Russian RTB market in 2013

March 2014

Russian RTB market in 2013, ©ADFOX, 2014 2

Table of Contents

Table of Contents .......................................................................................................................................... 2

Introduction .................................................................................................................................................. 3

Global market ................................................................................................................................................ 4

Events ........................................................................................................................................................ 4

Consolidations ........................................................................................................................................... 5

Mobile RTB ................................................................................................................................................ 6

Video RTB at a low start ............................................................................................................................ 6

Programmatic direct ................................................................................................................................. 7

Russia: Numbers, Facts, Forecasts .............................................................................................................. 10

What was happening (and did not happen)............................................................................................ 11

Sellers ...................................................................................................................................................... 12

Buyers ...................................................................................................................................................... 14

Agencies .................................................................................................................................................. 15

Data ......................................................................................................................................................... 16

Forecasts ................................................................................................................................................. 17

Major events on the Russian RTB market in 2013 ...................................................................................... 19

Schedule. Russian RTB market ecosystem .................................................................................................. 21

Schedule. Market participants .................................................................................................................... 22

Introduction

The third regular “Russian RTB market Overview” sums up the development of the programmatic

segment of online advertising in Russia in 2013. Last year, experts predicted that by the end of 2013 the

Russian RTB market would account for about 2-5% of the entire display advertising segment. According

to the Russian Association of Communication Agencies (RACA), display advertising market has added

12% compared to the figures of 2012 and reached 20.1 billion rubles. The total volume of the Internet

advertising market in 2013 is 71.7 billion rubles. This segment has traditionally shown the fastest growth

in comparison with others – 27%1.

In the first half of 2013, the Russian RTB market was estimated at 0.4 billion rubles ($12-13 million). In

the second half of the year RTB sales twice exceeded the indicators of the first six months. By the end of

2013, the Russian RTB market has reached 1.2 billion rubles ($37.7 million2), or 6% of the display

advertising market.

According to forecasts, in 2014 the share of RTB in the total volume of the display advertising can reach

10%. This fast growth is based also regarding the agreement between market giants Yandex and Google,

Western players appearing on the Russian market, and technological developments. Experts expect

introduction of the programmatic premium concept for exclusive data-using advertising sales, the

involvement of large platforms in auctions, and integration of Russian site’s inventory with Western

DSPs.

In preparing this review, we drew upon our own experience of using the ADFOX SSP product, foreign

studies and reviews, materials from the media, and the comments and opinions of players in the Russian

market. We would like to thank Internet advertising experts including Dmitry Belozub (Tinkoff Digital),

Oleg Nazarov-Bruni (Hubrus DSP), Mikhail Getmanov (Between Digital), Ilya Lagutin (Aidata.me),

Alexander Levshin, Evgueny Lyogky (Rutarget), Roman Nester (Segmento), Alexey Rayevsky (Lamoda)

and Artyom Rodichev (IPONWEB) who contributed greatly to this review.

1 http://www.akarussia.ru/knowledge/market_size/id4044

2 http://www.cbr.ru/statistics/print.aspx?file=credit_statistics/ex_rate_ind_13.htm

Russian RTB market in 2013, ©ADFOX, 2014 4

Global market

Internet advertising continues to be the fastest-growing segment of the global advertising market.

According to Nielsen, global advertising across the web, including mobile Internet and apps, grew by

32.4% in 2013. The global potential of Internet advertising remains huge – this segment still accounts for

only a 4.5% share of overall spending on ads.3

IAB research on ad segments in different countries in the first half of 2013 shows that display advertising

is increasing much faster than search ads. In the UK, compared to the first half of 2012, the display

advertising market expanded by 23% to reach £1.81 billion.4 In the U.S. search advertising grew by 7%

while display advertising was up by 9%.5 Programmatic buying and ad sales through RTB auctions were

among the primary drivers of this process.

RTB is now perceived as the main driver of development in the global digital advertising market. This is

not surprising as, according to IDC, RTB-generated revenues will grow by 51% annually to reach $20.8

billion by 2017.6 In 2013 alone, it rose 60% compared to 2012 and reached $4.5 billion. The U.S. takes a

large share of the global RTB market, but in the long term it is expected to decline from 74% in 2012 to

69% in 2017. eMarketer estimates that RTB spending reached $3.37 billion in 2013, which is only 19% of

the total display advertising market in U.S. By 2017, this figure will rise to 29%.7

RTB markets in Western European countries are not yet so impressive, but they continue to

demonstrate high growth rates.

