is a DSP.
If there really are no dumb questions, then can I ask: What is a DSP?
A demand side platform (DSP) is an automated ad buying platform, where advertisers and agencies go to purchase digital ad inventory. Examples of ad inventory include banner ads on websites, mobile ads on apps and the mobile web, and in-stream video. DSPs are integrated into multiple ad exchanges.
I’ve heard of a SSP. Is that the same acronym and I’ve been typing it wrong into Google this whole time?
Nope, it’s not the same thing, but it is similar in concept. Supply-side platforms, or sell-side platforms (SSPs), facilitate the sale of publisher inventory through an ad exchange. SSPs offer services such as minimum bid requirements in order for the publisher to maximize how much their ad space sells for. The difference is that DSPs are for marketers and SSPs are for publishers. SSPs (like DSPs) are plugged into multiple ad exchanges.
You keep mentioning ad exchanges. What are those? And why do DSPs and SSPs both need to be connected to ad exchanges?
Think of the ad exchange as the “go-between” in the automated buying world. An ad exchange is a digital marketplace that enables advertisers and publishers to buy and sell advertising space via real-time bidding (RTB). Meaning the ad exchange announces each impression—with the inventory flowing through DSPs and SSPs—in real time and asks buyers if they are interested in buying said impression and at which price.
All of this makes sense now, but I still don’t understand why I should use a DSP!
In order to understand why DSPs matter, it’s important to remember where the need came from and how the ad industry operated before automated buying. Traditionally, if you were a media buyer at an ad agency, the buying process was facilitated through human beings—it was you (the advertisers), the publishers (website where ad will appear), an audience (the viewer of the ad), and a bunch of spreadsheets and emails going back and forth negotiating prices. This process was complicated, time-consuming, and often error-prone. DSPs allow advertisers and agencies to buy across a lot of sites at the same time—and all of this is done instantly and efficiently, usually before the webpage loads.
How do I know which Demand side platform is right for me?
There are many DSPs in the programmatic world to choose from. Choosing the right DSP for you depends on a number of factors, like what type of data you need (first-party or third-party) and how many ad exchanges the DSP is plugged into, because that can affect reach. DSPs like Basis DSP give you access to over 40 billion daily impressions across all devices and channels. Other things to consider include cost, how much training and hands-on support you prefer, and ease of use—many DSPs have multiple, clunky or confusing user interfaces, which require a lot of education.
Speaking of training, I’m glad you mentioned that. What if I sign up for a Demand Side Platform and find out I have no idea what I’m doing?
Some DSPs come with a full team of experts, offering you everything from full-service to self-service and everything in between. With Basis DSP, you’ll start with a three-month platform training program, offering you an overview of programmatic, a walk-through of the interface, and best practices for campaign creation and optimization. Ongoing support is available in the form of a customer success manager and resources to keep you informed—like new feature webinars, best practice guides, and new quarterly business reviews.
Customer data platforms (CDP) and data management platforms (DMP) are marketing and advertising tools (in that order). They have similar sounding acronyms and, in some ways, work in the same way. For example, they both capture and organize data, use existing data, generate analysis and reports, and help to create a single customer view. With a CDP and a DMP, digital marketers can personalize their marketing campaigns, see how effective those campaigns were, and drive leads.
But to maximize your marketing results, there are distinct differences between the two platforms that you need to understand.
How to use a customer data platform and a data management platform
Data management platform
A data management platform collects, segments, analyzes, and stores anonymous customer data from various sources. Advertisers (mainly) use this unified, segmented data to effectively target (and retarget) advertising campaigns to their intended audience. Designed primarily as an adtech tool, a DMP can also drive product recommendations on your website for each unique visitor.
Examples of how to use a DMP effectively include:
Leveraging audience data to identify any new customer segments and reach those target audiences through various paid media channels
Using this audience data to personalize interactions
Learn more about DMPs
Customer data platforms
A customer data platform is a marketing solution that collects data from your existing customer database, website, mobile app, and CRM to customize marketing and content for current customers. It’s an ideal solution for any/all remarketing efforts.
Both platforms handle first-party data (direct from the customer, CRM and/or marketing automation database, or purchase transactions), second-party data (data provided from other companies, such as partners, resellers, etc.), and third-party data (data from multiple sources).
