Yandex & Google: A Big Change for Russia's Display Ad Market

One of the fastest growing trends currently in digital marketing is real-time bidding. Today, we are finding it much more effective than classic display media buying due to the fact that the conversion rate can reach more than 10 percent and the specific targeting capabilities are similar to what we find with paid search.

Every year the average growth of the real-time bidding market is hitting between 50 and 80 percent, according to eMarketer:

RTB Digital Ad Spending

The Interactive Advertising Bureau created an open RTB protocol, which is what the RTB functionality is based on. The process takes about 100 milliseconds and is held in a live modus. The system holds a specific ad space while the user is loading a website and the winning bidder pays the second highest bid.

The players of the Russian RTB market include:

  • Demand-side platforms: Bidding technology for advertisers. The most important DSPs in Russia are DoubleClick and Soloway.
  • Sell-side platforms: Have their own interface, allowing management of advertising inventory for publishers.
  • Agency trading desks: Manages programmatic, bid-based media and audience buying. This platform aids in purchasing audiences at scale across digital media for advertisers.
  • Ad exchanges: Within the RTB ecosystem, this is the connector between advertisers and publishers. These allow the participating parties to buy and sell the remnant traffic.
  • Ad networks: The most stable element of Russia's advertising market. These allow publishers to sell the rest of the traffic within the RTB or the whole advertising inventory, and also match ad space from website owners with advertiser's needs.
  • Data management platform: These have a direct relationship with data suppliers, which allows advertisers to target according to their needs and segment user's data.

Russia made its way into the Top 15 list for most growing RTB markets in 2012 after the technology was introduced only one year earlier in 2011. Aegis Media's Director of Digital Communications, Andrey Chernishov, predicts that the whole RTB media spend in Russia will amount to about 15 percent until 2015.

Before 2012, local advertisers had to rely on Western colleagues for their RTB needs, but after some digital magnates realized the high demand of the technology the local Russian RTB ecosystem was created. Now companies such as Yandex, AdFox, Criteo, Google, and Facebook have integrated into the Russian market.

In 2012 Yandex created its own real-time bidding system for auctioning ad impressions to advertising systems. LaModa, and Tinkoff Digital later joined Yandex. Direct and myThings in the auction.

Powered by real-time bidding technology companies develop their own Demand-Side Platforms to mediate ad marketing and sharing participants.

Yandex Real-time Bidding Joins with Google DoubleClick

Yandex has now officially partnered with Google to change and enhance the display ad market in Russia. This partnership will help open the competition in digital marketing and will facilitate global networking.

DoubleClick, a Google subsidiary, will now offer their clients the ability to access the advertising inventories supplied by Yandex's advertising network. This mutually beneficial relationship will create access to clients of Yandex to bid for ad displays in DoubleClick Ad Exchange partners' inventories. Because both systems are powered by real-time-bidding technology, publishers and advertisers will be able to maximize their advertising revenues and cut costs through the algorithm-based bidding.

Although this partnership doesn't cover text-based contextual advertising and is only relative to display advertising, the refined ad match, better-optimized bids, and fine-tuned ad targeting means great results.

The combination of technologies will allow for the market participants to receive the best quality and results for their money. Access to each company's inventories will give more chance for the auction participants to achieve their goals.

Over the last few years there have been many drastic changes to the global advertising market. Currently, what is trending is the heightened popularity of data management capabilities on the demand side, best-value selling opportunities on the supply side, and online automated media buying services.

It wasn't until 2011-2012 that trading desks and retargeting technology were introduced to the Russian market. This proves the youth of the RTB market in Russia.

The RTB market will continue to thrive and progress. Oleg Nazarov-Bruni of HubRus DSP believes that the market will grow as fast as the American market grew and that the spend for Real-Time-Bidding will be about 30 percent of media budgets. Look out world, here comes Russian RTB.

About the author

Michael Bonfils is the International Managing Director of SEM International, a division of International Media Management Corp.

Since 1996, Michael was one of the early pioneers in the search engine industry, working in-house for a multinational firm prior to being in charge of Search Engine Strategy at Business.com in 2000-01.

In 2001, his International passion led him to opening up his own firm and an office in Asia after recognizing the need for U.S.-based online marketing agencies requiring an outsourced solution to provide services to their clients outside of the United States.

As the demand for his company's services expanded into other countries, he spread out further into Asia, Europe and eventually Latin America. Today, SEM International is a global network of in-country search engine marketing agencies providing a one stop, centralized solution for Intl search engine marketing management.