IAB RUSSIA DIGITAL ADVERTISERS BAROMETER — 2019 · 6. diversity of digital advertising 34 7....

IAB RUSSIA DIGITAL ADVERTISERS BAROMETER — 2019

Prospects for Online Advertising in Russia: Advertisers View.

Study conducted by Data Insight for IAB Russia

OCTOBER 2019

study prepared for:

by analyticalagency:

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IAB Russia Digital Advertisers Barometer 2019

CONTENTS

1. GRATITUDES 3

2. MAIN FINDINGS 6

3. ABOUT THE RESEARCH 11

4. ADVERTISING BUDGETS DYNAMICS 14

5. MARKETING MIXTURE 29

6. DIVERSITY OF DIGITAL ADVERTISING 34

7. PLACE OF MOBILE ADVERTISING

IN A DIGITAL STRATEGY 46

8. METRICS AND ANALYTICS 48

9. DEPARTMENTS OF INTERACTIVE

ADVERTISING AT THE COMPANIES 53

10. TYPES AND CATEGORIES OF THE ADVERTISERS 55

ABOUT THE IAB RUSSIA 60

ABOUT DATA INSIGHT 61

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1. GRATITUDESHere is the research entitled “IAB Russia Digital Advertisers Barometer

– 2019”. This research represents the advertisers’ opinion on the interactive advertising market, its development and dynamics, tools used on the market.

The research conducted in 2019 is the sixth one in succession. Its long-term nature ensures that we can track how the advertisers’ opinion and perception of the possibilities and roles intrinsic to interactive advertising have evolved.

1.1. RESEARCH REQUESTERS This research has been conducted by the decision of the General Meeting of

IAB Russia full-fledged members. The companies consolidating their resources to develop the interactive advertising market in Russia have supported the launch of the regular research on advertisers’ sentiment and expectations to hand it over to businessmen and marketing experts from the real business sector and to make the market more transparent.

We express our gratitude to the member companies of IAB Russia that have funded the present research.

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”Over the six years, namely from 2014 to 2019, when we conducted the research entitled IAB Russia Digital Advertisers Barometer, the interactive advertising share in Russia increased from 25% to almost 50% of the market volume and it continued to grow annually in double-digit rates. A digital channel has become the core investment pattern for business and, alongside with the market share, the liability of the Internet industry towards the business community has also increased. The present research is one more step towards increased transparency and certainty for advertisers and it is also an invitation for further cooperation. The Association IAB Russia is a platform for business interested in communication with the creators dealing with tools for interactive advertising”.

Boris Omelnitski, Director of the Market Strategic Development of the Commercial Department Yandex,

President of the non-governmental organization IAB Russia

”Over the course of already 6 years, IAB Russia has been presenting the findings obtained in advertisers’ sentiment researches, and with each passing year it is getting more and more substantial, and trends a reader can track are getting clearer and more well-reasoned. In my opinion, the value of this research is increasing as far as the knowledge about the evolution of the approaches applied by different businesses to digital advertising is accumulating through the years, and the report on this research is becoming a substantial proof of the efficiency and popularity of digital advertising”.

Aleksei Beliaev, Head of the Analytics Department of the Commercial Department Mail.ru Group,

Vice President of the non-governmental organization IAB Russia

”The annual research Digital Advertisers Barometer, which has already become a tradition, allows to see changes on the market as the advertisers see them and to detect trends and new challenges. The research showed that we should expect a further increase in the rates of the Programmatic Advertising Buying (programmatic) in the near future, its share has already exceeded 80% of the budget in the USA and Great Britain.

In the same year, it has become clear that digital advertising is coming beyond the scope of the Internet and integrates into classical media actively. At the moment it is conspicuous in the case of DOOH media, but its activation in the TV and radio sectors can be expected in the long run up to 2020. It is also testified by advertisers’ great interest in such formats as video and audio, what has been reflected in the research. That is why, speaking of interactive advertising, you need to keep in mind that it engages all media".

Aleksandr Papkov, Chief Technology Officer at Media Direction Programmatic MEDIADIRECTION GROUP,

Vice President of the non-governmental organization IAB Russia, Co-Chairman of the Joint Industry Committee at IAB Russia for Big data & Programmatic,

Co-Chairman of the Sector Committee at IAB Russia for DOOH Media

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1.2. ADVERTISERSWe also extend our thanks to all the companies that have responded in the

survey – whether indicated below or those who haven’t given their consent to the indication of their brands in the list. Each of your opinions is valuable to us, because it is them that determine the further development of the interactive advertising market in Russia.

“The main thing about making any decision is to have precise information. That is why we, at INCHCAPE Jaguar Land Rover, support any researches, particularly conducted in such direction as digital advertising, because it is vibrant and progressive. It is a lot of work and it provides a valuable contribution to the future of the whole industry, as well as to making daily decisions on the ground”.

Olga Proskurina, Head for Marketing and Advertising at INCHCAPE Jaguar Land Rover

ADVICS, Advil, Ahmad Tea, Aizel.Ru, Batiskaf-marketing, Bififrm, Bosch, BQ Smartphones, Centrum, Club Med, Cordiant, Exprof, Ford, glamour, Hankook Tire, Hill's, Imedeen, IQ Media, IQOS, LADA, Linex, MAN, mr doors, MR Group, Mr Muscle, Multi-tabs, New Balance, Pepsico, Porsche, PwC, Renault, Rezyapov, Royal Caribbean International, SAP, SharpLase, Strix, Tenda, Termacare, Volkswagen, Volvo Car Russia, Weleda, Whiskas, Zumba, Ariadna-GROUP, ARTRA, Beeline, Blesk, “DACHA pressa.ru” newspaper, Dushy, Elagino Park, Kagocel, K rcher, MIC (Moscow Mortgage Centre), Movista, MUZ-TV, Museum of the Rise of the Machines, Nazaval Plus, Regional Television, ONLINETRADE.RU, PIK GROUP, Chain AZS TRASSA, Sibpromstroi, Sloboda, SMP Bank, Snezhnaya Koroleva (Snow Queen), Sovest’ (Conscience), TransTelekom, Ellaia, Eltacin

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2. MAIN FINDINGS2.1. 10 CONCLUSIONS DRAWN FROM THE RESEARCH

1. Digital advertising keeps showing a growth. 55% of the respondents said that their budgets for interactive advertising had increased in 2018, and 53% expected to have an increase in 2019. At the same time, only 36% of respondents forecast an increase in advertising in general during the same period. The digital advertising share in the advertising budgets accounts for 38%, and more than half of the respondents are planning to have its further growth.

a. Retailers prefer a budget increase in interactive advertising at the level of 73%, specialists in the automobile industry – 67%, in the pharmaceutical industry – 61%. These digital advertising sectors are the most promising for today.

b. Digital advertising accounts for 36% in the budgets of major advertisers on average. It is 4% more than in 2017. It is less than the digital advertising share on the whole advertising market, but you should take into account that some digital shares of small advertisers are higher, because TV and radio advertising is not affordable for them. In addition to the above, 67% of the respondents indicated that the digital share at their companies were increasing.

2. Main growth facilitators: time spent online, the possibility of measuring the effect of interactive advertising efficiency precisely, a wide selection of target audiences.

3. Interactive advertising is more efficient in conjunction with other channels. Advertisers have reinforced in the view that using only interactive advertising is not enough efficient to achieve the goals of an advertising campaign. More than three quarters of the respondents believe that it needs to be used in conjunction with other tools and, in this case, a synergistic effect is possible. Advertisers use three advertising channels on average. Besides interactive advertising, TV and outdoor advertising also play a crucial role.

4. A wide mixture of digital tools. The tendency to use a great number of interactive tools in advertising campaigns remains unchanged. Advertisers use 7-8 advertising tools on average. Targeted advertising in social networks (85% of the respondents), search advertising (74% of the respondents) and banner advertising (68% of the respondents) are used the most.

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5. The most evolving interactive tool is targeted advertising in social networks. According to the opinions of the respondents, targeted advertising in social networks is not only the most widely used tool, but it is also the tool with the greatest potential in term of growth. 50% of the respondents are planning to ensure an increase in the usage of targeted advertising in social networks in their advertising campaigns. The most significant increase is also planned for search advertising (33% of the respondents) and different formats of digital video.

6. Most of the respondents expect an increase in the budgets for video advertising both on the Internet and on TV in 2019. 87% of the respondents emphasized that they were going to increase their budgets for different types of digital video in 2019. According to the opinions of the respondents, an average growth will be in the range of 20%. Most of the companies have separated budgets for different formats of digital video and TV and related funds are allocated separately.