Both CDPs and DMPs collect the same types of data, but what they target differs. DMPs primarily pursue third-party data (cookies and segmented customer IDs) and then store that data for a short time. CDPs focus on structured, semistructured, and unstructured PII first-party data.
A CDP stores this data over long periods of time so marketers can build in-depth, accurate customer profiles and nurture customer relationships. And a CDP can share and draw data with any system (CRM or DMP) that needs it (and has it) to influence all types of marketing.
CDP vs. DMP—User profiles, data selection, and data capture
User profiles for DMPs segment and categorize people tied to a cookie’s lifespan to capture their anonymous behavioral data.
Data selection involves several field values to collect the necessary data. Yet, as part of the field data, DMPs can gather important insights, including when people visited a website, how long they spent there, and what type of information they read on it. But to get the most out of DMPs, you need to turn to analytics tools to extract more patterns.
CDPs avoid anonymous data and focus on specific data that identifies individual customers. An email address is one example of the type of customer identifiers used by CDPs.
The role of CDPs and DMPs in your marketing strategy
Data management platforms Each platform can play a role in your marketing strategy. Through access to historical data, both platforms can illuminate and inform your digital marketing strategy, but in very different ways. For example, DMPs are effective for digital channels and audience segmentation.
CDPs, on the other hand, are beneficial for social media websites, offline interactions, and insights into customer needs and purchase behavior. With a CDP system that manages data, you’ll better understand customer needs and expectations based on their purchase behavior and past interactions with your brand.
Knowing when to use or choose a data platform
Deciding on whether to use a CDP, DMP, or both comes down to:
Understanding the differences between the two platforms
Determining how each platform can help you achieve your marketing objectives.
Knowing how you want to use your data
Establishing if you can dedicate enough resources to using these platforms to optimize their potential
Not CDP vs. DMP, but CDP and DMP
A CDP and DMP can work together. However, if you need third-party data for short-term customer leads and conversion, you should work with a DMP. If you seek long-term customer engagement that requires first-party data, you should work with a CDP. Both platforms offer ways to enhance the customer experience (CX) and can help you create, provide value, and maximize return on investment (ROI).
Depending on the type of CDP you select, there are also opportunities to combine these platforms to take advantage of more marketing opportunities. For example, you can use DMP data in real time to personalize the interaction with first-time site (anonymous) visitors to establish and maintain trust. You can also deepen your customer profiles with the third-party data that a DMP delivers.
CDPs draw data from DMPs and share information back with them. The two systems work well together, with DMPs driving in new prospects and leads and CDPs helping brands connect and engage with them. So when a DMP is integrated with a CDP, you can gain access to first-party data that shows what customers are doing beyond their interactions with you. This insight helps you find out more details about what they want or need.
Customer relationship management (CRM) is a complete software system that manages customer relationships, but it isn’t a single solution. To effectively manage, analyze, and improve your customer relationships, you need a comprehensive set of cloud solutions that supports your organization at every customer interaction point.
Which is why your CRM solution should include a sales cloud, service cloud, ecommerce cloud, and marketing cloud, as well as a customer data platform (CDP) that can combine online, offline, and third-party data sources for an always up-to-date customer 360 view.
What is a CRM system?
A CRM system gathers, links, and analyzes all collected customer data, including contact information, interactions with company representatives, purchases, service requests, assets, and quotes/proposals. The system then lets users access that data and understand what happened at each touchpoint. Through this understanding, a complete customer profile is developed, and a solid customer relationship is built.
Customer data can also be aggregated to populate incentive compensation modeling, sales forecasting, territory segmentation, campaign design, product innovation, and other sales, marketing, and customer service activities. CRM tools and software help you streamline the customer engagement process, close more sales deals, establish strong customer relationships, build customer loyalty, and ultimately increase sales and profits.
CRM tools have almost always been seen as sales tools. However, over time, these solutions have extended their reach and become integral to marketing, ecommerce, and customer service functions.
The power of customer relationship management is derived by constantly gathering customer data, analyzing that data, and then using those insights to deepen relationships and improve business results. It allows any customer-facing employee to convey, “We know you, and we value you.”
