FOCUS: Russia’s crisis-proof Internet ads market seen overshooting other markets’ growth
By Yekaterina Yezhova
MOSCOW, Mar 16 (PRIME) -- The Internet advertising market, at 85 billion rubles in 2014, tops Russia’s other advertising markets by growth rates and analysts said it still has high advance potential due to a widespread use of smartphones and is resilient to the economic crisis.
The Russian Association of Communication Agencies (RACA) estimates that the country’s overall ads market rose 4% in 2014 to 340 billion rubles, including 84.6 billion rubles of Internet advertisements, which expanded 18% last year.
“It’s obvious that economic recession affects everything, including online advertising. However we have every reason to believe that this type of advertisement will suffer the least and will improve its positions in the market thanks to advanced technologies and possibility to monitor the efficiency of advertising campaigns online,” Alexey Katkov, vice-president, international development director, commercial director of Internet giant Mail.Ru Group, told the Russian Connection.
In 2013–2014, the online advertising market expanded by 20%, research company J’son & Partners Consulting said. It splits the market into two key segments: contextual advertising, estimated at 64 billion rubles in 2014, and media advertising, estimated at 17 billion rubles.
The RACA said that the market of contextual advertising increased 27% in 2014 to 65.5 billion rubles, while the media advertising market shrank 5% to 19.1 billion rubles.
Contextual advertisements appear on Web sites or other media, such as content displayed in mobile browsers. The advertisements are selected and served by automated systems based on the identity of the user and the content displayed. Media advertising, or banners, involve the use of animated or static graphic images.
“We agree with the RACA estimate of the Internet advertising,” Internet giant Yandex’s spokeswoman Asya Melkumova said, adding that Yandex does not publish its own outlooks.
The country’s three leading cellular operators – MTS, MegaFon and VimpelCom – were listed by research company TNS Russia among 25 most active advertisers in 2014 by the volume of spending on advertisements in mass media. Satellite TV operator National Satellite Company, working under the Tricolor TV brand, also made the cut.
Below is a breakdown of domestic telecom companies-leaders by spending on advertisements in mass media, provided by TNS Russia:
| Rank | Company | Advertising budget, % of total spending |
|---|---|---|
| 12 | MTS | 1.28 |
| 15 | VimpelCom | 1.19 |
| 21 | MegaFon | 1.02 |
| 23 | National Satellite Company | 0.84 |
The list’s leaders remained the same in 2013–2014: Procter & Gamble (3.55%), MARS-Russia (2.69%) and PepsiCo (2.61%).
Mobile advertising
Analysts pointed to the growing importance and expansion of mobile advertising. “Mobile advertisements work better than desktop ones, because something always happens in smartphones, like calls, notifications, updates and so worth,” Anna Mulenkova, deputy director for advertising, marketing and PR at UFS Investment Company, told Russian Connection.
Most mobile advertisements are presented by SMS mailouts, despite a recent decline in its popularity, banners, adapted to the mobile format, and advertisements in applications follow.
“Traditional advertisements are perceived as spam; they irritate and distract. We expect that mobile advertising will become a kind of prompter for the buyer, supplying maximum information on goods and services. The future belongs to advertisements that will organically fit in content of mobile applications,” Mulenkova said.
“Out of 140 Web sites of brands making up the top 100 Russian advertisers rated by AdIndex only 62 have mobile site versions. The most active proved to be car dealers and mobile operators, while banks, hotels, restaurants and retailers lag behind.”
Mulenkova said activities will be focused in three fields in the future: development of technologies, including platforms gathering relevant information and analytical tools; creation of target applications and services, in which the sponsor’s advertising message will become an integral part of user experience; and mobile payment systems.
Alexey Katkov from Mail.Ru Group said that distinction between mobile and desktop advertisements is fading. “Many campaigns are now carried out in a ‘multiscreen’ format. This is why it would be more correct to speak about online advertising in general, which has every chance to strengthen its positions,” he said.
(61.3167 rubles – U.S. $1)
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