Mobile Advertising and mCommerce in Russia

The number of mobile Internet users in Russia has achieved a breakthrough in the past years. Whereas total Russian Internet audience reached 87 million people in 2016, nearly 66 million Russians use mobile devices to surf the net at least once a month. About a third of them, i.e. 20 million people count to so called mobile-only users – they don’t use PCs for Internet access preferring mobile devices instead, as stated in the recent survey of Mediascope.

RUSSIAN INTERNET AUDIENCE

Picture_1_Russian_Internet_audience

Source: Mediascope

Smartphones are Russian’s favourite gadgets. They have outrun tablets and neared desktop computers as the most frequently used devices for Internet access. In the period between October 2016 and March 2017, about 46% of Russians browsed the Internet from their smartphones –  more than twice as many as from tablets that own 19%.  Experts point out that the preference for smartphones for surfing the net could be explained by low costs of mobile connectivity in Russia, numerous possibilities for free WiFi access in public places and by relatively low costs of high quality mobile devices.

Graph_1_Russian_Internet_users_by_device

 Source: Mediascope

mCommerce in Russia

Russians tend to use their mobile devices to make purchases over the Internet: about 14% of all online purchases were made from mobile devices in 2016. As stated by the the Russian Association of Internet Trade Companies (AITC), the following goods were among the most frequently bought by Russians:

  • Children’s goods (30%);
  • Beauty and health (24%);
  • Electronic devices and household appliances (16%).

Less frequently purchased goods on mobile devices were:

  • Furniture and household goods (9%);
  • Garden utensils (8%);
  • Food (5%)

These numbers show typical behavioral patterns of Russians on the Internet pointing to the link between their preferences for certain types of goods to the type of the device they use for online purchases. If Russians are already used to buying the goods of the first group online, they continue buying them, no matter whether they use PCs, smartphones or tablets. The situation is different with the second group. Buying food or expensive furniture requires more time and attention. These are purchases which are better made on a PC with a large desktop allowing to watch and compare pictures in higher quality and of bigger size.

Graph_2_most_frequently_purchased_goods_on_mobile_devices_in_Russia

Source: AITC

Mobile Advertising and Big Data

The growth of mobile Internet and the flourishing of m-commerce in Russia caused the growth of mobile advertising as well. The market of mobile advertising in Russia is estimated to increase by 30% every year.

The strategies of mobile advertisers are designed by mobile users’ behaviour. Big Data are the key words in mobile advertising in Russia as well as worldwide. The possibilities to gain and process huge amounts of data lead to a significant transformation of advertising techniques. Advertising is getting particularly targeted at the audience which is potentially interested in an offered ad. This narrows down the target audience and helps to make mobile advertising more effective. As Russian giant Mail.ru reports, narrow targeting has become a prevailing trend in the Russian mobile advertising. It enables to display advertisements to a certain small group of people or even to a singular person.

There are numerous formats of mobile advertising available in Russia. In this blog post we are going to describe the most efficient ones:

  • Mobile Contextual Advertising

Mobile contextual advertising are context-based ads adapted for screens of mobile devices. This format is one of the most popular in mobile industry in Russia. The context of search on mobile Internet, i.e. search conditions, semantic features, keywords etc. defines the selection of ads shown on the device. As stated above, Russians like using their smartphones to search for and buy certain types of goods on the Internet. While looking for products and services which meet their needs, Russians use their smartphones to get quick information about possible solutions, read descriptions and compare prices.

The reaction of Russia’s leading search engine Yandex to such behaviour was creation of a new feature allowing mobile device targeting. There are two types of targeting available on Yandex.Direct, the search engine’s service for mobile contextual advertising: advertising on mobile websites and in-app ads.

As well as on desktops, contextual ads on mobile devices are displayed on Yandex’s search page as results of a user’s search query on Yandex: 

Picture_2_Yandex_Contextual_ad_mobile Source: Yandex

The difference is only in the number of ads which is slightly larger on desktops than on mobile devices. Besides adverts can also be displayed on Yandex ad networks and ad exchanges.

  • In-app advertising for iOS and Android

Yandex also offers three formats of in-app advertising for iOS and Android operating systems:

Banner – a special ad slot integrated into the app’s content or displayed above it.

Interstitial – a mobile RTB slot with Yandex contextual, display or video ads placed on top of the app’s content:

Native ad – a slot with Yandex.Direct ads perceived by users as the app’s original content.

If you are interested in Yandex’s app advertising and wish to learn more on the topic, you can have a look at our blog post Mobile App Advertising on Yandex.

  • Social Media Advertising

Russia’s biggest social media ok.ru and vK.com offer advertising in their mobile versions as well. Ad formats are the same as on Instagram or Facebook: video ads, carousel, banner etc. Furthermore, both vK.com and ok.ru have recently launched a new advertising format for all mobile platforms – promotion of posts. Such adverts are displayed directly in a user’s newsfeed which is expected to reach greater ad awareness and attract more potential customers:  

Picture_3_Ok.ru_promotion_of_posts_mobile

You can find more information on the new format of advertisements on vk.com in our previous blog post on the topic.

ONMARUS is a specialist in digital marketing with over eight years of experience in mobile advertising on the Russian market. So if you are interested in mobile advertising in Russia, feel free to contact us! We will help to bring your business to the next level.

 

 

Cross-Border Internet Trade in Russia

E-commerce in Russia is booming! As reported by the Russian Association of Internet Trade Companies (AITC), Russian e-commerce turnover amounted to about 14.5 bn euro in 2016, which is a growth of about 21 per cent in comparison to the previous year.

 

Cross-Border Trade

A third of the mentioned volume of internet trade belongs to cross-border trade. Russians spent about 497.4 mln euro on products from abroad. This is an increase of 37 per cent in comparison to 2015. Among the favourite products purchased by the Russians were electronic devices, household appliances, shoes and clothes. A total of 233 mln international parcels containing ordered goods were delivered to Russian customers in 2016, and this number is expected to rise to 400 mln in 2017.

All goods in cross-border parcels are considered in Russia as goods for personal use. Therefore, they are not subject to VAT or any other fees if their total cost does not exceed 1000 euro or their total weight is under 31 kg per person per year.

Russian Post remains the largest carrier of the goods purchased online. Furthermore, it has recently begun cooperation with international carriers such as German DHL Group and the US Fedex with the aim of facilitating the cross-border trade.  

As can be seen from the chart, ninety per cent of all goods were purchased by Russians in China. Europe and the USA performed weaker in quantity (4 and 2 per cent accordingly):

  graph_1_sourcing markets-e-commerce_Russia

However, the share of Europe and the USA in monetary terms was much bigger – 23 per cent for the EU and 12 per cent for the USA – due to a relatively low average bill of Chinese goods:

 graph_2_online_trade_Russia

According to forecasts, Russian online trade turnover is supposed to reach about 17.5 bn euro in 2017, of which about 6.3 bn euro could belong to cross-border trade.

Significant increase in budgets for digital advertising

Along with the growth of the internet trade, digital advertising flourished in Russia in 2016 as well.  As stated by the Interactive Advertising Bureau (IAB) Russia, average expenditures on digital advertising grew about 20 per cent faster than on offline advertising. Among the most frequently used instruments of digital advertising were search engine and banner advertising, targeted and mobile ads. Further growth of the Russian digital market is forecasted for 2017, with display, mobile and video advertising as the leading performance channels.