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FOCUS: Online ads market bucks 2020 trend winning 4%, likely to grow further

By Yekaterina Yezhova

MOSCOW, Mar 29 (PRIME) -- Internet advertising grew by 4% to 253 billion rubles in 2020, the only advertising segment to grow in the pandemic year, the trend analysts think will continue in 2021, boosting return of tech giants Yandex and Mail.ru Group from this channel further.

During the pandemic, all segments of the advertising market suffered losses. Advertising budgets in the Russian Internet even decreased for the first time on the record they fell by 11% in AprilJune, but ended the year higher, Russian Association of Communication Agencies (RACA) Vice President Sergei Veselov said in a research.

According to RACA, the countrys total adverting market shrank by 4% in 2020 to 473.4 billion rubles, value-added tax excluded.

Veselov said the 2020 crisis provoked by the pandemic harmed all the core advertising markets of the world, but unlike ordinary shocks, it was unexpected, manmade, and developed fast.

The Russian advertising market passed the COVID year much better than most of its foreign counterparts the global advertising market fell by 7.5%, according to researcher Zenith, the Russian market lost only 4%. At that, the West European markets lost 12% of advertising budgets; India, Brazil, and Mexico lost 10% to 17% and Japan 8%, he said.

Split by content, the Russian Internet services added 4% to 215.6 billion rubles as online video comprising streaming and video on demand gained 5% to 20.8 billion rubles; digital audio expanded 3% to 700 million rubles; and digital print went up 3% to 15.9 billion rubles, according to RACA.

Mikhail Poponov, head of the client support sector at researcher Mediascope, said that real estate, education, and recruiting services moved to the top category in online advertisements.

Investment company Freedom Finance analyst Yevgeny Mironyuk said that the expansion of the Internet advertising market is logical as the share of online expenses increased to 11.8%, and the additional spending moved to the Internet stood at 3% of household demand.

Continued growth of the market in 2020 was mainly explained by a rapid rise of e-commerce to 2.5 trillion rubles, according to researcher Data Insight. The return on advertisements on the Internet rose accordingly. The pandemic and the follow-up restrictions, which became the main factors behind lower volumes of traditional channels, underpinned the e-commerce advance, Mironyuk told PRIME.

The analyst expects the Internet advertising market to continue to grow in 2021.

Yandex and Mail.ru Group

On the Internet advertising market, the share of Yandex is three times larger than that of Mail.ru Group, Mironyuk said, adding that Mail.rus advertising revenue recovered faster thanks to its diversification as the company owns the countrys largest social networks VKontakte and Odnoklassniki.

Mail.ru Groups online advertising revenue increased by 10.2% on the year to 12.777 billion rubles in OctoberDecember and 5.3% to 39.148 billion rubles in 2020. The companys total revenue jumped by 25% to 32.979 billion rubles in OctoberDecember and 21.2% to 107.427 billion rubles in 2020.

VKontakte remains the pillar of our performance, with revenues rising 17.2% on the year in OctoberDecember versus 12.9% in JulySeptember, whilst the number of active advertisers on VKontakte grew by 30% in OctoberDecember, Mail.ru Group said in its financial statement.

If advertising contributes a third to Mail.ru Groups revenue, Yandex is more dependent on this source of income with more than a half of revenue earned on the sale of advertisements.

Yandexs total online advertising revenue rose by 12% to 38.402 billion rubles in OctoberDecember and 4% to 126.450 billion rubles in 2020. The companys total revenue rocketed 39% to 71.599 billion rubles in the fourth quarter and by 24% to 218.344 billion rubles in 2020.

(75.7576 rubles U.S. $1)

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29.03.2021 08:56
 
 
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