Country

RTB market, $ million

2012 2013 2014

USA 1,920 3,370 4,660

United Kingdom 157.9 283.6 409.1

Germany 86.5 157.2 220.2

France 57 113.5 150.5

© eMarketer

According to IDC, the RTB market in Japan stood at $382 million (10% of the display advertising market)

in 2013, China – $60 million, Australia – $74 million.

3 http://techcrunch.com/2014/01/27/nielsen-internet-advertising-grew-32-in-2013-but-its-still-only-4-5-of-spend-

vs-tv-at-57-6/ 4 http://www.iabuk.net/about/press/archive/uk-digital-adspend-hits-record-6-month-high-of-3bn

5 http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-100913

6 http://www.pubmatic.com/reports-and-whitepapers.php

7 http://www.emarketer.com/Article/Advertisers-Continue-Rapid-Adoption-of-Programmatic-Buying/1010414

Russian RTB market in 2013, ©ADFOX, 2014 5

Events

In December 2012, Amazon launched an RTB ad exchange to sell advertising space on its own web-sites.

In May 2013, eBay followed with a similar product. In 2013 Avito, the largest Russian advertising

platform, offered advertisers a proprietary RTB product that makes it possible to place ads on the portal

using user data.

In March 2013, Facebook included Facebook Exchange ads in the inventory of its RTB-service. These ads

are displayed in user time lines. It was tested for a couple of months by major market players including

AdRoll, AppNexus, Brandscreen, Criteo, DataXu, MediaMath, Nanigans, Kenshoo, Optimal, RocketFuel,

Tellapart, TheTradeDesk, Triggit, TURN, Xaxis, and X+1. They all are unanimous in saying that the

effectiveness of Facebook Exchange is considerably higher than that of standard advertising campaigns,

including retargeting through Google AdExchange. Today, in collaboration with AdRoll, Facebook is on

its way to mobile RTB8.

Last April, Foursquare partnered with TURN and now company allows the use of location data for

retargeting to other websites. Location data obtained from mobile devices is considered the most

accurate for targeting advertising. According to the head of one company working with user data, the

price usually ranges between $0.5 and $1.5 per thousand impressions, and when using data from

Foursquare the price reaches a peak.

In late 2013, a number of RTB companies announced that they would conduct IPOs. In September 2013,

Rocket Fuel has announced that company intends to place its shares on the stock exchange. On the first

day of NASDAQ trading, the stock rose 101%. Then Criteo, a company specializing in retargeting

advertising technologies, announced an IPO. Since posting in October, the share price has increased

more than twice. In early 2014, the SSP Rubicon Project filed an IPO application with the U.S. Securities

and Exchange Commission.

Consolidations The U.S. and European inventory owners tend to control their own purchases without compromising data security. Therefore, publishers prefer to create in-house solutions and organize networks. For example, AOL has its own network, Ad.com, which, among other things, sells traffic of The Huffington Post and TechCrunch. In 2013, Ad.com partnered with Facebook Exchange (FBX). On June 19, 2013, the five largest media companies in Denmark joined forces as the Danish Publisher Network to jointly sell advertising via the RTB-model in partnership with the Rubicon Project. Exposure has reached 60% of the country’s population. The alliance offers data about its users and an advertising inventory.

8 http://www.insidefacebook.com/2014/02/24/fbx-adroll-intros-a-new-way-to-retarget-across-devices/

Russian RTB market in 2013, ©ADFOX, 2014 6

In Australia, the online media Mi9, Yahoo!, Fairfax Media and News Limited have plans to create their own advertising networks as a counter to Google. The media sites are looking to sell targeted advertising themselves via the RTB-model in order to boost revenues. We are talking about $876 million in the online advertising media segment. Plans to launch a global ad exchange in 2013 were announced by international media group News Corp.9 Through a single broker, advertisers can buy traffic from more than 50 Internet and mobile platforms owned by the holding company. These include the online versions of the Wall Street Journal, the Times and the New York Post. The same Rubicon Project market solution was used instead of the company’s own developments.

Mobile RTB

The growth trend in mobile RTB that became evident in 2013 will become the most powerful driver of

the entire market in 2014. Inspired by the RTB success in the «big» Internet marketers increase the

demand for programmatic buying of mobile audience. On the U.S. market, mobile RTB still takes only 4%

of all revenues from the mobile display advertising. But, according to IDC, mobile RTB incomes will

increase by a multiple of four in 201410.