7. Retargeting is the most used advertising technology at the moment, in respondents’ opinion. It was used by 68% of the companies in 2018. The next used technique was digital video in social networks (it had been used by 61% of the respondents) and native advertising (55% of the respondents). The digital video format on a pay-for-performance basis, automated generation of advertising messages, cross-media planning – all these sectors have the greatest potential to grow. In 2019, 43%, 42% and 37% respectively are planning to use them.

8. Experiments in the digital field carried out with advertising technologies and formats are an essential part of digital campaigns. At least 5% of their budgets are spent on such experiments by all the interviewed representatives of the advertisers. The advertisers usually allocate 15% of the budget on average to different experiments. Appx. 10% of the companies allocate more than 30% of their budgets on average to different experiments. The respondents are mostly interested in offline conversion tracking (32% of the respondents), performance retail – cashbacks, coupons (32% of the respondents) and data enrichment (30% of the respondents).

9. Mobile advertising is becoming a standard tool. It has been already emphasized in the previous researches that mobile advertising has turned from an experimental area (this is how it was considered several years ago) into a fully legitimate part of digital strategies. The trend keeps going in this year. The share of those who place mobile advertising somewhere between ”it is one of the elements of the digital strategy” and “unconditional priority in the digital strategy” accounts for 74%. 17% of the interviewed companies assess the role

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played by mobile advertising in their own marketing strategy as one that have top-priority or considered to be one of the most important parts.

10. Experts on interactive advertising. Interactive advertising at the companies is created and monitored by 4 people on average. More than half of the respondents did not change a number of the experts in charge in 2018 and they are not going to change it in 2019. More than one quarter pointed out that their department of interactive advertising had enlarged in the past year and they were going to enlarge even more in the current year.

2.2. CHANGES ON THE MARKET AS VIEWED BY ADVERTISERS

“Indeed, the Russian market of interactive advertising is changing rapidly, and marketing experts want to make the most of new technologies. The research testifies that the market development is moving to the people-based communication and integration of several communication channels into a unified system. With the emergence of the players providing data retrieved through Wi-Fi Radars, these communication service providers and fiscal data operators (FDO) we have reached a turning point in terms of the implementation of online and offline linking to build up a marketing strategy for a brand.

I should also emphasize an increase in the application of AI-based technologies that have interpenetrated into communication between brands and customers. The analysis of big data carried out using artificial intelligence allows to reveal fine insights about customers, identify the most optimal communication channels and forms the basis for a marketing strategy of a brand in general, what provides an ultimate personalized address to the target audience.

The vector to supreme customization also affects an approach to the development of creative content as well, that is why we observe an increase in the usage of the Dynamic Creative Optimization technology (DCO) that allows to change the view of the creative used in an online ad, depending on different triggers”.

Anzhela Fedorchenko, Managing Director of Weborama in Eastern Europe and Central Asia

Vice President of the non-governmental organization IAB RussiaCo-Chairwoman of the Joint Industry Committee at IAB Russia

for Big data & Programmatic

Advertisers’ opinions on crucial changes on the interactive advertising mar-ket can be learnt by asking them the following question ”Which major changes happened on the interactive advertising market for the last 6-12 months can you point out? (it was an open question)”. The emerging or development of new adver-tising technologies, cross usage of the data from online to offline and vice versa, the development of the digital out of home technology are considered to be the

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main changes for the last year. It should be noted that the responses variability rate has shown a significant decrease for the last three waves of the research.

Fig. 2.1. Which major changes happened on the interactive advertising market for the last 6-12 months can you point out? (Free responses grouping).

39%

32%

21%

24%

New technologies

Cross usage of online/offline data

Digital out of home

Other responses

The respondents point out an increase in the usage of new technologies, the further development of the already existing technologies and interactive advertising landscape that is getting more and more complicated:

• Newly emerged tools,• Several new formats and new approaches to paid search,• New formats of native advertising that enable its integration into photo content,• Development of audio content and, therefore, audio advertising due to the

fact that podcasts and streaming music services are evolving,• Newly emerged advertising formats, • Creatives personalization,• Further complication of working algorithms and, respectively, an increase

in a number of specialists for work,• An increase in the popularity of machine learning, AI, VR. Increased use

of data, different tracking models, programs for automated optimization for advertising placement. Everyone transfers their investments into such segments as online video and mobile advertising,

• Dawning of the AR-format age,• Advancements in technologies and improved access to them.

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There is one more trend indicated by the respondents, namely the usage of offline data for planning and analytics of online campaigns:

• FDO allows matching online to offline,• Increasing targeting opportunities for offline data, • Matching offline checks (30% of the market) to digital activities,• Pilot advertising placements based upon offline data,• Utilization of the data about offline buyers in digital.

Among new technologies, many respondents pointed out in particular the development of digital out of home advertising. Although it is not a new tool alone, and it has been existing for the last few years, it can be found in several direct references of several respondents for the first time:

• Active DOOH sales, • RTB DOOH strengthening,• Digital outdoor advertising suitable for license plates recognition and targeting.

At the same time, many participants specified that the market had become more consistent for them and there were no significant changes that were noticeable for them:

• ”there were no any influential changes to be noticed”,• ”I haven’t noticed any obvious changes”,• ”no changes”,• ”unfortunately, we don’t monitor changes on the market through RA. We

haven’t noticed any changes.”,• ”nothing special, except weather targeting on MyTarget”,• ”I haven’t noticed any rigorous changes, there are some, but they are not fatal”,• ”nothing special, brands started to be more attentive by choosing different

tools for interactive advertising”.

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3. ABOUT THE RESEARCH

3.1. METHODOLOGYTraditionally, IAB Russia Digital Advertisers Barometer 2019 research is based

upon the survey among advertisers. They filled in a questionnaire online through SurveyGizmo. The questionnaire

contained 30 open and closed questions.To fill in the questionnaire, we invited major advertisers, namely, employees

who are in charge of advertising budget allocations at the company. The IAB Russia Association searched for the respondents and engaged them for participation.

Questionnaires collection was performed from April to August 2019. After having excluded incomplete questionnaires, doublets (new added responses from the advertisers who have been already interviewed) and questionnaires with lower validity (contradictory responses, impossibility of verifying a respondent), we formed the data array of 139 questionnaires serving as a basis for the present report.

3.2. RESEARCH COVERAGE AND COMPOSITION OF THE REPRESENTATIVES 137 brands and companies have taken part in the present research.More than half of the respondents (70%) are represented by people who make

decisions on interactive advertising budget allocations, typically, marketing directors and advertising directors. A quarter of the respondents are in charge of making decisions on online advertising budget allocations (usually, on the whole advertising budget, but not only of its digital part); in particular, this group is represented by advertising managers and brand managers. Almost three quarters of the respondents have been working in the marketing and advertising industry for more than 5 years.

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Fig. 3.1. Do you make any decisions on advertising budget allocations?

I don’t take part in advertising budget allocations

I take part in advertising budget allocations

I make decisions on online advertising budget allocations

I make decisions on advertisingbudget allocations

55%

15%

25%

5%

Participation in budget allocations

Fig. 3.2. How many years have you been working in the marketing and advertising industry?

How many years in marketing

Less than 3 years 9%

3-5 years 18%

6-10 years 17%

More than 10 years 56%

Most of the respondents (91%) are representatives of offline companies, 9% of the respondents work at the companies that have been established initially and have been working till nowadays only online. More than two quarters of the respondents (65% of the respondents) work at manufacturing companies (just as in 2018, this group is represented only by the companies, which have come from offline – FMCG, automobile, medicine and electronics manufacturers

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etc.), retailers account for 5% (including Internet shops, as well as offline and omnichannel distribution networks; clothes and shoes, home furnishings retailers are presented more widely), 13% of the respondents are providers of different services (prevalently, they are providers of communication services, banks and insurance companies). 17% of the interviewed companies have been classified as ”Others” in the research – this category is represented by estate agents, companies of the entertainment and leisure sector, state companies, media.

35% of the interviewed companies have been categorized as FMCG, 12% – as companies of the automobile industry, the pharmaceutical companies account for 9% and estate companies and telecommunication companies add 5% per each above-mentioned type of companies.

Fig. 3.3. Categorizing the interviewed companies.

Online-/offline companies

■ Online■ Offline

91%

9%

65%

17%

13%

5%

Type of a company

■ Manufacturer

■ Retailer

■ Service

■ Others

35%

12%9%5%

5%

34%

Category of a company

■ FMCG

■ Auto

■ Pharma

■ Estate

■ Telecom

■ Others

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4. ADVERTISING BUDGETS DYNAMICS

IAB Digital Advertisers Barometer reports usually encompass the matter of advertising budgets dynamics. The survey participants were asked about their actual expenditure on advertising in 2018 and about their expectations related to the advertising budgets in 2019, as well as about the share allocated to the digital segment within the company’s budget.

