Recently, China’s largest DSP iPinYou announced the official release of Sina Ad Exchange (SAX) with Sina, one of China’s largest portals, and the selection of iPinYou as the first DSP to integrate with SAX. This means that more advertisers are able to officially deliver real-time bidding (RTB) ads on Sina via iPinYou.
iPinYou CEO Huang Xiaonan said this move marks the formal acceptance of RTB by an increasing number of mainstream publishers and increasing advertisers’ demands for both cost-effectiveness and high-quality inventories. This will play a significant role in the shift of Internet advertising from the “cost per day model” to the “audience-based buy model.”
As China’s leading portal site with high media value, Sina covers a high percentage of the high-end Internet population in China. Now, Sina is building an invitation-based private exchange and enlisting the leading domestic DSP as its partners.
RTB model flies in the world, becoming a top choice for advertisers
It is reported that RTB has been growing extremely fast in recent years. It is capable of drastically increasing advertising efficiency compared to traditional forms of display advertising while improving yield for publishers. IDC estimates that in 2012, the United States has already had 60 percent of its Internet traffic sold via RTB. In the same year, Taobao, Google and Tencent have all launched their own ad exchanges in China and successfully integrated with iPinYou to deliver a large number of ads. Obviously, RTB has rapidly become the new top choice of advertisers around the globe.
According to reports, SAX has included a significant amount of high-quality inventories from Sina, including 10 plus channels of its main site. This would mean that more and more advertisers can advertise to a massive target population on Sina via iPinYou. With increased recognition by advertisers, RTB advertising has developed considerably in China. The previous concern among advertisers was regarding the quality of inventories available through exchange. The official release of SAX has provided advertisers with greater confidence.
SAX picks iPinYou DSP for integration
SAX officials stated that after successfully integration, iPinYou will be able to place RTB ads on behalf of advertisers on SAX. The cookie mapping function provided by SAX can help DSP gain insights into the behaviors of consumers so that the DSP can accurately match ads with the advertisers’ marketing goals while maximizing their value.
Insiders have mentioned that it makes sense that SAX selected iPinYou as the first DSP for integration. iPinYou is presently the largest DSP in China for brand advertisers. It possesses the most advanced audience targeting technology and the largest high quality audience profiles. Industry experts have revealed that in 2012, almost all trading desks have chosen to work with iPinYou DSP. iPinYou CEO Huang Xiaonan told reporters that iPinYou serviced over 200 well-known domestic and foreign IT, FMCG, tourism, automotive, and financial brands, such as IBM, Microsoft, Unilever, PICC, Toyota Motor, Gome and Hilton Hotels.
According to reports, iPinYou DSP can bid up to 3 billion impressions per day. Through its proprietary algorithm, iPinYou can help advertisers to reach their target on a large scale and optimize performance overtime. 2012 was the beginning year for China’s RTB industry. With the emergence of more and more ad exchanges, the Chinese RTB value chain has started to take shape. The barriers to entry into the DSP market will continue to increase. Strong technical capability, sophisticated algorithms and customer service quality will be key indicators that distinguish DSPs. With the industry maturing, ad exchanges will be more selective in integrating with DSPs, especially with the top ones.
Sina may use RTB to monetize on Weibo traffic?
An analyst mentioned the release of SAX might indicate Sina is preparing to monetize on its Weibo traffic. The analyst went on to state that advertising revenue holds considerable importance for Sina. At the end of 2012, Sina announced an organizational structure adjustment, separating the company’s main business into two sectors: the portal site and Weibo. After the adjustment, Sina CEO Charles Chao will also focus more of his attention on the Weibo sector. Data show that by the end of September last year, the number of registered users on Sina Weibo exceeded 400 million, while the number of registered users of enterprise Weibo reached 230,000.
As China’s Internet advertising industry enters the RTB era, the traditional display ads in the CPD (cost per day) model is suffering through a period of challenges. Internet giants, including Google, Taobao and Tencent, have all set foot in the RTB market in order to seize market shares early. As one of China’s most active social platforms, Sina Weibo possesses a significant number of users in China and has become increasingly valuable to advertisers. As Sina Weibo adapts to commercialization, how it will cash in on the massive user traffic will prove challenging.