As every fast-growing market, mobile RTB is noteworthy for landmark mergers and acquisitions that

make it possible for traditional players to acquire the competence and technologies they need to

expand their inventory. Among such events in 2013, we note the MoPub acquisition by Twitter, the

launch of its own MMX RTB platform by Millennial Media in partnership with Appnexus, and the

Gradient X merger with Amobee.

Lack of access to personal data that may be used for deep targeting remains a constraint on mobile RTB

development. The problem is aggravated by the fact that, as opposed to personal computers, in mobile

devices it’s complicated to identify users by familiar to advertising technologies ways. Google's mobile

RTB, however, has an indisputable advantage – as the owner of Android, it has direct access to any

functionality including the identification and collection of personal data. Google may well use this

exclusive competitive advantage in future to strengthen its own position.

Video RTB at a low start

According to IAB research, online video advertising accounts for nearly 7% of ad spending across the

web.11 This segment of the advertising market increases by 20% annually. While in 2013 online video ad

spend was $3.6 billion, in 2014 it is expected to reach $4.6 billion, which is not surprising as video

consumption across the web grows proportionally — at 24% a year.

9 http://www.adweek.com/news/technology/news-corp-launches-global-private-ad-exchange-151970

10 http://www.pubmatic.com/reports-and-whitepapers.php

11 http://www.iab.net/media/file/IABInternetAdvertisingRevenueReportHY2013FINALdoc.pdf

Russian RTB market in 2013, ©ADFOX, 2014 7

According to Forrester's research "How Software Is Eating Video Ads And, Soon, TV", the programmatic

technology is confidently making its way to the online video ad market.12 Comparing the dynamic

growth of programmatic advertising and the continuous rise in online video consumption, experts

predict that the video ad market is on the brink of a revolution. Marketing experts will have to invent

cross-platform advertising campaigns instead of just placing TV video ads. In addition, development of

the programmatic direct concept will make it futile to procure huge video advertising space in an effort

to catch the user you need in front of the screen.

Programmatic direct

Marketing experts in the West have already tried and tested advertising space auctions via the RTB

model. Now they are testing another option of non-auction sales based on the programmatic services,

the programmatic direct. With programmatic direct, agencies and DSPs are able to use the RTB model

under a direct contract with publishers. This helps them to attract large-scale advertisers and premium

publishers that are not happy with standard RTB.

Programmatic direct is an ad sale model through the programmatic infrastructure at a fixed price

agreed between the buyer and the seller. This may include such programmatic advantages as the

use of different audience data and others.

When conducting transactions through programmatic direct, the advertiser, which has a direct

agreement with the SSP, is assigned the identifier of the deal – Deal ID. And if advertising tools, which

gets into this advertiser’s zone of interests, put up for auction, the system identifies it among other

customers, and gives it the victory without bidding. If the tools do not match its interests, an auction is

held among all other buyers.

Thus, a premium buyer can use all advantages of the programmatic buying, but to buy inventory for a

fixed price and without bidding. Today there are many other categories of programmatic buying in the

market, with a different type of inventory and participants of the transaction. IAB has prepared a table

describing different terms used in the sphere of programmatic sales.

12

http://www.forrester.com/How+Software+Is+Eating+Video+Ads+And+Soon+TV/fulltext/-/E-RES109201

Russian RTB market in 2013, ©ADFOX, 2014 8

© IAB13

Players of the Russian RTB market also call direct programmatic one of the main vectors of development

in 2014.

Alexander Levshin, independent expert: I think that 2014 will be marked by diffusion of

programmatic advertising products, that intuitively similar to traditional direct buying, but more

convenient, allowing to automate all processes of advertising campaign.

Mikhail Getmanov, Between Digital: 2013 showed a relatively low RTB efficiency in terms of large

platforms that are used to higher prices than those dominating in the RTB segment. This trend will

be corrected with the development of programmatic premium in Russia in 2014.

Boris Omelnitsky, ADFOX, IAB: The programmatic premium concept and direct sales through RTB

infrastructure (Deal ID) are supported by major market players and communication groups. They

invest in developing their own DSP-integrated Trading Desks and services to raise the efficiency of

advertising space sales, on the one hand, and to provide advertisers with closely focused

communications, on the other.

In Russia, programmatic direct is actively developed by, for example, GroupM with its Xaxis and

Quisma TDs, and Aegis with its Amnet platform. I am convinced that programmatic direct will lead

the direct procurement concept to a new technological level.