4.1. EXPENDITURE ON ADVERTISING IN 2018 More than half of the respondents (55%) indicated an increase in the budget

allocated to interactive advertising last year. Moreover, 18% said that their budget had gone up by more than 20%. Almost one quarter of the respondents pointed out that the budgets of their companies and brands for interactive advertising had remained the same.

Fig. 4.1. How did the advertising budget of your brand (in RUB) change in 2018 in comparison to 2017?

Interac�ve adver�sing

Offline adver�sing

Adver�sing in general

0%

5%

10%

15%

20%

25%

30%

35%

Increa

se by

50% an

d mor

eInc

rease

by 21

-50%

Increa

se by

11-2

0%

Increa

se by

less

than

10%

No cha

nges

Budge

t red

uctio

n

Not su

re

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In 2018, the online and offline companies showed different growth curves. 41% of the online and 57% of the offline companies recorded a growth. Last year 25% of the online companies and only 11% of the offline companies showed a rigorous growth (more than by 50%). The budget allocated by 17% of the online companies and 27% of the offline companies remained the same. Along with that, it should be noticed that the survey in that year comprises a very small number of the online companies, what results in limiting the ability to draw consistent conclusions from their responses. At the same time, it is important that a number of online businesses that operate purely online among major advertisers is constantly dropping.

Fig. 4.2. How did the interactive advertising budget of your brand (in RUB) change in 2018 in comparison to 2017? Comparison between the online and offline companies.

Companies from online

25%

8%

8%

17%

9%

33%

11%

6%

17%

23%

9%

8%

8%

Increase by more than 51%

Increase by 21-50%

Increase by 11-20%

Increase by less than 10%

Remaining at the same level (+-3%)

Budget reduction

Not sure

Companiesfrom offline

27%

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If we draw a comparison between separate types and categories of the companies, we notice that the largest increase has been recorded by the retail companies (86% of the respondents from this sector stated that their budgets had increased) and companies in the automobile industry, moreover, significant reductions of the budgets, as last year, are common to FMCG companies, and none of retail companies did claim that their budgets had been cut down.

Fig. 4.3. How did the interactive advertising budget of your brand (in RUB) change in 2018 in comparison to 2017? Comparison based upon the types and categories of the companies.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Not sure

Budget reduc�on



Increase by 11-20%

Increase by 21-50%


Manufa

cturer

Retaile

r

Service

FMCGAut

o

Pharm

a

9% 14%

11% 14%6%

5%

14%

6%

8%

38%17% 29%

13%

25%

23%

11%

17%

22%

27%

19%

26%17%

17%

10% 17% 6%9%

8%

21%

6%

8%

15%

23%

23%

23%

8%

29%

6%

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4.2. ADVERTISING EXPENDITURE PROJECTIONS IN 2019More than half of the interviewed companies (53%) expect an increase in

their budgets allocated to interactive advertising in 2019. About one quarter of the respondents assume that the budget will remain the same, in comparison to the last year. Moreover, an increase in the budget allocated to advertising in general and to offline advertising is assumed only by 36% and 21% respectively. Consequently, it may be assumed that the main growth of the advertising budget (like in the previous years) will be achieved through an increase in the budget allocated to interactive advertising.

Fig. 4.4. How will the advertising budget of your brand (in RUB) change in 2019 in comparison to 2018?

0%

5%

10%

15%

20%

25%

30%

35%

40%

Increa

se by

50% an

d mor

eInc

rease

by 21

-50%

Increa

se by

11-2

0%

Increa

se by

less

than

10%

No cha

nges

Budge

t red

uctio

n

Not su

reInterac�ve adver�sing



A budget growth is expected by one third of the online companies and more than half of the offline companies (34% and 54% of the respondents). In so doing, like in the previous years, the interviewed online companies forecast a more rigorous growth than the offline companies. Therefore, 25% of the online companies and only 13% of the offline companies expect to have an increase by more than 20%.

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Fig. 4.5. How did the interactive advertising budget of your brand (in RUB) change in 2019 in comparison to 2018? Comparison between the online and offline companies.

Increase by 51%

Increase by 21-50%

Increase by 11-20%


No changes

Budget reduc�on

Not sure

Companies from online

8%

17%

9%

25%

16%

25%

3%10%

18%

23%

27%

10%

9%

Companiesfrom offline

If we carry out an analysis taking into account the companies’ types, all the types of the companies will enlarge their budgets in 2019. Retail companies place their hopes more than others – 73% of them said that their interactive advertising budgets would grow. Among all the categories, the companies of the automobile industry and the pharmaceutical companies expect to have the most rigorous growth (67% and 61% respectively).

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Fig. 4.6. How did the interactive advertising budget of your brand (in RUB) change in 2019 in comparison to 2018?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%13% 13% 10%

5%15%

8%11%

29%

22%

27%23%

15%29%

13%

15%22%

33%

27% 15%

27% 17%

22%

6%

23%22%

7%

11%

7%

9%

17%

19%

20%

7%14%

10%

7%

Not sure

Budget reduc�on



Increase by 11-20%

Increase by 21-50%


Manufa

cturer

Retaile

r

Service

FMCGAut

o

Pharm

a

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4.3. EXPENDITURE DYNAMICS FOR 2014-2019 The curve describing the interactive advertising expenditure in this year

corresponds to the curve in the previous years. It has been already emphasized in the previous researches that a rigorous budget increase in 20% and more will slow down. In 2014, 33% of the companies fell under this category, in 2016-2018, the share of the companies that allocate more funds to interactive advertising accounts for appx. 20%, and in 2019, 15% of the companies intend to increase their expenditure on interactive advertising in such volume. The share of the companies that keep their interactive advertising expenditure unchanged is stable within the last 3 years and constitutes about 25%. Like in the previous two years, appx. 10% of the companies are planning to cut down their budgets.

Fig. 4.7. How did the interactive advertising budget of your brand (in RUB) change last year? (Surveys data for 2015-2019, excluding “not sure” responses).

0%

5%

10%

15%

20%

25%

30%

2014

2015

2016

2017

2018

2019 (projec�on)

Increa

se by

50+%

Increa

se by

21-5

0%

Increa

se by

11-2

0%

Increa

se by

less

than

10%

No cha

nges

Budge

t red

uctio

n

If we compare the responses given about the actual changes in the budgets in 2018 to the responses related to the projections for 2019, it can be pointed out that the budget growth/reduction curve remains the same in general. The companies are planning to continue to enlarge investments into interactive advertising more than into offline advertising, but the growth rate is slowing down. In addition to it, many companies are projecting to reduce their budgets on interactive advertising.

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Fig. 4.8. How did/do the interactive advertising budget of your brand change (in RUB)? Comparison between the responses given in 2018 (actual) and in 2019 (projection).

0

20

40

60

80

100

Interac�ve adver�sing


2018 2018 20192019 2019 2018

No changes

Increase by 11-20%

Increase by 21-50%

Increase by 50+%

Budget reduc�on

Not sure


5%

4%2%5%5%

7%

7%

1%

14%

18%

29%

27%

11%

2%3%6%

14%

29%

35%38%

37%

9%

17% 17%

13%

13%

13%

14%

10%

7%

16%

9%

11%

21%

26%

4%

11%

11%

21%

17%

26%

10% 10%

Increase by 10% and less

The share of the companies that are increasing their budgets in 2018 and expect to increase them in 2019 is higher among the online companies (62% indicated a growth in 2018 and 57% expect to have it in 2019 respectively), among service providers (63% indicated a growth in 2018 and 70% expect to have it in 2019) and companies in the automobile industry (60% indicated a growth in 2018 and 60% in 2019).

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Fig. 4.9. Companies that are planning to increase their interactive advertising budgets by more than 20% in 2019 (projection).

31%

22%

25%

13%

13%

16%

15%

15%

PharmaAuto

FMCG

ServiceRetailers

Manufacturers

Offline companiesOnline companies

According to the findings of the researches carried out in 2018-2019, the projected budget growth/reduction in terms of allocations to interactive advertising comply with the actual estimations in general. The respondents felt more optimistic about offline advertising, as the actual rates were.

Fig. 4.10. Budgets for 2018 – projections (according to the survey in 2018) and the actual numbers (according to the survey in 2019).

