Advertisers dropped out of the contextual – Newspaper Kommersant No. 212 (7413) dated 11/16/2022

More than 80% of Russian advertisers are talking about a decrease in efficiency and an increase in the cost of attracting customers on the Internet, found out in TenChat and Roistat. The main reason was the departure of the usual foreign advertising platforms YouTube, Google Ads, Instagram, Facebook (owned by Meta, which is recognized as extremist in the Russian Federation and banned). Not all of them found and were able to master domestic analogues. In the third quarter, every fifth company reduced the cost of online advertising, the cost of which is growing at the same time. The platforms themselves highlight the market-based nature of pricing and promise to expand inventory.

“Kommersant” got acquainted with the study of the business social network TenChat and the marketing platform Roistat on the dynamics of companies’ spending on digital advertising in the third quarter. It was conducted by polling 4.9 thousand marketing specialists and more than 1 thousand entrepreneurs.

The analysis shows that every fifth company (21%) in July-September reduced the budget for online advertising. Of these, more than half (56%) reduced costs by 10–20%, a third (32%) by 20–50%, and another 12% by 50% or more. Among those who reduced the budget, the largest categories are catering and restaurant business (19%) and car sales (17%). At the same time, 61% of the advertising budget on the Internet has not changed (for example, in the financial sector, telecommunications and medicine). An increase in advertising budgets was reported by 18% of companies, most of all (21%) from retail.

At the same time, 84% of respondents reported that in 2022 it became more difficult to attract leads (a potential customer who is interested in a product). Almost half (48%) attribute this to the departure of the usual promotion channels from Russia, while alternatives do not give a comparable result. YouTube, Google Ads, Instagram, Facebook and TikTok left the Russian advertising market. About 27% of respondents say that the remaining channels are overheated and the cost of user acquisition has increased. The increase in the cost of a lead is felt more strongly than others in the field of real estate and beauty, follows from the study.

It is not yet possible to replace the volume of leads received with the help of local platforms, Irina Kozlova, Managing Director of the Performics Moscow agency (part of the Rodnaya Speech Group), confirms: “Great difficulties with promotion in mobile applications.” The largest reduction in inventory occurred in contextual and targeted advertising, said Vadim Melnikov, director of digital technologies at ADV. Often we are talking about the redistribution of only part of the budget, a significant share is simply removed, adds Irina Kozlova. Mark Khludnev, founder of the Digital Church agency, says that advertisers are redistributing budgets, including towards opinion leaders (bloggers).

The change in the cost of attraction strongly depends on the category and advertising channels, Irina Kozlova notes: “There is a business for which the purchase price has hardly increased, but the capacity itself has decreased. There is a business for which the growth was 30% or more.” Vadim Melnikov adds that the company does not see any increase in prices for a number of clients, while for others it was about 20%. Nikita Bashmakov, Managing Director of Digital Twiga, clarifies that “in general, the cost of attracting customers in various areas has increased by at least a third.” Mark Khludnev believes that we are talking about doubling.

Against this background, Russian advertising platforms speak of an increase in investment. VK Advertising Technologies Product Director Stanislav Bonbin said that in the third quarter, advertisers’ investments in promotion on VK platforms grew by 29%: “Real estate, home goods and e-commerce became the leaders in terms of pace.” In “Yandex” they assured that they were observing “a large influx of entrepreneurs of small and medium-sized businesses.”

The cost of promotion on VK platforms is formed automatically at the auction due to the balance of supply and demand, the company explains: “For advertisers, it is not the cost of purchasing advertising that is more important, but the cost of attracting a targeted action — a transition to a website, an application installation, an application or a sale.” According to the results of the third quarter, according to Stanislav Bonbin, in VK Reklama, the cost of a target action is reduced by an average of 30% due to algorithms. He promises to expand the platform’s tools in the near future.

Yandex also says that the cost of clicks, impressions and conversions is determined as a result of bidding between advertisers: “Now we are not seeing a significant increase in rates, but seasonal competition may increase in a number of categories.” The company claims that they reduce the cost of conversion for advertisers by expanding the available formats and developing algorithms.

Valeria Lebedeva