A set of data-driven CRM tools supports you beyond the sales process, which is crucial to business performance. With the in-depth knowledge of your customers, you can:
Offer and sell new, add-on products—at the right time in the right way at the right price
Help customer service teams resolve issues faster
Help development teams create better products and services
CRM software supports strong, productive, loyal customer relationships through informed and superior customer experiences. The goal? To improve customer acquisition and retention by providing experiences that keep your customers coming back. Customer relationship management is both a strategy and a tool that supports those experiences in five key ways.
1
Answer the most basic customer questions
Customer relationship management helps you find new customers, sell to them, and develop a loyal customer relationship with them. These systems collect many different types of customer data and organize it so you understand your customers/prospects better and can answer (or even anticipate) their questions.
2
Manage customer data
Bad decisions come from a lack of access to and inability to interpret customer data. Being able to store, track, and validate customer data within an automated system will allow sales and marketing teams to optimize customer engagement strategies and build better relationships.
3
Automate the sales process
Sales force automation makes selling more efficient, helping you sell more quickly. The best CRM systems use artificial intelligence (AI) and unified customer data to automate the sales process by prompting sellers with recommended next-best actions.
4
Personalize marketing campaigns
Customers and potential customers arrive through various channels, including websites, social media, email, online/offline events, etc. Unfortunately, many businesses struggle to connect marketing efforts across all these channels. Marketing teams can improve conversions, strengthen customer relationships, and align messaging across their digital customer channels by leveraging CRM systems.
5
Align sales and marketing
With customer relationship management, marketing and sales work better together to drive sales and increase revenue. When sales and marketing are in sync, sales productivity goes up along with marketing ROI.
CRM features and benefits
Customer relationship management solutions are one of the largest and fastest-growing enterprise application software categories. The CRM market size was valued at $41.93 billion in 2019 and is projected to reach $96.39 billion by 2027, growing at a CAGR of 11.1% from 2020 to 2027.
More and more companies are using CRM solutions to acquire more sales leads, improve the sales pipeline, boost productivity, and improve customer satisfaction. However, many have encountered problems ranging from cost overruns and CRM integration challenges to system limitations. These are avoidable problems, and you can help ensure success by focusing on a customer-first strategy.
It’s critical for businesses to have integrated, customizable, and comprehensive views into their customers’ and potential customers’ solution/product interests, customer service needs, and purchase history. A good CRM system should provide that view. All data is in a single location, viewable through optimized dashboards.
Additionally, your marketing team can leverage CRM solutions to orchestrate personalized marketing and lead generation campaigns. These systems can help track all cross-channel interactions—from engagement to purchase. Mature cloud CRM solutions do more. They are fully integrated with back-office solutions to successfully support the entire customer journey.
Because it manages prospect and customer engagement points across all channels, your CRM system can inform all your communications and marketing activities, delivering the 360-degree customer view needed for a truly connected omnichannel experience.
Many different vendors have many different types of solutions. However, a few capabilities are must-haves.
Provide accurate, consistent data for that much-needed, complete customer 360-degree view
Types of CRM
CRM software solutions, at their core, are used to manage customer relationships and sales interactions. Still, many businesses leverage these systems simply as a sales force automation tool. But these solutions, such as Oracle’s, offer many more valuable capabilities that span a wide range of marketing and sales functions, including marketing, customer service, sales, and partner channel management.
Today’s CRM software can support the entire customer journey. But what one company may need from a CRM system can be vastly different from what another company might require. To help you select the right CRM for your organization, it’s helpful to know that there are three main types of CRM solutions: collaborative, operational, and analytical.
Data is the most critical part of any CRM software solution. In fact, customer data is the starting point for all marketing and sales activities. Successful customer engagement and relationship strategies hinge on accurate, complete, and accessible customer profiles. Bad data comes from several places, including:
Fraudulently entered data
Keystroke errors
Duplicate customer information
Natural changes (company bankruptcy, job changes)
Incomplete and inaccurate data can increase quickly to degrade the value of your CRM tools, resulting in unnecessary expenses. Conversely, when customer data is complete and accurate, businesses stand a better chance of reaching their target customers and prospects. In short, your data is a valuable asset. So it’s important to focus on collecting and optimizing these four CRM data types:
Identity data
Identity data includes descriptive details to identify customers, leads, and contacts. This data should be used for marketing segmentation.