0%

20%

40%

60%

80%

Interac�veadver�sing

Adver�singin general

Offlineadver�sing

Increase by 50%+

Increase by 21-50%

Increase by 11-20%

Increase by 10% and less

No changes

Budget reduc�on

Projec�on Actual numbers



6%

9%

21%

12%

20%

24%

11%

7%

26%

9%

16%

22%

4%3%

24%

36%

8%

14%

2%3%

29%

35%

6%

14%

5%

8%

38%

14%

11%

15%

2%

7%

29%

17%

13%

18%

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4.4. DIGITAL ADVERTISING SHAREThe average digital advertising share for all the interviewed companies in

2019 is projected to be at the level of 36%. Among the interviewed companies, 15% consider interactive advertising one

of the main advertising budget items, it accounts for three quarters of the budget. For 43%, interactive advertising is one of the top placement channels, it accounts for 30%-75% of the overall advertising budget. Also 26% of all the interviewed companies spend on interactive advertising less than 30%, but more than 15% of their advertising budgets. And only 12% of the respondents think that digital advertising is not a significant placement channel, they allocate less than 15% of the whole advertising budget to it.

Fig. 4.11. Name the share allocated from the advertising budget (projection for 2019) to interactive advertising.

12%

26%

28%

15%

15%4%

Less than 15%

15-30%

30-50%

50-75%

75% and more

Not sure

A digital advertising share depends on a company’s type heavily. The digital advertising share for the offline advertisers is appx. 33%. The online companies spend on interactive advertising remarkably more – the digital advertising share in their budgets is 72%.

The service providers (interactive advertising accounts for more than half in their budgets) and automobile manufacturers (they spend on digital advertising 41% of their budgets) spend on digital advertising more than average. The

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manufacturing companies (the digital share in their budgets is 27% on average) and FMCG companies (21%) spend on interactive advertising less than average.

Fig. 4.12. Average digital advertising share in the advertising budgets in 2019 – comparison based upon the types and categories of the advertisers.

26%

41%

21%

48%

34%

27%

33%

72%

Pharma

Auto

FMCG

Service

Retailers

Manufacturers

Offline companies

Online companies

4.5. AN INCREASE IN THE DIGITAL SHAREFor the first time in several years of measurements, the digital share in the

companies’ structure of expenditure on advertising increased slightly, by only 4 p.p.

Fig. 4.13. Dynamics in the average digital share in the advertising budgets of the companies.

36%

32%

27%

2019 (projec�on)

2018

2017

As assessed by the respondents, all the types and categories of the companies increase a share on interactive advertising.

25


Fig. 4.14. Dynamics in the average digital share in the advertising budgets of the companies.

33%

2017

2018

2019 (projec�on)

3 - Manufacturers4 - Retailers5 - Service

1 - Online companies2 - Offline companies

1 2 3 4 5 6 7 8

6 - FMCG7 - Auto8 - Pharma

57%

68%72%

22%

31%35%

42%

48%

31%32%

34%

17%19%

21% 22%23%

26%

33%38%

41%

24%

18%

27%

10

20

30

40

50

60

70

80

An increased share in interactive advertising within the brand’s budget is also testified by the responses to the open question ”If we speak about general tendencies relevant to the last and current years, so how has the interactive advertising share (including both desktop and mobile advertising) been changing within the advertising budget of your brand?” By answering that question, 67% of the respondents pointed out that their digital share was increasing.

Fig. 4.15. If we speak about general tendencies relevant to the last and current years, so how has the interactive advertising share (including both desktop and mobile advertising) been changing within the advertising budget of your brand?

67%

24%

4%5%Increase

At the same level

Reduc�on

Not sure

Digital share dynamics in 2018

26


It is predictable that a share growth is peculiar, first of all, to the online companies (100% of the relevant interviewed companies pointed out a growth). Like in the survey conducted last year, the service providers (more than 73% of the interviewed respondents) and the pharmaceutical companies (100% of the interviewed respondents) are projecting a share growth. The question if a digital share grows within the advertising budgets was more often replied in the negative by the companies, which digital share does not exceed 30% and that do not consider that channel to be a leading one, and by the online companies, which digital share is more than 75% and they struggle to increase their presence effectively.

4.6. GROWTH FACILITATORSThe respondents brought up the following matters as the main reasons that

cause an interactive advertising share to increase: “increased time spent by the respondents online” and “possibility of measuring the effect made by the investments into digital advertising in an accurate way” (25% and 24% respectively), as well as “a wide selection of target audiences”, “efficiency of interactive advertising” and “increased number of people using the Internet via mobile devices” (22% of the respondents per factor). (The respondents were allowed to choose 1-3 options).

Fig. 4.16. Name the main reasons and growth facilitators for the interactive advertising share within the advertising budget of your brand.

25%

24%

22%

22%

22%

19%

15%

14%

14%Decreased efficiency of traditional advertising

Increased number of Internet users

Possible integration of online and offline campaigns

Possible dynamic targeting

Increased number of people using the Internet via mobile devices

Efficiency of interactive advertising

A wide selection of target audiences

Possibility of measuring investments

Increased time spent online

27


In addition to the reasons listed on the figure, there were also such answers as “interactive advertising is cheap”, “it is the strategy chosen by the international headquarter, a focus on digital advertising”, “decrease in the items of the used media tool set”, “a model behavior conduct from rival companies”, “rise in prices of interactive advertising, media inflation”. All these options cannot be considered significant ones, because less than 5% of the respondents chose them.

The online and offline companies estimate the growth facilitators for interactive advertising alike. The online companies appreciate” the possibility of measuring the investments into interactive advertising” and “a wide selection of target audiences” (28% of the respondents), while offline companies think it is important to take into account time spent by the audience online (25% of the respondents).

Fig. 4.17. Reasons and growth facilitators for the interactive advertising share in the advertising budget – comparison based upon the respondents’ categories.

1

2

3

4

56

7

8

9

Offline Online

1 – Increased time spent online2 – Possibility of measuring investments3 – A wide selection of target audiences4 – Efficiency of interactive advertising5 – Increased number of people using the Internet via mobile devices6 – Possible dynamic targeting7 – Possible integration of online and offline campaigns 8 – Increased number of Internet users 9 – Decreased efficiency of traditional advertising

5%10%15%20%25%30%

4.7. BARRIERS TO GROWTHAs usual, the respondents were asked the following question “What obstructs

your facilitated increase in the interactive advertising share?” Like in the previous years, the respondents were reluctant to respond to this

question, and none of the factors can be considered a defining one. Among the most popular answers you can find the following statements: ”interactive advertising is not able to sort out certain marketing tasks” and “a shortage of well-qualified specialists”, they were pointed out by 7% of the respondents per each statement. Also, respondents’ interactive advertising shares are held back from their further growth by high costs and a shortage of much-in-demand tools.

28


Fig. 4.18. What obstructs your facilitated increase in the interactive advertising share within the advertising budget?

1 – Interactive advertising is not able to sort out certain marketing tasks 2 – Shortage of well-qualified specialists in the field of interactive advertising 3 – Interactive advertising is too expensive 4 – Shortage of much-in-demand advertising tools

1 2 3 4

7% 7%

4% 4%

4.8 ATITTUDE TO INTERACTIVE ADVERTISINGThe respondents were asked to estimate how much they agreed with the

statements about interactive advertising indicated below:

Agreed, 2019

Interactive advertising is more e�cient, if it is used in conjunction with other advertising types 76%

All interactive advertising on the Internet will become targeted and personalized in years to come 65%

Interactive advertising campaigns are ine�cient without the usage of the services designated for end-to-end and cross-platform analytics 60%

In 2019, mobile channels will become overriding in comparison to desktop channels 53%

In a few years, there will be no distinction between classical and mobile advertising 50%

All types of advertising will become interactive down the line 47%

Technologies used in interactive advertising are very complicated to understand and implement 42%

Interactive advertising is the most e�cient type of advertising 36%

In years to come, people will be selling all interactive advertising at auctions 35%

Mobile advertising is not compatible with classical advertising in terms of budgets volumes for advertising 30%

Any e�cient advertising campaign needs wide coverage, narrow targeting is only a trendy toy 14%

Interactive advertising allows to abandon other types ofadvertising altogether 13%

29


5. MARKETING MIXTURE

5.1. MARKETING AND ADVERTISING BUDGETThe brands allocate about half of their marketing budgets to the actual

advertising activities (namely, for purchasing advertising places in media). The average share of advertising expenditure both in the overall marketing budget and in the budget for interactive marketing is 48%.

28% of the companies spend more than three quarters (75% and more) of the marketing budget on purchasing advertising places in media, like in the previous year. The companies, which spend almost the overall interactive budget on purchasing tools, account for 34%.

Fig. 5.1. How much funds do you actually allocate to the advertising activities from the whole marketing budget/ Internet marketing budget?

