As Programmatic Display Evolves In China, Mobile Heats Up

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wangs-adsmogoMobile advertising, including mobile programmatic, is taking off in China, as advertisers and publishers chase the eyeballs in display media.

AdsMOGO, a mobile SSP that works with app publishers help to monetize their mobile apps, has been in the space for two years. Working with more than 64,000 apps and nearly 1 billion impressions, the company started out more as a mobile aggregator and has plans to move toward becoming a mobile ad exchange, said CEO Peter Wang.

"In this space, we do not have a very strong competitor at the moment, but in the future all those big guys will enter the market," he said "We know Baidu and all the publicly traded companies in China normally won't skip any space and want to do everything. In the future, maybe we'll have competitors from those big guys."

Wang, along with AdsMOGO COO Cain Wang (no relation), spoke to AdExchanger about the mobile programmatic space in China right now, how mobile users have adjusted to advertising and the company's plan to shift to become a mobile ad exchange.

AdExchanger: You are working as a mobile SSP right now. What are the challenges of mobile programmatic and RTB, specifically on the publisher side?

PETER WANG: This is a relatively new thing. When we started AdsMOGO two years ago, we were telling people, "We're an SSP, we're not coming here to take your advertisers." But nobody believed us. Everybody, in their mind, believed that we were just doing the SSP as a cover, but when we attracted enough publishers, we would turn our backs. People in China aren't used to playing well with others. When you're doing something similar to what they do, they feel the danger instead of the opportunity.

But finally, now that we're in 2014, most of the companies realize this is the way to go. Even the biggest ad networks in China — all those people who were against this model at the beginning — are starting to come to us and say, "We're thinking about starting our DSP business in 2014, so let's talk." We've realized the business opportunity is coming.

Tell me more about AdsMOGO. What is your headcount and where are you headquartered?

PETER WANG: We started in February 2011 with about 20 engineers, and we are headquartered in Beijing. We have three offices: one in Beijing, one in Shanghai and one in a small town called Shijiazhuang, in the Hebei Province. A lot of people think it's weird because that's where all our labor-intensive work is. We work with publishers, so that requires a lot of attention and customer service. Right now, we're around 65 people and half of them are engineers. And the other half are basically customer support.

Are Chinese mobile audiences embracing mobile and mobile advertising?

PETER WANG: At the beginning, people thought advertising was hurting their user experience and they didn't understand why they had to see ads while playing games. But now, gradually, they are starting to realize that it's an important part of the ecosystem if they want to keep playing free games. This is something they have to accept. Also, two years ago, there was only one form of mobile ad, basically the banners, and now we have the banners, the interstitials, the full-screen, the loading screen, videos and a lot of other forms. So there are more forms of mobile advertising and a lot of them aren't as intrusive as before, so people are starting to be ok with them.

When I first spoke to companies from China, they said video programmatic was on the rise, but in recent months, mobile seems to have overtaken video. Is that the case? Why?

CAIN WANG: Video, from what I understand, has been really popular and has been growing extremely fast in the past three or four years. Now, it's still growing but not as fast as before. In the meantime, video isn't all public inventory and most of the inventory is controlled by the big companies like Youku and Tudou.

In the meantime, the space and the audience have been growing on mobile extremely fast. When the size is right, there is a demand for a more efficient way to service clients. That's one of the reasons that mobile programmatic buying is improving. We are also encouraged by the shift of the display market, which people see as successful. It's not extremely big, but the past few years have been encouraging. People see the efficiency driven by the programmatic buying and now are looking to mobile.

And how is AdsMOGO funded?

PETER WANG: We've done two rounds. One was the seed round with a few friends. In 2010, when I started pitching the idea, they started to get interested and they gave us a good start. Then, soon enough, we raised another round, which brought us a couple million dollars, which gave us enough cushion. Luckily, in 2013, when we closed the book, we were in very good standing and are starting to make money.

What are your goals and plans for the next year to 18 months?

PETER WANG: In the past two years, we positioned ourselves as a mobile aggregator and then positioned ourselves as a mobile SSP. Our next position is a mobile exchange. We've known that from the beginning and we've been working our way there. In 2014, finally, the time is coming. Sometime in 2014, maybe in the first quarter, we will officially announce that we're a mobile ad exchange. We're doing that part of the business already; we just have to make it official.

CAIN WANG: And also data. We have strong demand from partners, especially the DSPs, for more quality data so that will significantly help them improve data efficiency in servicing their clients, so we will work on that.

The ecosystem has been evolving, from display. We're proud of the fact that, if you look at the display markets, it was just the giants moving the industry forward. The first display exchange was supported by Taobao — the TANX exchange — and now it's Baidu, Google, Tencent and Taobao. Today, in mobile, AdsMOGO is a small company but we have significant influence and impact in this mobile space. We're fighting those giants.

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