Descriptive data
Descriptive data includes lifestyle details relevant to your contacts. It is what completes that all-important 360-degree view of leads and contacts.
Quantitative data
Quantitative data includes measurable data points that can help you interpret how your leads and contacts have interacted with you.
Qualitative data
Qualitative data can help you better understand your contacts’ intent, including search behaviors related to buying decisions.
CRM vs. marketing automation
Both CRM and marketing automation systems are data-driven. They focus on gathering, storing, and using data. For example, marketing automation systems gather leads by communicating with potential and current customers.
Specifically, marketing automation looks to gather enough customer data points to show intent and then hands that person off to the sales team as a marketing-qualified lead (MQL). A CRM solution picks up where the marketing automation solution left off and works to convert those marketing-qualified leads into contacts.
AI in CRM
Discover the next generation of CRM (0:38)
The best CRM systems offer robust analytics coupled with AI and machine learning. AI is the future of customer relationship management, going beyond contact management and sales force automation to truly helping you sell.
AI in CRM can guide you toward the next-best actions and provide smart talking points—specific to each customer opportunity. AI also delivers timely customer intelligence that helps you optimize customer experience (CX) across marketing, sales, and customer service.
CRM vs. CX
When customer relationship management first arrived on the scene, businesses would capture data but not know what to do with it. Today, CRM systems are integrated with AI, which helps interpret and predict what that data means.
CRM AI capabilities are the foundation to using a 360-degree view of the customer that will start them on their way to becoming your customer. As these AI enhancements continue to evolve, CX will continue to improve—and in turn, customer expectations will continue to increase.
Your business needs to fully understand your customers (and how they buy) to not only meet their expectations but to provide them with compelling experiences. This is the future of CX and should serve as your guide to selecting the best CRM solution.
How CRM improves customer experience
A complete customer view is necessary for business success and growth. Without a CRM system, you’ll struggle to develop that much-needed 360-degree view of the customer that you need to:
Personalize customer interactions
Automate business processes (with appropriate CX integrations)
CRM software solutions help sales reps organize their leads, automate follow-ups, and manage their opportunities and pipeline. But sales isn’t the only department within your organization that can benefit from your CRM platform. Marketing, customer support, product development, content management, and HR can all achieve high ROI from a CRM solution.
For example, since your solution holds essential information about every customer, your customer support teams can put that customer data to good use. With CRM data, your customer support reps (CSRs) have more insight into who your customer are, their needs and motivations, and what type of relationship they’ve had with your brand in the past. This information gives your customer service reps context when interacting with those customers.
As with any other business application, the decision to host your CRM on-premises, in the cloud, or as a hybrid model depends on your business needs.
On-premises CRM
On-premises CRM gives you complete control over your system, but there is a trade-off. These systems must be purchased, installed and deployed, monitored, maintained, and upgraded. As a result, they can be costly, involve time-intensive installations and upgrades, and require in-house IT resources for ongoing maintenance.
With an on-premises CRM solution, access to new functionality can be a long, drawn-out, and expensive process. Also, sophisticated AI-based technology—to support virtual assistants, chatbots, next-best recommendations, and predictive analytics—will not be available.
Cloud CRM
Software-as-a-service (SaaS) options offer simple interfaces that are easy to use and require less IT involvement and investment than on-premises CRM tools. Because upgrades are pushed through automatically, you always have the most up-to-date functionality without significant IT effort.
This includes new advanced technology, such as AI and machine learning that can help you turn your customer data into relevant customer experiences. Cloud-based CRM also offers the convenience of anytime, anywhere access through mobile devices.
Hybrid CRM deployment
A hybrid CRM deployment requires trade-offs in all the areas mentioned above, but this deployment model can also deliver the best of both worlds. However, it’s important to recognize that IT technology is increasingly moving to the cloud. Companies that remain heavily invested in on-premises CRM risk being left behind as competitors advance to the cloud. Your ability to provide mobile access will also be limited.
There are so many things to take into consideration when selecting a CRM system for your organization. But in the end, the CRM model most suitable for you is the one that allows you to interact with your customers in meaningful ways to drive exceptional customer experiences.