Budget share for interactive

advertising

Less than 15%

15-40%

40-75%

More than 75%

18%

16%

18%

31%

35%

20%

34%

28%

Share of the marketing budget

The shares spent on the actual advertising activities at the online and offline companies are comparable. The retailers (56%) and pharmaceutical companies (70%) have the shares exceeding the average rate that exists on the market.

30


Fig. 5.2. How large is the share of the actual advertising costs within the Internet marketing budget?

Pharma

Auto

FMCG

Service

Retailers

Manufacturers

Offline companies

Online companies

70%

44%

45%

40%

56%

49%

47%

49%

5.2. A NUMBER OF THE USED ADVERTISING CHANNELS Within the framework of the research, we asked the questions not only about

the usage of online media, but also about offline channels – TV, periodicals and newspapers, radio and outdoor advertising.

The respondents use about 4 channels in their advertising campaigns. Only one channel (interactive advertising without regard to mobile advertising)

is used by 4% of the respondents, almost half of the respondents use 5 advertising channels and more (including in two channels for interactive advertising – desktop and mobile advertising).

It is important to point out that such marketing mixture keeps expanding. In 2017, only 27% of the companies use five and more channels in their advertising campaigns, but their number increased up to 42% in 2019.

31


Fig. 5.3. Distribution of the advertisers based upon the number of the used advertising channels.

35%

1 channel

2 channels

3 channels

4 channels

5 and more channels

4%10%

18%

25%

43%

The number of the used advertising channels depends on a type of a company. Interactive advertising alone is used among the online companies twice as often as offline companies use it. Moreover, offline companies use more than 5 advertising channels half again as often in their campaigns.

The automobile companies use a lot of advertising channels in their campaigns, more than others. For example, 77% of the automobile companies use more than 5 channels, and only 6% of the interviewed companies use less than 3 channels.

Fig. 5.4. Number of the used advertising channels: comparison between the respondents’ categories.

0

20

40

60

80

100

5+ channels

4 channels

3 channels

2 channels

1 channel

Pharma

Auto

FMCG

Servi

ce

Retaile

r

Manufac

turer

Offline

Online

8%

18%18%

17%

18%

24%

25%

43%

4% 6%

9%

9%4% 5%2% 2%3%

11% 10%

19%

22%

12% 13%

24%

24%

26%36%

38%

45% 44%

44%

33% 34%

77%

17%10%

14%32%

32


5.3. BESIDES DIGITAL ADVERTISING: TV, RADIO, PERIODICALS AND NEWSPAPERS, OUTDOOR

Among offline media, TV, outdoor advertising, periodicals and newspapers are almost equally popular. (We asked a question about the usage of one or the other channels in general, but not about the absolute budgets allocated to each channel).

Fig. 5.5. Used offline advertising channels. Comparison between the online and offline companies.

0

10

20

30

40

50

60 All

Online companies

Offline companies

55%

42%

57%

42%

55%53%

51%

33%

52%

33%

40%39%

TV Outdooradvertising

Periodicals and newspapers

Radio

Offline media ranks by popularity vary greatly depending on an advertisers’ category: the manufacturers and FMCG-companies have the highest penetration level of TV advertising (whereby the vast majority also use periodicals and newspapers and outdoor advertising).

Most of the retailers use outdoor and TV advertising. Service providers use all the channels almost equally.

TV is the most popular offline channel for the FMCG and pharmaceutical companies. The representatives of the automobile industry pointed out that they used radio as an advertising placement channel most often.

33


Fig. 5.6. Used offline advertising channels. Comparison based upon the types of the companies.

Manufacturer

Retailer

Service

88%

63% 63%



Radio

0

20

40

60

80

100

75%

42%48%

63%

54%

38%34%

38%

62%

Fig. 5.7. Used offline advertising channels. Comparison based upon the categories of the companies.

FMCG

Auto

Pharma



Radio

0

20

40

60

80

100

71%

64%

29%

65%71%

45%

29%

41%

74%

14%

95%

69%

34


6. DIVERSITY OF DIGITAL ADVERTISING

6.1. USED TOOLS OF INTERACTIVE ADVERTISING The respondents called targeted advertising in social networks the most

popular tool of interactive advertising, it was used by 85% of the respondents. The next popular formats are search advertising (74% of the respondents) and banner advertising (68% of the respondents) .

The same formats have been keeping the lead within the last three waves of the research, moreover, targeted advertising in social networks and search advertising are used more and more often, while the popularity of such format as banner keeps waning.

Fig. 6.1. Used advertising formats.

0%

20%

10%

30%

50%

70%

40%

60%

80%

90% 2019

2018

2017

Targ

eted

@SM

Se

arch

Ba

nner

Spon

sors

hip

Inst

ream

dig

ital v

ideo

Prog

ram

atic/

RTB

Mob

ileEm

ails

Clas

sifie

ds

In-g

ames

Digi

tal a

udio

Lead

gen

erat

ion

/ CPA

Мob

ile v

ideo

Rich

med

ia

Outs

trea

m d

igita

l vid

eoDO

OHLo

catio

n ba

sed

ad

Nativ

e

35


”As a Chairman of the Committee IAB Russia for Audio Advertising, I point out positively, that the share of advertising campaigns, when advertisers use digital-audio, has increased by 8% on average in the year, and for several categories of goods and services it has already reached 22%. It seems that audio advertising in particular and especially voice-enabled audio advertising (dialogue marketing) allows to overcome a wide range of challenges indicated by the advertisers in the course of the present survey. There is a need for customized creative, because it is simpler, faster and cheaper to produce customized audio creative, and speaking of dialogue marketing, in this case it is possible to build up completely personalized communication with each representative of the target audience in direct contact with him/her”.

Mikhail Iliichev, CEO Unisound

Chairman of the Sector Committee at IAB Russia for Audio Ad

A set of formats depends on a company’s type and category. Offline companies consider the following formats the leading ones: targeted advertising in social networks, banners and search advertising. The online companies need targeted advertising in social networks and search advertising, moreover, many online companies use lead generation, CPA-purchasing and email-marketing.

The widest disparity in the tools used by the online and offline companies is detected for banner advertising (50% and 93% respectively), lead generation/CPA (58% and 27% respectively), sponsorship (25% and 55% respectively) and instream digital video (used by 33% of the online companies and 61% of the offline companies).

36


Fig. 6.2. Used advertising formats. Comparison between the online and offline companies.

1 – Targeted @SM2 – Search3 – Banner4 – Native5 – Instream digital video6 – Sponsorship7 – Mobile8 – Emails9 – Programatic/RTB

12

3

4

5

6

7

8

91011

12

13

14

15

16

17

18

AllOnline Offline

20

40

60

80

100

10 – Мobile video11 – Lead generation / CPA12 – Rich media13 – Outstream digital video14 – DOOH15 – Location based ad16 – Classifieds17 – Digital audio18 – In-games

Disparities are also clearly seen by drawing a comparison between digital tools used by different types and categories of the companies. Targeted adver-tising in social networks keeps the lead for all the types of the companies. But the manufacturers and service providers often use banners, and retailers – search advertising. Native advertising is important to the manufacturers and retailers, and instream digital video and programmatic advertising buying – to service providers.

* It is necessary to bear in mind that a certain share of respondents doesn’t distinguish formats clearly. For instance, several respondents classified “Programmatic Advertising Buying (Programmatic/RTB)” as “Banner”, because a banner is used for showing an ad, and “Native advertising (Native)” can also fall under the category “Special projects/sponsorship”, because it is a relatively new advertising

format that implies the maximum similarity to the web site where the ad is placed.

37


Fig. 6.3. Used advertising formats. Comparison based upon the types of the companies.

12

3

4

5

6

7

8

91011

12

13

14

15

16

17

18

20

40

60

80

100

AllServiceManufacturer Retailer



Fig. 6.4. Used advertising formats. Comparison based upon the categories of the companies.

12

3

4

5

6

7

8

91011

12

13

14

15

16

17

18

20

40

60

80

100

AllPharmaFMCG Auto



38


6.2. BUDGETS FOR DIGITAL VIDEO AND MOBILE VIDEO

”One of the most important driving forces for the development of interactive advertising is understanding the value of targeted and personalized advertising provided by the digital environment. In recent years, video advertising has not offered anything new in that area: demographic targeting has been and remains the main type of targeting. However, next year we can expect a strong momentum to the further development of this area due to newly retrieved consumption data and, on the basis of this, the possibility of readjusting messages for a certain user dynamically.