13

http://www.iab.net/media/file/IAB_Digital_Simplified_Programmatic_Sept_2013.pdf

Tipe of inventory Pricing ParticipationOther Terms Used in

MarketOther Considerations

Automated

GuaranteedReserved Fixed One-One

Programmatic guaranteed

Programmatic premium

Programmatic direct

Programmatic reserved

Unreserved

Fixed RateUnreserved Fixed One-One

Prefered deals

Private access

First right of refusal

Invitation-Only

AuctionUnreserved Auction One-Few

Private marketplace

Private auction

Closed auction

Private access

Open Auction Unreserved Auction One-All

Real-tima bidding (RTB)

Open exchange

Open marketplace

• Prioritization in the ad

server

• Deal ID

• Data usage

• Transparency to buyer

• Price floors

Russian RTB market in 2013, ©ADFOX, 2014 9

Along the growth of traditional RTB, programmatic premium will stimulate the development of

programmatic buying and displace traditional direct buying of advertising. Magna Global is optimistic,

expecting that 83% of the display advertising inventory in the U.S. will be sold with programmatic

technology by 2017, including 52% of RTB sales and 31% through the Non-RTB programmatic14.

© Magna Global

14

http://news.magnaglobal.com/magna-global/press-releases/magna-ipg-mediabrands-programmatic-advertising-forecast.htm

Russian RTB market in 2013, ©ADFOX, 2014 10

Russia: Numbers, Facts, Forecasts

According to Public Opinion Foundation (FOM) research published in autumn 2013, 46% of the entire

Russian population, or 53.2 million users, go online on a daily basis. Over the year, this figure rose by

9%.15 According to Internet World Stats, in terms of Internet penetration Russia is in line with Italy,

outperforming China and Brazil with their 40% of daily Internet users but is considerably behind the UK,

Japan and the U.S.A., which have nearly an 80% level of active Internet users.

According to RACA, the entire Internet advertising market stood at 71.7 billion rubles in 2013. Internet

advertising has traditionally demonstrated the most impressive growth compared to other segments of

the advertising market (up 27% compared to 2012). Display advertising rose 12% (20.1 billion rubles),

and contextual advertising grew by 34% (51.6 billion rubles)16.

In 2012, having just entered the market, RTB became the trend of the season. Everyone named Real-

time bidding a technology of the future and hurried to jump on train before it left the station. The

growing noise around RTB led to excessive expectations on the part of numerous players, both

advertisers and technology companies. While the market needed to comprehend the new bidding

reality, perform required integrations, develop new standards and collect data, advertisers were eager

to have an immediate effect. Despite an apparent disappointment, however, interest in RTB did not

subside.

Artyom Rodichev, IPONWEB: The Russian market demonstrated an enormous interest in

programmatic in 2013. I am convinced that the market shifted from pure discussions and humble

attempts to master RTB to explosive development. We launched a number of new projects with

Russian clients. We also realized that the Russian market is ready for standardization and

universal solutions, and we decided to develop BidSwitch, our product that facilitates collaboration

among RTB players, on the Russian market.

Experts expected that RTB would win about 2-5% of the Russian display advertising market by the end of

2013. In the first half of the year auction sales brought nearly 0.4 billion rubles ($12-13 million) in

revenues.17 In the second half of the year, RTB sales were double the results of the first six months. By

the end of 2013, the Russian RTB market was estimated at 1.2 billion rubles ($37.7 million18), or 6% of

the display advertising market.

It's worth noting that this figure includes nothing but the sales of advertising inventory through Real-

time bidding. It does not include sales via the programmatic premium model or any sales other than

through an open auction for third-party DSPs.

Evgueny Lyogky, RuTarget: Indirect data make me believe that the RTB advertising market

exceeded 5% in 2013: 7-8% of the display advertising market seems a more credible figure.

15

http://fom.ru/SMI-i-internet/11288 16

http://www.akarussia.ru/knowledge/market_size/id4044 17

http://adfox.ru/ru/news_detail/17/ 18

http://www.cbr.ru/statistics/print.aspx?file=credit_statistics/ex_rate_ind_13.htm

Russian RTB market in 2013, ©ADFOX, 2014 11

Nikita Pasynkov, ADFOX: In 2013 RTB the market in Russia has developed rapidly. New players

started their business and companies that started earlier have decided on their specializations.

More tools and opportunities for RTB-buying became available for advertisers. As a result, the

market has grown significantly, and in 2014 this growth will continue.

