A U.S. DSP Seeks Its Fortunes in Asia

Hong Kong – Simpli.fi, a demand side platform (DSP) headquartered in Texas, U.S., has expanded its operations to China. The company’s product allows marketers to bid online ads in real-time.

Don Epperson, executive chairman at Simpli.fi, said the platform will enable advertisers and their agencies to bid on billions of display ad placements per month from thousands of China-based sites and hundreds of thousands of U.S. based sites accessed daily by people in China.

He declined to name individual advertisers but said the DSP works with global brands, search engines, e-commerce sites and direct response marketers across industries.

These advertisers will use the platform to buy targeted niche ad space in high volume, which Simpli.fi will charge on a percentage of ad spend.

Simpli.fi launched its platform to the US/Canada market in October 2010 and in Asia this month. Its China debut will be followed by India, Southeast Asia and Australia in the coming weeks. The DSP intends to launch in Europe in Q3 this year.

Display advertising in North America has begun to shift toward buying audiences rather than media properties. While there is huge potential in China (Magna Global forecasts Internet ad spending will reach $10.5 billion by 2016), display ad technologies are relatively nascent.

For instance, buying online ads based on performance metrics such as CPC/CPA is still not widely accepted in China as most buy content and premium inventory on a per day or time block basis, explained Lawrence Wan, managing director, e-business solutions at GroupM China.

However, this hasn’t deterred agency networks such as Vivaki and Mediabrands from importing their display ad models from the U.S. to China. Their success in the market may depend on acquisitions and partnerships with regional ad technology firms, according to a Wall Street Journal report.

Claus Mortensen, principal analyst for digital marketplace and new media at IDC, said display technology firms that plan to enter China have to take on a one-market approach.

In Singapore, Reza Behnam founded Adz in 2008; the firm is a DSP or interactive “audience buying” platform with the goal of simplifying the online ad buying process for agencies and advertisers.

The former managing director at Yahoo Southeast Asia said, “Arbitrage, non-transparency, and blind buying have caused a lot of confusion and a lack of confidence in the buying process, especially on the display side.”

One of Adz’s goals is to reduce delivery costs for agencies and allow them to scale their existing digital capabilities to cover more advertisers and handle larger online budgets. The DSP works with agency networks as well as direct marketers and brands. It is in the midst of expanding across the Asia Pacific.

Because Asia’s ecosystem is not as developed or crowded, this presents challenges as well as opportunities for display technology firms doing business in the region.

Among the challenges are misinformation and the risk-averse nature of many advertisers in testing unproven technologies. Additionally, in Asia’s emerging markets, despite the availability of technology and processes to capture data, actual audience data has not been sufficiently aggregated and is spread across many publishers and advertisers, Behnam said.

“So, we’re still in early days in terms of performance display, optimization and audience buying, but it will happen in Asia and it’ll happen at a relatively fast pace,” he added.