Sergei Korenkov, Director for GPMD Development,

Co-Chairman of the Sector Committee at IAB Russia for Digital Video Ad

”The annual research gives the market an opportunity to “make sure the players are on the same page”, to check the consistency of the chosen strategies and tactics of media investments. To track the dynamics of such changes. IMHO considers it one of the ways to receive necessary signals regarding the renewal of our products. As a Co-Chairman of the Sector Committee at IAB Russia for Digital Video Ad, I would like to point out our particular interest to video advertising and draw the attention to customers’ plans in regard to a further increase of investments into this efficient tool”.

Nikolai Kiselev, Deputy Director General IMHO

Co-Chairman of the Sector Committee at IAB Russia for Digital Video Ad

The respondents, who had answered that they used digital video or mobile video advertising, were also asked about the budget allocated to such type of promotion and their projections concerning a cost increase in TV and digital advertising.

The majority of the respondents believe that both TV advertising and video advertising on the Internet will become more expensive. Only 9% of the respondents project a decrease in the expenditure.

39


Fig. 6.5. How, in your opinion, will advertising costs on TV/video advertising on the Internet in 2019 change?

57%23%

9%11%

48%

36%

9%7%

It will become more expensive

No changes

It will become cheaper

Not sure

TV Video advertising on the Internet

87% of the respondents said that they were planning an increase in the budgets for advertising on the Internet. Companies are planning to increase their budgets by 20% per year on average.

Fig. 6.6. Are you planning to increase your budget for video advertising on the Internet in 2019?

We are not planning to increase the budget

We are planning an increase by 10%



We are planning an increase by 40% and more

13%

41%15%

15%

16%

Almost half of the respondents said that their companies allocated separate budgets (independent from TV ad) to place different types of digital and mobile video advertising. About 20% responded that video advertising on the Internet and TV advertising were unified into one channel for communication with a customer.

40


Fig. 6.7. While planning the expenditure structure on video advertising, does your brand allocate a separate budget to this type of promotion or redistribute these funds from the budget to TV advertising?

Reducing expenditure on TV advertising, increasing expenditure on video advertising on the Internet

No reducing expenditure on TV advertising, allocating a separate budget to advertising on the Internet

Our budget for TV and video advertising is unified

Not sure

Instream digital video

33%

46%

16%5%

Outstream digital video

23%

49%

25%

3%

Mobile video

18%

58%

16%

8%

6.3. NUMBER OF THE USED DIGITAL TOOLSAlthough new advertising tools are constantly emerging, its average number

in advertising campaigns remains stable according to the last measurements and amounts up to 7-8 advertising tools. 61% of the companies use 7 and more ad-vertising tools, and about one quarter – more than 10 interactive advertising tools.

41


Fig. 6.8. Distribution of the advertisers based upon their number of the used interactive advertising tools.

1-2 3 4 5 6 7 8 9 100%

3%

6%

9%

12%

15%

11 12 13+ Not sure

The online and offline companies differ in terms of the used advertising tools considerably. The offline companies use 7 tools on average, and the online companies – 13 tools. The automobile manufacturers also use a lot of advertising tools (10).

Fig. 6.9. An average number of advertising tools. Comparison based upon the types and categories of the companies.

0%

3%

6%

9%

12%

15%

Phar

ma

Auto

FMCG

Serv

ice

Reta

ilers

Man

ufac

ture

rs

Offlin

e co

mpa

nies

Onlin

e co

mpa

nies

All c

ompa

nies

42


6.4. ADVERTISING TOOLS DYNAMICS Despite the fact that targeted advertising in social networks is already a popular

format among the advertisers, half of the respondents, like in the previous year, pointed out that they assumed an increase in the share of that format in the structure of their interactive budgets. The respondents also named other increasing formats such as search advertising (33% of the respondents), instream digital video (30% of the respondents), mobile video (26% of the respondents) and native advertising (24% of the respondents).

Fig. 6.10. For which types of advertising listed below do you expect to have an increase in their shares in the general structure of funds allocated in your brand to interactive advertising?

2019

2018

2017

Targ

eted

@SM

Se

arch

Inst

ream

dig

ital v

ideo

М

obile

vide

o

Mob

ile

Nativ

e

Spon

sors

hip

Prog

ram

atic/

RTB

Clas

sifie

ds

In-g

ames

Rich

med

ia

Lead

gen

erat

ion

/ CPA

Outs

trea

m d

igita

l vid

eo

Loca

tion

base

d ad

DOOH

Di

gita

l aud

io

Prog

ram

atic/

RTB

Bann

er

0%

20%

10%

30%

50%

70%

40%

60%

80%

In addition to the question about the most increasing formats, the respondents were also asked about the process design solutions and formats used by their brands nowadays and their plans to use new process design solutions and formats in the future.

43


More than half of the respondents named “retargeting” (63% of the respondents), digital video in social networks (61% of the respondents) and native advertising (55% of the respondents) as the most used process design solutions. Like in the previous year, in respondents’ opinion, digital video advertising on a pay-for-performance basis, automated generation of advertising messages and cross-media planning of advertising campaigns have the greatest potential for growth.

Fig. 6.11. Which new solutions and formats in the field of interactive advertising are used by your brand or will be probably used this or next year?

We have been using it

We will be probably using

0%

20%

40%

60%

80%

100%

8 – Automation of advertising campaigns9 – Digital video on a pay-for-performance basis10 – Performance retail (cashbacks, coupons)11 – Automated generation of advertising messages 12 – Digital audio13 – Virtual reality, augmented reality14 – Purchasing apps on a pay-per-install basis

1 – Retargeting2 – Digital video in social networks3 – Native4 – Programmatic/RTB5 – Location based ad6 – Cross-media planning of advertising campaigns7 – Usage of the data from offline for online campaigns

1 2 3 4 5 6 7 8 9 10 11 12 13 14

The respondents who said that they used algorithm-driven transactions (Programmatic/RTB) were also asked about the types of such transactions and about the fact if there were any “private transactions”. The vast majority (40% of the respondents) know about such type as “private transactions”, but they do not single out for special attention this purchase type.

The share of private transactions accounts for about 25% of all the algorithm-driven purchases among those respondents who said that they were aware of such purchase type and single out private transactions as a separate purchase type, and it is 2.5 times higher than in the previous year. (A significant proportion of the respondents struggled to answer that question – about one third of the respondents were not sure about that).

44


Fig. 6.12. Do you single out private transactions and open auction tools within algorithm-driven purchasing (RTB)?

18%

40%10%

32%We single out private transactions

We know that private transactions exist, but we don’t single out them

We are aware only of open auction

Not sure

6.5. EXPERIMENTS IN THE DIGITAL FIELDThe respondents who took part in the survey were asked about a share

allocated in their interactive advertising budgets to experiments with new formats, technologies etc.

The respondents spend 17% of their budgets on experiments in the field of interactive advertising on average.

Fig. 6.13. Which share of your interactive advertising budget do you spend on experiments with new formats, technologies etc.?

Less than 5%

5-10%

10-20%

20-30%

More than 30%

7%

18%

44%

21%

10%

The respondents from the online companies think that they spend about 10% of their budgets on experiments, and the representatives of the offline companies – 17%. Such disparity can be also caused by the fact that some interactive advertising tools are considered to be standard ones for marketing experts from online companies, but new and experimental ones for representatives of traditional companies. Also, the representatives of the companies were asked about the

45


technologies that they were ready to implement under experimental conditions in 2019. Offline conversion tracking, performance retail and data enrichment arouse the greatest interest among the representatives.

In 2019, these technologies under experimental conditions are planned to be implemented by about one third of the companies.

Fig. 6.14. Which of the following technologies are you planning to implement under experimental conditions in 2019?

32%

32%

30%

29%

27%

23%

23%

17%

16%Impact assessment of interactive advertisingon sales with the assistance of specialized companies

Digital out of home

Usage of 3rd party audiencesfor advertising targeting

Post campaign analysis

Brand list studies

Offline audience activation

Data enrichment

Performance retail (cashbacks, coupons)

Offline conversion tracking

46


7. PLACE OF MOBILE ADVERTISING IN A DIGITAL STRATEGY

”The findings obtained in the research “AdBarometer 2019” show that 80% of the interviewed advertisers use mobile advertising in their marketing communications. In the previous year, the relevance of mobile advertising has increased even more, and a number of advertisers who use it minimally has dropped. These tendencies can be also observed both among the interviewed online and offline companies. Furthermore, there are a bit less advertisers in online business, who give the highest priority to mobile advertising in their marketing strategies. It can be explained by the fact that their business started to grow initially on the Internet, where mobile had already been a dominant platform, and they had mastered that tool before anyone else. Nowadays, Internet companies are looking for additional coverage in traditional media, first of all, on TV, and they use interactive advertising actively in conjunction with other types of advertising. According to the opinions expressed by more than 75% of the interviewed advertisers, such combo increases the efficiency of online advertising”.