What was happening (and did not happen)

The noise around RTB subsided in 2013 as compared to 2012 while meaningful action gained

momentum. The market has of course lost some of the players that loudly announced themselves. They

were replaced with new technological companies and Western players.

Roman Nester, Segmento: Tinkoff Digital left the market just a year after the new business was

started. This was the most significant event of 2013. In this very short time TD, however, managed

to set the level of expectations that now every player has to deal with. I think we'll have to spend

all of 2014 explaining to advertisers that RTB is not a magic wand, but an advertising tool that

needs to be properly used.

Artyom Rodichev, IPONWEB: International players started showing interest in our market, and it's

very good. So far, they are mid-size companies. I expect that such giants as TURN and MediaMath

will come here too, which will be a strong impetus for development.

In 2012, Yandex announced the creation of its own RTB system. In 2013, partner companies (Yandex ad

network) were gradually joining the auctions. In late 2013, after Yandex acquired Kinopoisk, this popular

platform's traffic was also put on sale through the Yandex RTB system. In addition, Yandex used its own

Kritpa technology to automate audience research and classification.19

In early 2014, Yandex announced the start of collaboration with Google in the field of advertising. The

Yandex display advertising service AWAPS will be connected to Google's RTB system (DoubleClick

AdExchange), and Google's service DoubleClick Bid Manager will be connected to Yandex's RTB system.20

Roman Nester, Segmento: In 2013, Yandex joined the RTB system, and in February 2014 Yandex

and Google announced collaboration between the companies. This alliance opens up a new stage

in the development of the market, which actually will be free from any closed inventory. In the first

place, advertisers will win as they will be able to save considerably on purchasing advertising

space.

At the same time, contrary to expectations, other Russian Internet behemoths are not hurrying to enter

the programmatic buying market. Experts believe that Russian social networks will adopt the successful

experience of Facebook Exchange and take an active part in developing the market.

19

http://company.yandex.ru/technologies/crypta/ 20

http://company.yandex.ru/press_releases/2014/0226/index.xml

Russian RTB market in 2013, ©ADFOX, 2014 12

Alexey Rayevsky, Lamoda: We're eagerly waiting for Mail.ru and Vk.com to join the auction, but

they have not done so yet.

Sellers

More and more major Russian Internet projects enter the RTB market, offering their inventory through

various advertising exchanges or experiment with creating their own technologies. The online dating

service Wamba, RBC holding, the largest Russian ads portal Avito and many others began to exhibit their

traffic on the auction last year.

Avito, for example, offers all Russian advertisers to buy ad impressions on the portal using Google

DoubleClick AdExchange and Yandex RTB. Advertisers may sign a direct agreement on the purchase of a

certain volume of traffic using data through programmatic direct or participate in the open auction.

Among major clients of Avito currently dominated retargeting companies, but there are also some of

the major brands, including BMW Group, Svyaznoy, P&G.

Experts believe that in future their RTB traffic will be concentrated in the hands of several large SSP

systems. Portal owners will test the functionality of every such system and choose the one that

generates maximum revenues from the sale of residual traffic.

Oleg Nazarov-Bruni, Hubrus DSP: Over the past six months only our company connected some

new SSP: Wamba, PayHit, Adflow, RBC, Epam, Smaclick, C8, Republer, they had started to

popularize RTB purchases from publishers. Publishers already massively try to send their traffic

and experiment with it varying rates. The average of purchasing can reach 15% of the total

volume. The share of Yandex and Google really started to decline due to the emergence of new

local players. Also in a new year a major Western SSP (PubMatic, Rubicon, Сasale, AOL, spotX)

began to claim the Russian demand. They have a lot of unclaimed Russian inventory. I think that

by the end of 2014 it will be the consolidation of traffic: sites will leave small SSP and move to the

big ones – those that will bring more money.

On the Russian market SSP services now provide:

o ADFOX

o AdRiver

o Begun

o Between Digital

o DoubleClick

o OpenX

o PayHit

o RBC

o Republer

o Yandex

Russian RTB market in 2013, ©ADFOX, 2014 13

The traffic purchased via the RTB model demonstrated steady growth over the year. Moreover, the

growth has been developed not only by the increase in number of provided inventory, but also by

increasing the percentage of sell-out.

% of purchases in relation to the traffic put on sale (according to ADFOX SSP)

Boris Omelnitsky, ADFOX: Over 2013 we saw continuous growth in the percentage of traffic

purchased via the RTB model while the number of ad impressions put on sale grew slower. This

means that market growth is based, first of all, on the work of the auction mechanism and the

willingness by advertisers to buy a more expensive targeted audience.

