Nestlé Paves Way For Premium Programmatic in China

The launch of Mindshare's programmatic premium trade desk for Nestlé in China will validate buying spends for other brands operating in the region.

Media agency Mindshare has launched a premium programmatic trade desk for Nestlé in China, which is set to bolster the automated buying process for other brands operating in the region.

Mindshare, part of media investment firm GroupM, developed a tech stack that allows Nestlé to buy online television (OTV) premium inventory on Chinese video channels including Tencent, Youku, Sohu, and iQiyi. Mindshare partnered with other agencies, including Miaozhen DMP and ReachMax Trading Desk Platform, to build the platform.

Nestlé has been pushing programmatic on a global front, but the challenge in China is finding the right local technology partners and deep programmatic operations expertise, says Kris Yang, Nestlé China’s head of media.

“Following a programmatic direct model, we can still maintain a direct relationship with our media partners, keeping the entire programmatic process very transparent, as well as increasing media efficiency and effectiveness,” explains Yang.

The move will allow Nestlé to have greater control over the quality of its programmatic spend and an opportunity to tap into movies and television series.

“Most brands are going programmatic, so it’s not ground breaking – it is the size and nature of this deal that makes it significant,” says Mathew McDougall, the chief executive officer of Digital Jungle.

McDougall’s digital agency has offices in Sydney, Auckland, Shanghai, Beijing and, most recently, Paris. Over the past six to nine months, he has seen a shift in client media spend from direct media buys to demand-side platform (DSP) inventory (remnant inventory used to bolster audience reach), and now to leveraging more premium inventory with a programmatic buy.

All of his clients are increasing their investments into media buying through DSP, but the Nestlé deal will validate branding campaigns using DSP premium inventory as a credible option going forward, he says.

“Nestlé might be a substantial media spender and will get a wider range of inventory, but it is not a game changer – it is a validation for other brands that they can and should be considering a similar approach,” he says. “They will watch it, look at the savings and cost effectiveness, and may get a bigger media spend to move down that premium DMP road in the future.”

Mindshare spent six months working with Nestlé and its technology partners to set up the trading desk, beginning with small-scale trials to now running multiple programmatic OTV campaigns across all Nestlé products in China.

The deal is a win-win for both the brand and the Chinese OTV platforms. The move also gives Nestlé a bigger bang for its buck, says Charlie Wang, Mindshare’s head of digital in Beijing.

“For these big brands, it is about brand safety issues,” says Wang. “There is cluttered ad material in China and for brand advertisers, premium gives more control on the placement of the ad.”

clickz-live-hongkong-logo-200*To learn more about programmatic in China, be sure to join our programmatic panels at ClickZ Live Hong Kong on August 4-6, 2015 and ClickZ Live Shanghai on September, 8-10, 2015!

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