Programmatic conflict in China: Hdtmedia's viewpoint on being a DSPAN

This Q&A, edited down from an interview conducted in Chinese, is a followup to earlier articles about conflicts of interests in China's programmatic market. iPinYou responded with a rebuttal on why being involved in both PDB and RTB is not a "conflict". Here's Hdtmedia's take, from Clarence Zheng, CEO and founder.

What is your view on Hdtmedia being described as a DSPAN [A term coined by RTBAsia in 2013 to describe a hybrid of DSP and ad network], effectively being "a real-estate agent that owns property”?

The term DSPAN has no foreign equivalent. Only China has this term. From our point of view, we do not understand why there is such a term. It may be because China has indeed too many similar companies that do not have a very well-communicated positioning. We are better at communication and the market should be very clear what we do. So those who communicate badly may be lumped in the 'DSPAN' category.

Yes, a lot of better DSPs in China developed from being ad networks that have ad-serving technology (a bit like the original DoubleClick), which I recognise. This is not contradictory. Because you still need a business model that serves both needs at the same time.

To say that we are a real-estate agent that owns property is wrong because ad networks do not own traffic, but purchase traffic from publishers. From my understanding, we are more a stock broker than an agent. We recommend 'stocks' to buyers through our software that searches the market in real time.

Even for preferred programmatic deals agreed at a fixed price directly with publishers, clients still go through companies like us to 'place the order', because only we can do frequency capping uniformly across all the media bought. iQiyi will only control its own frequency of a single client's ads; it will not control Youku Tudou's frequency, for example.

In that case, why do you think the industry has such an impression?

People who are from agency backgrounds do not understand that we do not own the real estate. If we do, of course I will sell my own website's traffic, but it will not be fair and we will be slowly replaced. This does not compute, right?

For the past 16 years, we have never built a website of our own to produce our own content to sell it. We just negotiate with all of these publishers or content providers. People are mistaken.

What do you think the industry should focus its energy on instead of squabbling over definitions and business models?

The ad-tech scene abroad is not the same as in China, especially in the United States. If you do ad serving, you do ad serving well. Other companies will try for other programmatic innovations. But in China, it’s a you-do-I-follow framework, confusing the market greatly. Every day in the past 16 years, someone has copied our products and calling them by other names.

Technology has upset the original rules of the media-trading industry here. This is why a lot of media agencies start trading desks. But these desks do not have any good technology. A good trading desk does not merely integrate traffic from media and serve ads to them, but applies analytics for ultimate optimisation.

I actually think the next big technological advancement is in the Internet of Things, but not every IoT product is useful for advertising. We still want to maintain an advertising-related business model, or we will lose our professionalism otherwise.

Campaign Asia-Pacific welcomes further input from companies mentioned in the other conflict scenarios in our original piece on this topic. Please write to [email protected].