240x400 remains the most demanded ad type, its share in the total volume of RTB-sales has risen up to

80%. The next most popular is the ad type is 728x90, other formats are almost ousted. The most popular

format 240x400 demonstrates the highest CPM.

Russian RTB market in 2013, ©ADFOX, 2014 14

The share of different formats of banners in the total volume of redemption through RTB (according to

ADFOX SSP)

Buyers

Russian DSPs that appeared in 2012-2013 continue active operations on the market, such as Hubrus,

Soloway, Begun, Rutarget, Aitarget, Targetix. Some players are expanding their activity and developing

new businesses. Kavanga, which used to buy traffic from third-party SSPs, launched its own Sell-Side

Platform, Republer, in 2013. Between Digital, a leading SSP on the Russian market, announced the

creation of its own DSP Intency.

Artyom Rodichev, IPONWEB: I think that an important feature of Russian players is their strong

technological commitment. Everyone is striving to set up its own bidder, SSP or data platform. In

absolute figures, our market is small but it has dozens of players already. It's still too early to say

in what way they will develop further. I would bet on consolidation in the next 1 to 2 years.

According to experts, in the future, companies will move from a tendency to expand its range of services

on the RTB market to specialization in its segment and cooperation with other players.

Ilya Lagutin, Aidata.me: I think that in 2014 we'll see fewer companies declaring that they deal

with the entire stack of technologies while there will be more partnerships and product

integrations. As early as the beginning of the year, we saw that market behemoths such as Google

and Yandex started integrating their RTB systems.

The DSP market in Russia is represented by several major local players, western platforms and a large

number of small buyers. Western players come to the market primarily through major media agencies.

Russian RTB market in 2013, ©ADFOX, 2014 15

DSP operating on the Russian market:

o AdSniper

o Aitarget

o Appnexus

o Begun

o Crimtan

o Criteo

o Doubleclick

o Getintent

o Hubrus

o Intency

o Kavanga

o Mail.ru

o MediaMath

o Mythings

o Rutarget

o Segmento

o Sociomantic

o Soloway

o Targetix

o TURN

o VI

o Yandex

Large advertisers are on the path towards creating their own technologies for purchasing traffic through

auction. The platform Data Mind was created from such in-house technology, which was originally

unveiled as an independent DSP, but a year later became a division of TCS Bank. Major online retailers

such as Lamoda are independently procuring goods. You may say that a new In-house DSP has emerged,

which continues to work and develop.

Alexey Rayevsky, Lamoda: We were expanding the share of the advertising space bought through

our own RTB system over the year. Now we continue testing new suppliers of RTB inventory.

Online retailers, including Lamoda, also develop their own technologies and accumulate

algorithmic knowledge of advertising campaigns.

Indeed, good knowledge of their audiences makes online stores sound players on the RTB market, which

suffers from the lack of data suppliers.

Agencies

Tenders for Internet advertising held by major advertisers in 2013 incorporated RTB-related conditions.

Retargeting as a programmatic buying product has become a common condition of tender documents

Russian RTB market in 2013, ©ADFOX, 2014 16

while requirements like "Tender Participant shall have an experience in placing Internet advertising

based on Real-Time Bidding (RTB) technology" are included in the requirements of such advertisers as

VTB and Rostelecom. While advertisers are prepared to invest a considerable part of their ad budgets in

programmatic buying, agencies have to invent new methods of business.

Evgueny Lyogky, RuTarget: We estimate that in the next couple of years, the majority of leading

agencies will set up their own Trading Desks to be able to manage advertising space for numerous

channels. The "request - media plan - reservation - confirmation - placement" scheme will become

too cumbersome. Users are mobile, they deal with growing information flows every day. To attract

their attention, agencies will have to make fast and very specific offers.

Trading Desk is a centralized platform to buy advertising space via various advertising models.

Trading Desk allows advertisers to automate advertising space purchasing as well as the management of

advertising campaigns. The platform integrates with several others and makes it possible to use the one

that is most suitable to ensure the effectiveness of a specific advertising campaign. Media agencies

often set up their own TDs focused on the requirements of their clients. Today in Russia there are only a

few Trading Desks, but several Western players entered the market with their TD: Xaxis and Quisma

from GroupM, Amnet from Aegis.

