Buyers are now on the road – Newspaper Kommersant No. 51 (7496) dated 03/27/2023

Due to a decrease in demand and the inability to promote goods on popular Western platforms, the cost of an attracted customer for Russian online retailers in different categories has increased from one and a half to five times over the year. Market participants attribute the situation to rising prices on the Russian sites VK, Yandex, Rutube, and have already begun redistributing budgets for outdoor and TV advertising, which is not rising in price so quickly.

Over the past twelve months (from February 2022 to February 2023), the cost of one attracted online client in the advertising networks of Russian Internet sites (Yandex, VK, Rutube) has tripled year-on-year in the electronics category, doubled in the clothing segment, in one and a half times – in grocery retail and five times – in real estate and cars, Andrei Krisyuk, general director of the iProspect advertising agency (part of the Okkam group), told Kommersant. According to him, due to rising prices, retailers are forced to reconsider investments in online advertising: “This leads to an increase in the cost of the auction, and in the same Yandex.Direct we see a price increase of 25-100% – and more, depending on commodity categories.

In some industries, the cost of attracting a client has doubled on average, Elena Melnikova, director of advertising technologies at MTS, confirms: “This is a natural process – when large advertising platforms left, the budgets “flowed” to the players who remained in the country.”

According to Maxim Ermolaev, Managing Director of Media Instinct, the cost of advertising on Russian sites has increased by 30-100% over the year, depending on the category. However, he explains the situation not by an increase in the cost of traffic, but by “a deterioration in performance at other stages of the sales funnel, a decrease in overall purchasing power, an increase in the cost of a product or a decrease in its quality.” According to Irina Ivanova, director of B2C marketing at F+ tech-Marvel, prices in VK have not changed, but in Yandex they have increased by 50-75%.

According to the editor Roem.ru Yuri Sinodov, advertising auctions are held both on the sites of Yandex, VK, etc., and through other market participants: “Price growth may be associated with an increase in the minimum threshold for entering the auction.” Also, advertising platforms could increase the distribution of bonus traffic for agencies and new clients, which is why the old advertisers had to invest more of their own funds to win the auction, the expert clarifies.

VK noted that “the cost of promotion in the holding’s advertising platforms is formed on the basis of an automatic auction and depends on the balance of supply and demand.” Yandex said that by the end of 2022, the effectiveness of the advertising system had grown by 42%. Rutube reports a 20% increase in advertising volume. The company did not respond to a question about price changes.

Due to the increased cost of advertising, stores will raise the price of products by 5-10%, however, due to competition, they will try to offer promotions, says a top manager of a large Russian retailer: “Due to great competition, many plan to rely on offline sales.”

Mikhail Burmistrov, General Director of Infoline Analytics, agrees that “due to overpricing”, the sites of VK, Yandex, Rutube are becoming less attractive for the largest online retailers and marketplaces: “Already now, offline advertising, where prices have hardly changed, has become a powerful tool for the online retailer and express delivery services. Suffice it to recall the Samokat service, which effectively won customers through outdoor advertising and leaflets.” Ozon confirmed that the company is “aimed at attracting new audiences from offline”, for which it began to redistribute the budget for outdoor and TV advertising.

Timofey Kornev