Mikhail Tsuprikov, Director for Mobile Technologies and Products at Mediascope

Chairman of the Sector Committee for Mobile Advertising

10% of the respondents answered a direct question about the usage of mobile advertising and its place in a brand’s digital strategy as follows: they don’t use it at all (it must be noted that about one third of the respondents didn’t indicate mobile advertising – both standard formats and mobile video – among the involved tools by answering the question about the used types of digital advertising in the same questionnaire). For most of the respondents (45%), mobile advertising is one of the essential elements in their digital strategy. 17% think that it is an important and even key propriety area. About 10% of the respondents said that the role of mobile advertising in their strategy is limited to the minimum.

47


Fig. 7.1. Which of the following statements does describe the role of mobile advertising in your brand’s strategy concerning interactive advertising the best?

Role of mobile advertising is limited to the minimum

Not sure

We grant unconditional priority to mobile advertising in our digital strategy

Mobile advertising is one of the major areas for us in mobile advertising

Mobile advertising is just an element in our digital strategy

Mobile advertising is a new pilot area for us

We do not use mobile advertising at all45%

12%

10%

10% 10%6% 7%

The vast majority of the advertisers (both the online and offline companies) think that mobile advertising is one of the elements in their digital strategy (such response was given by 52% and 41% respectively). Such attitude to mobile advertising is mostly shown by the manufacturers and retailers. 20% of the online companies and 16% of the offline companies consider mobile advertising important and overriding.

Fig. 7.2. Role of mobile advertising in a brand’s digital strategy: comparison based upon the types of the advertisers.

0

20

40

60

80

100

Role of mobile adver�sing is limited to the minimum

A new pilot area for us

Not sure

We do not use mobile adver�sing at all

Just an element in our digital strategy

One of the major areas for us in interac�ve adver�sing

Uncondi�onal priority in our digital strategy

Servi

ce

Retaile

r

Manufac

turer

Offline

Online

7% 7% 7%7%

7%

4%

13% 9%

52%

8%8%

8%10%2% 2%

20% 8%

35%

50%46%41%

15% 16%

14%11%

10%

10%

10%

10% 10%

12%

12%

19%

48


8. METRICS AND ANALYTICS

8.1. PARAMETERS FOR THE EVALUATION OF ADVERTISING EFFICIENCYThe set and popularity level of the parameters for the evaluation of interactive

advertising efficiency have been almost the same for the last three measurements. The most popular parameter for the evaluation of advertising efficiency is an increase in website traffic (78% of the respondents focus their attention on it). The respondents also brought up the following parameters that they considered important for the evaluation of advertising campaigns efficiency: coverage gained by the advertising campaign (such answer was given by 65% of the respondents), involvement into communication with the brand and increasing frequency of search queries related to the brand (59% and 57% respectively).

Fig.8.1. Which parameters are tracked in your company to evaluate interactive advertising efficiency?

10%

20%

30%

40%

50%

60%

70%

80%

1 2 3 4 5 6 7 8 9 10 11 12 13 14

1 - Website traffic2 - Advertising campaign coverage3 - Involvement into communication with the brand4 - Frequency of search queries related to the brand5 - Brand awareness and attitude to it6 - Number of orders/sales transactions7 - Changes in overall financial indicators

8 - Frequency and sentiment of brand mentions on the Internet9 - Hitting the target audience10 - Number of phone calls11 - Increasing offline conversions12 - Share of brand’s ads among other advertisers in the same product category (SOV)13 - LTV – revenue a single user generates 14 - Number of mobile application installations

2019

2018

2017

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In addition to the above, the companies don’t tend to be guided by only one indicator, but they use their set in most cases. On average, companies track 6 efficiency parameters, and this rate is stable among different types and categories of the companies.

The respondents from the online companies, as well as the representatives of the retailers and service providers, along with website traffic, called a number of online orders and changes in overall financial indicators of the company as the metrics they use.

At the same time, some manufacturing advertisers, in particular FMCG, mentioned more often brand awareness and involvement of the audience into communication with the brand in social networks as the parameters they use. All the types and categories consider coverage an important indicator.

Fig. 8.2. Which parameters are tracked in your company to evaluate interactive advertising efficiency? Comparison between the online and offline companies.

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Online

Offline

All

10%

20%

30%

40%

50%

60%

70%

80%



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Fig. 8.3. Which parameters are tracked in your company to evaluate interactive advertising efficiency? Comparison based upon the types of the companies.

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Manufacturer

Retailer

Service

All

10%

0%

20%

30%

40%

50%

60%

70%

80%



Fig. 8.4. Which parameters are tracked in your company to evaluate interactive advertising efficiency? Comparison based upon the categories of the companies.

1 2 3 4 5 6 8 9 10 11 12 13 14710%

20%

30%

40%

50%

60%

70%

80%

Auto

Pharma

All

FMCG



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8.2. METRICS IN PERFORMANCE MARKETINGThe respondents were additionally asked about the efficiency metrics they

use to evaluate performance campaigns. In most cases, the respondents are not restrained to one of the metrics, but they use a bunch of them, 3-4 on average.

A click is still the most popular parameter for the evaluation of advertising efficiency, it is used by 70% of the respondents (but it must be noted that no one among the respondents uses only clicks to evaluate interactive advertising efficiency).

Like in the previous year, respondents’ answers testified that it is unlikely that the standard set of the used metrics will change drastically in the near future – there are a few responses “We don’t use them now, but we would like to do it” – their share fluctuates between 9% and 20% (or between 22% and 34% in percentage from the advertisers who don’t use a relevant indicator for now).

Fig. 8.5. Which indicators exactly are applied or planned to be applied by your brand by purchasing performance-based advertising?

70%

We have been using it

We will be probably using

Application installation

Purchasing goods or services

Registration on the website

Action taken on the website

Click8%

47%21%

38%23%

32%

25%

16%17%

Moreover, while analyzing the responses to the question about the metrics used for conducting the analysis of interactive advertising efficiency, you must remember that a proportion of the respondents might have evaluated interactive advertising in general, but not only its part related to performance marketing. That is why, if we take into account only the answers of the respondents who use performance tools, they use such metrics as “purchasing goods or services” and “registration on the website” predictably just as often as clicks to evaluate efficiency.

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8.3. USED ANALYTICS SYSTEMSMass specialized services for web analytics, such as Google.Analytics and

Yandex.Metrica, are still the most popular tools for digital analytics.The online and offline companies have different sets of preferable tools. The

offline companies use advanced studies conducted by specialized companies (such answer was given by 48% of the respondents) and own statistical and analytical services. It is intrinsic to the online companies to use paid services for web analytics, as well as own statistical and analytical services.

Fig. 8.6. Which tools are used at your company to evaluateinteractive advertising efficiency?

1 2 3 4 5 6 7 8

1 - Free services for web analytics2 - Advanced studies3 - Paid services for web analytics4 - Own statistical and analytical services

Online

Offline

All

0%

20%

40%

60%

80%

100%

5 - Services for monitoring digital video views (visibility, viewability)6 - Services for the evaluation of brand safety7 - Services for advertising placement auditing and conversions supervision8 - Services for fraud evaluation

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9. DEPARTMENTS OF INTERACTIVE ADVERTISING AT THE COMPANIES

The survey participants were asked a set of questions about the employees who are in charge of interactive advertising at their companies – about their number and changes in it in 2018 and 2019.

On average, there are 4 people who are in charge of interactive advertising at the company. This number is a bit higher for the online companies and service providers (5 people) and the lowest for the pharmaceutical companies (2 people).

Fig. 9.1. Number of the employees who are in charge of interactive advertising at the company.

Disparity between 1 and …

Average number of employees

0

5

10

15

20

25

30

35

40

All com

panie

sOnli

ne co

mpanie

s

Offline co

mpanie

s

Manufa

cture

rsRet

ailer

sSer

vice

FMCG

Auto

Pharm

a

4%

1-35% 1-35%

1-15%

1-12% 1-12% 1-12%

1-8%1-6%

1-35%

4% 4%3% 3% 2%5% 5% 6%

The respondents assess a number of the employees who are in charge of interactive advertising at the company as stable. More than half of the respondents said that their number had been the same since 2018 and would remain the same in 2019. In addition to it, about one quarter of the respondents enlarged their depart-ments of interactive advertising in 2018 and are planning to enlarge them in 2019.

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Fig. 9.2. How did/will a number of the employees who are in charge of interactive advertising at the company change?

Increased/Will increase

Remains/Will remain the same

Reduced/Will reduce

Not sure

2018 г.

29%

57%

3%11%

2019 г.