Agency Trading Desks in Russian market:

o Accuen

o Amnet

o Auditorius

o Quisma

o Vivaki AOD

o Xaxis

Data

In Russia, as throughout the world, data is collated by major Internet services and social networks, such

as Yandex, Google, Rambler, Mail.ru, VK and Facebook. Other players have extremely limited access to

this data, as user profile data is used by the companies themselves, which last year entered the RTB

market.

Online retailers also have their own data and can use it to target and segment their audiences. Nearly all

major e-commerce players have already entered the RTB market in this way or another.

Alexey Rayevsky, Lamoda: Russia still lacks a clear mechanism for obtaining third-party data,

which constrains the growth of RTB share in image (non-selling) ads. Most RTB sales come from

online retailers targeting on the basis of their own first-party data.

Russian RTB market in 2013, ©ADFOX, 2014 17

Other players use the services of existing suppliers to get third-party data. These suppliers can be

divided into two groups: companies that possess data and provide it for targeting advertising (Data

Suppliers) and companies that aggregate the data of suppliers to generate aggregate profiles based on

several sources (DMP).

Among the companies that provide data to the solution for advertising targeting:

Data Suppliers:

o AddThis

o Adex

o Liveinternet

o Pluso

o Proximic

o uLogix

o Visual DNA

DMP:

o Aidata.me

o Auditorius

o Lotame

o VI

Forecasts

In 2014, the Russian RTB market will develop along several lines:

o The programmatic direct technology will develop to provide for premium sales of advertising

inventory via the programmatic infrastructure.

o Brand safety technologies will develop to protect advertisers from the appearance of their

banners in unwanted websites.

o More and more large platforms will use auctions to sell their advertising inventory.

o The data market will develop, and new suppliers will emerge.

o Russian traffic will integrate with Western DSPs.

o The market will see more and more professionals able to deal with data and new technologies.

According to forecasts, in 2014 the RTB share may reach 10% of the entire Russian display advertising

market.

Oleg Nazarov-Bruni, Hubrus DSP: I hope that by the end of 2014 the market will grow at least

twofold. Major clients that started increasing the levels of expertise and analytics on their side will

change the situation. They start experimenting with DSPs directly, and will demand results from

agencies over time. The development will accelerate when Western platforms come to the market

in 2014 – they will bring their own clients that have a successful buying experience with them.

Russian RTB market in 2013, ©ADFOX, 2014 18

Alexey Rayevsky, Lamoda: RTB share will exceed 10% of the display advertising market. Further

growth will be based on the data market development and new large platforms joining the

bidding.

Russian RTB market in 2013, ©ADFOX, 2014 19

Major events on the Russian RTB market in 2013

January

The operator of selective advertising Soloway gave its 2012 results. The company's turnover reached

500 million rubles. One of the most important events of the past year in Soloway was the rapid

development of RTB technology in Russia. By connecting the RTB protocol to Google Double Click Ad

Exchange and ADFOX SSP, Soloway allows its advertisers to place banner ads in the Google advertising

network, on the sites of the holding SUP Media and the media agency +Sol. At the same time, the

Soloway behavioral targeting can be applied to all of the connected platforms21.

March

The Internet company Tinkoff Digital launched its mobile platform MadNet, built on RTB technology.

According to company heads, it has entered into agreements with Google DoubleClick Ad Exchange,

Smaato, Mopub, Mobclix and Hunt Mobile Ads22.

The fund Russian Ventures and AIData have launched DMP Loger. According to the creators, the Loger

platform is independent, and does not belong to one of the Top 10 media holdings, which does not

impose limits on the system in terms of the selection of the data provider23.

April

The fund iTech Capital invested $3.5 million in the Garpun advertising platform. According to the press

service, the funds will be used to speed up the development process, and also to automate additional

online marketing channels, including RTB24.

The advertising network Kavanga launched a new company Republer. The Sell Side Platform (SSP) will

allow site owners to sell traffic at auctions in real time. Dmitry Glavatsky was appointed CEO of

Republer. The platform is currently being tested25.

The independent advertising DSP-platform by Hubrus has been launched commercially. Iponweb is the

support partner and supplier of technology.26

21

http://internet.cnews.ru/news/line/index.shtml?2013/01/15/515462 22

http://internet.cnews.ru/news/line/index.shtml?2013/03/11/521982 23

http://www.towave.ru/news/fond-russian-ventures-i-aidata-zapustili-proekt-loger.html 24

http://www.digit.ru/internet/20130410/400530137.html 25

http://www.sostav.ru/publication/kavanga-sozdala-rtb-kompaniyu-republer-2301.html 26

http://adindex.ru/news/digital/2013/04/3/98042.phtml

Russian RTB market in 2013, ©ADFOX, 2014 20

May

The venture fund Prostor Capital invested in the company CPAExchange - an automated service for

placing online adverts based on the CPA (cost per action) model. The fund now owns 25% of the

company. The size of the investment was not revealed. The funds will be used to complete the

development of the RTB-systems in order to increase conversions and also to buy traffic27.

