2019/6th WAVE OF IAB RUSSIA DIGITAL ADVERTISERS BAROMETER
The IAB Russia Digital Advertisers Barometer study traditionally presents the view of advertisers on the following aspects of interactive advertising market: the share of digital in ad budgets, its dynamics and drivers of growth as well as popular tools and formats.
The interactive advertising market continues to grow. The share of digital accounts for 38% of advertising budgets, and over half of respondents are convinced that it will increase. 55% of advertisers that took part in the survey reported an increase in their interactive ad budgets in 2018 and 53% forecast that this share will grow in 2019. Furthermore, online companies spend 39% more on interactive advertising than offline companies, 72% and 33% of their budget respectively.
Retail is a powerful platform for an increase in the volume of online advertising. Retailers forecast that their digital budgets will grow by 73% in 2019. The players in the automotive industry expect growth by 67%, while pharmaceutical companies project an increase by 61%. As was the case last year, FMCG companies significantly cut their interactive ad expenses.
Although there is a continuous upward trend in the advertising market due to interactive ads, the dynamics of spending on the latter has slowed down. From 2016 to 2018, 20% of companies increased their budgets for digital promotion, and 15% of companies plan to raise spending on interactive advertising in 2019.
The respondents believe that the share of interactive advertising mostly grows because users spend more time online, the return on investment in digital ads is accurately measurable, there is a wide choice of target audiences and interactive advertising produces results. In addition, advertisers link the steady development of interactive ad to the growth of the mobile Internet audience.
The limiting factors of interactive ad that advertisers mentioned include its high cost and the lack of qualified professionals in the industry.
This year, within the framework of the IAB Russia Digital Advertisers Barometer 2019 study, interactive ad departments of advertisers were analyzed for the first time. On average, about 4 people at a company are engaged in interactive advertising. The number is slightly higher for online companies and services and amounts to 5 people, while the minimum is a feature of pharmaceutical companies that keep it to 2 people.
Share in Media Mix
Advertisers use 3 advertising channels to raise effectiveness and attain promotional goals. In addition to the interactive ad, popular channels are TV and outdoor advertising. Besides, the mix of channels varies and depends on the category of advertisers. Namely, FMCG companies prefer TV advertising, while one of the main channels for retailers, in addition to digital, is out-of-home (OOH) ads.
Over the last three years, targeted advertising on social media has been the most popular tool of the interactive ad, with 85% of respondents using it. And, half of the participants to the survey forecast an increase in targeted ad expenses in 2019.
Still, most advertisers lean towards search and banner advertising. 74% and 68% of respondents, respectively, have used these formats. Online companies have also actively used lead generation, CPA purchases and email marketing.
63% of respondents called retargeting the most popular technological solution, 61% noted the popularity of digital video on social media, and 55% of respondents supported native advertising. As in the previous year, the greatest growth potential is ascribed to digital video formats on a pay-per-performance basis, automatic generation of ad messages and cross-media planning of ad campaigns.
Thus, the study reveals the upward trend towards performance advertising that is aimed at increased conversion in sales. Moreover, according to the advertisers, the most effective format is video content with interactive elements, which allows to give a user an idea about the product over a short period of time and encourage them to buy it. Furthermore, the study results demonstrate a clear trend toward omnichannel advertising campaigns with the use of audience offline data.
Mobile advertising has become a standard tool. Advertisers started to view mobile as one of the important channels for promotion. Most respondents (45%) have indicated that mobile advertising is one of the necessary elements of digital strategy. And, 17% of companies consider it an important part and even a priority for them.
Metrics and Analytics
For 75% of advertisers, the increase in website traffic is one of the main performance indicators for interactive advertising. 65% of companies pay attention to the ad campaigns reach. 59% of respondents use engagement of audience in communication with a brand to evaluate digital ad effectiveness, while 57% focus on an increase in search queries related to a brand.
Boris Omelnitsky, President of IAB Russia, Director for Strategic Market Development for the Commercial Department of Yandex:
"Over six years of the IAB Russia Digital Advertisers Barometer study, from 2014 to 2019, the share of the interactive ad in Russia grew from a quarter to almost half of the market volume, and the annual growth has continued at double-digit rates. The digital channel has become the main investment flow for business, and as the market share of the Internet industry increased, so did its responsibility to the business community. This study is another step towards enhanced transparency and certainty for advertisers and at the same time is an invitation to further cooperation. The IAB Russia Association is a platform for business interested in interaction with creators of interactive ad tools."
Alexey Belyaev, Vice-President of IAB Russia, Head of Analytics for the Commercial Department of Mail.ru Group:
"For the past 6 years, IAB Russia has presented to the market the survey results of advertiser sentiment, and from year to year the report becomes more thorough, and the trends that the reader can follow become more clear and substantiated. I believe that the value of this study increases as over the years it accumulates knowledge about how different businesses evolve their approaches to the digital ad, and the report on this study becomes a strong case for
effectiveness and popularity of digital segment in the advertising industry".
Alexander Papkov, Vice-President of IAB Russia, Co-chair of the Industry Committee of IAB Russia on Big Data & Programmatic, Co-chair of IAB Russia on DOOH, Technical Director of Media Direction Programmatic (MEDIA DIRECTION GROUP):
"The annual Digital Advertisers Barometer survey, which has become a tradition, allows us to look at the changes in the market from the position of advertisers as well as to identify trends and new challenges. As the study has shown, in the near future we should expect a further
increase in programmatic, which accounts for over 80% of the budgets in the US and the UK.
Additionally, this year has demonstrated that digital is moving beyond the Internet and is actively integrating into classical media. At the moment, DOOH is a clear example, but looking in 2020 we can expect it in the field of TV and Radio. Another confirmation of this is the big interest of advertisers in such formats as Video and Audio, which the study reflects. Therefore, speaking about the interactive advertising, we have to understand that it is about all media."
Vitaly Zhigarev, Head of Marketing at SharpLase:
"The Digital Advertisers Barometer survey is completely relevant to the situation in the advertising market. The results of the study have shown us that targeted advertising was and remains the most popular promotional tool. It allows to precisely aim at the sought-for target audience, provides for a large reach to different audiences for both B2C and B2B, enables to get the sought-for audience from VK, FB with a pixel, and then configure audience campaigns, both directly and through retargeting, in contextual advertising. Targeting can help to both promote a product and increase brand visibility and loyalty. In general, it has already become clear that Digital grows progressively and, according to expert assessment, by 2025, it will capture all business industries and areas."