Mr. Yi Shi who is both CEO and Founder of Avazu Inc on Avazu’s providing as a reveal commercials company, with a personal trade company and a concern DSP – and why they have chosen to go into China. He discusses the challenges in the Chinese market, how Chinese publishers are acquainted with selling their stock and ad placements for a hard and fast price per month or per year. Shi points to localisation as the key reason why western agencies usually fail in China.
He also describes how the DSP is attracting increasingly consideration from the Chinese VC and PE industries – and the way Avazu hopes to augment their RTB stock fivefold next year in China. As you could see, our preliminary enterprise model had numerous similarities in comparison with the DSP model, which is also the main driver for us to enter the DSP company. Our demand side platform was released in August 2010 for Europe. However, compared with the DSPs in the US, we started our DSP with offering European advertisers custom-made retargeting solutions, across the greatest ad exchanges, SSPs and ad networks, as a substitute of directly serving the large businesses. Our DSP business, which is termed AvazuDSP, is already belonging to the top avid gamers in the European retargeting market and we collaborate with over 70% of the biggest European DR advertisers.
We chose penetrating the Chinese market due to its high growth rates of over 10% year to year and we see China as the longer term “must enter” for all big US and EU retailers. The greatest challenge we have been facing in China is the Chinese mentality, the manner of operating and doing enterprise is absolutely various compared to Europeans and Americans. It starts with local customs of where to barter and shut a deal to getting daily ordinary works done. So individually localization is the largest challenge for all Western agencies entering a such closed market like China and that’s also the main reason why Western agencies always fail in China examples are Google vs. Baidu, Youtube vs. Youku and Tudou, ICQ vs.
Tencent or Facebook vs. Renren and Kaixin. Chinese publishers are familiar with sell their inventories and ad placements for a fixed price per thirty days or per year, which produces huge market inefficiency. This way of inventory control can work so long as the demand is considerably larger than the provision and the key a part of the demand are branding concentrated. However, Chinese online media industry is thinking now more about repositioning themselves for the long run, keeping apart the sales house a part of their top rate ad promoting actions with the remnant one, and attempting to automate the remnant stock monetization thru auction and bidding structures.
We are seeing here huge spaces for SSPs and ad exchanges for choosing up those part of long tail and remnant inventories.