23%

56%

2%

19%

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10. TYPES AND CATEGORIES OF THE ADVERTISERS

10.1. ADVERTISERS-MANUFACTURERSAlmost half of the respondents (46%, including more than 60% within the

category of the advertisers who came from offline) are represented by manufac-turing companies (for instance, from the FMCG or automobile segments). This category of the respondents differs in their answers from other interviewed par-ticipants most considerably. Many differences have been already specified in the foregoing chapters of the reports, here you can find a summary that encompasses the most important and significant ones.

The manufacturing advertisers:

• Take a more conservative approach to increases in the budgets allocated for interactive advertising: having regard to the survey results, the increase in that category is, on average, lower that other advertisers have, and the budgets cuts in 2018 and the projection in 2019 are twice as much than the average value.

• Often consider an increase in the mobile audience (+11 p.p. in comparison to the average values calculated for all the respondents) and an overall increase in the Internet audience (+6 p.p.) the main growth facilitators for the digital share in their advertising budgets, while interactive advertising efficiency is less significant for this category of the advertisers.

• Particularly often mention such barriers obstructing a facilitated increase in the digital share in the advertising budgets as the impossibility of costs reduction related to advertising in other media, insufficient audience coverage by the Internet, the impossibility of sorting out certain marketing tasks using interactive ads.

• Less often agree with the statement that ”Internet advertising is the most efficient type of advertising”.

• Combine digital advertising with TV advertising and advertising in periodicals and newspapers more than other categories of the advertisers (+10 p.p.).

• Use such digital tools as video advertising (+23 p.p.), mobile video (+22 p.p.) and special projects (+21 p.p.), advertising in games (+15 p.p.) more often than usual and use e-mail marketing (-27 p.p.), performance marketing (-20 p.p.) more seldom than usual.

• Allocate to banner advertising, video advertising, mobile video, advertising

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in games and sponsorship 73% of their advertising digital budgets – in comparison to 37% for all the respondents (and 16% of the respondents who are not manufacturers).

• Expect to have a further increase in the share of video advertising in their digital budgets more often than others (+12 p.p. in comparison to the average values calculated for all the respondents) and usually do not expect to have an increase in the share of performance marketing and e-mail marketing.

• Rarely use and often do not even plan to use location-based advertising (LBA) and systems for automated generation and customization of advertising messages; the share of the advertisers who use retargeting is below average among the manufacturers.

• Consider native advertising, digital video in social networks and cross-media planning the most efficient technologies more often than other advertisers.

• Evaluate mobile advertising as “unconditional priority” or “one of the major areas” of interactive advertising more seldom than usual and respond “mobile advertising is just an element in our digital strategy” more often than usual.

• Evaluate interactive advertising efficiency relying on such parameters as brand awareness and involvement of the audience into communication in social networks more often than usual – and evaluate it using a number of calls, orders and changes in overall financial indicators more seldom.

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10.2. GOODS RETAILERSThe retailers (both the offline and online companies) account for 16% of all

the interviewed companies.• The retailers are the most modest category as to the estimations calculated

for the growth in advertising costs. In comparison to other categories of the advertisers, the average growth in advertising costs in 2018 is lower by 7-12 p.p. and the projected growth in 2019 is also lower by 5-9 p.p.

• These advertisers consider interactive advertising efficiency, ample targeting and retargeting opportunities the main growth facilitators for the digital share.

• The retailers mention such barriers obstructing a facilitated increase in the digital share in the advertising budgets as a high price of interactive advertising, insufficient audience coverage by the Internet (it is safe to assume that it implies buyers in small towns) and its impossibility of sorting out certain marketing tasks.

• On average, the retailers use less advertising tools. They use targeted posts in social networks more often than other categories of the advertisers.

• The retailers use video and banner advertising less than other advertisers. But about one quarter of the retailers expect that the share of these tools in their budgets will grow.

• Among the retailers, the proportion of those for whom the role of mobile advertising is limited to the minimal is the highest.

• The retailers consider the usage of offline data for planning online campaigns and cross-media planning the most efficient technologies more often than other advertisers.

• The retailers use own analytical systems and analyze web traffic rates and a number of online orders by the evaluations of advertising efficiency more often.

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10.3. SERVICE PROVIDERS • The service providers account for 33% of all the respondents. This category

comprises banks and insurance companies, content providers etc.• The service providers have the most rigorous growth in the interactive

advertising budgets. Their budget increased in 2018, and they are projecting to have an increase in 2019 – on average, 3-4 times more than other advertisers.

• Their digital share within the advertising budget is the greatest. On average, the advertisers in this category spend on interactive advertising almost half (47%) of their overall advertising budgets.

• They consider interactive advertising efficiency, an increased number of people using the Internet via mobile devices and good opportunities of changing interactive advertising efficiency the main growth facilitators.

• The barriers obstructing an increase for the service providers are a shortage of much-in-demand advertising tools and an extremely high price of interactive advertising.

• The service providers use search advertising, mobile advertising, advertising on a pay-for-performance basis (CPA/lead generation) and e-mail marketing (Emails) more often than others. They use such formats as sponsorship and rich media less than other advertisers.

• They evaluate interactive advertising efficiency relying on such parameters as changes in overall financial indicators, a number of mobile application installations and a number of calls more often. They also use paid analytical systems and own analytical developments more often.

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10.4. OPINIONS OF THE CATEGORIES OF THE ADVERTISERSThe survey has divided all the respondents into three separate groups –

“FMCG companies”, “Manufacturers from the automobile industry”, “Pharma-ceutical companies”.• The most rigorous budget growth in 2018 and the plans to increase the budgets

in 2019 respectively are intrinsic to FMCG companies. The growth they are projecting to have in 2019 is 2-2,5 higher than other categories of the advertisers are projecting to have. In addition to it, FMCG companies show the highest growth rate is 1,5 higher than other categories of the advertisers have.

• The manufacturers from the automobile industry use more advertising tools than other companies – 13 channels on average.

• FMCG companies consider interactive advertising efficiency, a facilitated growth in the rates of the usage of the mobile Internet and time spent by the audience online the main growth facilitators. The manufacturers from the automobile industry also value the possibility of measuring the effect made by the investments into digital advertising in an accurate way.

• The manufacturers use digital video and special projects more often than others. The manufacturers from the automobile industry use search advertising, mobile advertising and advertising on a pay-for-performance basis (CPA/lead) more often than others.

• FMCG companies are planning to increase their expenditure on digital video and mobile video more than others. The respondents from these companies mentioned more often than others the importance of creative and a larger share of expenditure on creative allocated from their marketing budgets.

• 38% of the manufacturers from the automobile industry grant unconditional priority to mobile advertising in their digital strategy. It is two times higher than the same indicator for the pharmaceutical companies, and 1,5 higher that the same indicator for the companies related to FMCG.

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ABOUT THE IAB RUSSIA

The Interactive Advertising Bureau (IAB) Russia

Non-profit partnership promoting interactive advertising is part of the international network of IAB associations which aims at expanding and developing the online advertising market. IAB branches successfully operate in 43 countries on 4 continents.

The Interactive Advertising Bureau (IAB) Russia’s priority focus is on:

• Educational activities;

• Formation of industry standards, guidelines and glossary;

• Holding industry events, including the MIXX Conference and MIXX Awards;

• Research in Internet advertising based on international methodologies and practices in this area.

Contacts:127018, Polkovaya street, 3, bldg. 3, floor 4 Moscow city, Russiaphone / fax: +7 (495) 662 39 88email: [email protected]

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ABOUT DATA INSIGHT

Founded in 2010, analytical agency Data Insight specializes in Internet re-search and research of the Internet.

Key areas of the company:

• Internet advertising, Internet advertising services, interactive advertising technologies, Internet audience behavior

• E-Commerce, including tangible goods, travel and educational services, consumer behavior on the Internet and the mobile Internet

• E-Commerce services, e-Commerce infrastructure and ecosystem

• Startups and investments in Internet startups, investment funds

Our key competency isthe analysis of heterogeneous information, search for data sources and comparing various, sometimes incompatible data. All data that we release on the market is verified using different methodologies in order to pro-duce consistent results.

Services we provide:

• Research for Internet companies, investment companies, services on request

• Provision of ready-made reports on various segments of the Internet. The list of existing reports you can check with us on the website or by phone

• Monitoring of e-Commerce news, Internet advertising, technology startups

• Presentation research/ content products for information support of the company and launch of new products

Contacts:+7 (495) [email protected]

mailto:a%40datainsight.ru?subject=

http://www.datainsight.ru

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IAB RUSSIA DIGITAL ADVERTISERS BAROMETER — 2019 · 6. diversity of digital advertising 34 7....

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