June

The international advertising group Aegis Media launched an advert purchasing system in Russia, which

is displayed to users in real time. Amnet (belonging to Aegis) has developed an RTB-platform, it is used

by advertisers in the U.S., the UK, Germany, France and other countries28.

August

Segmento, which uses RuTarget RTB technology, entered the Russian media marketing and advertising

market. Segmento provide high-tech advertising services to agencies and end clients29.

December

Segmento launched the Brand Safety Shield service based on RuTarget's web-crawler technology to be

able to guarantee that its clients' ads won't appear on unwarranted sites30.

Between Digital launched DSP Intency.

P.S. February 2014

Yandex and Google agreed to cooperate in the field of advertising. The Yandex display advertising

service AWAPS will be connected to Google's RTB system (DoubleClick AdExchange), and Google's

DoubleClick Bid Manager will be connected to Yandex's RTB system31.

27

http://www.adindex.ru/news/digital/2013/05/30/99393.phtml 28

http://www.vedomosti.ru/tech/news/12635631/potorguyutsya_za_polzovatelya 29

http://www.searchengines.ru/press-releases/archives/segmento.html 30

http://www.searchengines.ru/seoblog/segmento_zapustila.html 31

http://company.yandex.ru/press_releases/2014/0226/index.xml

Russian RTB market in 2013, ©ADFOX, 2014 21

Schedule. Russian RTB market ecosystem

Russian RTB market in 2013, ©ADFOX, 2014 22

Schedule. Market participants

Profile: Data Suppliers

AddThis is the largest sharing and social data platform. The company personalizes the web with powerful, easy-to-

use social engagement tools, APIs and services. AddThis social plugins and analytics are used by over 14 million

sites worldwide.

http://www.addthis.com/

Profile: Data Suppliers

ADEx – a platform for providing target data. Since 2009 engages in the collection and provision of non-personal

data about users activity for promotional use.

http://adex.pro/

Profile: SSP, AdServer

ADFOX has operated in the market since 2005 and provides independent technologies for management of

advertising in Internet, mobile, application, and online video. In November 2012, ADFOX entered the RTB market

and launched ADFOX SSP - its own platform for commercial use to optimize advertising revenue on the websites.

The ADFOX SSP has undergone technical integration with all of the leading DSPs on the market.

http://adfox.ru/

Profile: AdServer

The Internet advertising management system AdRiver began working in March 2001 and is now one of the leaders

in the Russia technological solutions market in the field of online advertising. AdRiver software currently provides

more than 2 billion ad impressions per day. AdRiver belongs to the Internest group of companies.

http://www.adriver.ru/

Russian RTB market in 2013, ©ADFOX, 2014 23

Profile: DSP

AdSniper is a system to automatically purchase advertising with price correction in real time in accordance with

the campaign results.

http://adsniper.ru/

Profile: DMP

Aidata.me is a data management platform. It operates in the markets of Russia, CIS, Brazil and Southeast Asia. The

company is engaged in segmenting and transfer of socio-demographic and behavioral data. Various advertising

platforms using data Aidata.me provide 100 million targeted impressions per day.

http://aidata.me/

Профиль: DSP

AppNexus is a New York City-based company that provides a platform specializing in real-time online advertising.

As of 2013, AppNexus servers process 16 billion ad buys per day; it handled an estimated $700 million in ad

spending in 2012, giving it the biggest reach on the open web after Google.

http://www.appnexus.com/

Profile: Trading Desks, DMP

The project was launched in November 2012. Auditorius works like TradingDesk in the Russian RTB ecosystem.

http://www.auditorius.ru/

Russian RTB market in 2013, ©ADFOX, 2014 24

Profile: DSP

Begjun is the first Russian performance based contextual advertising service with auction pricing. It enables a “one

stop shop” advertising campaign to be held on partner sites in all the major search engines on the Russian

Internet, as well as in external advertising services. The company has been operating on the market since 2002,

and in 2012 it launched its own RTB-service for its customers.

http://www.begun.ru/

Profile: SSP

Between Digital is an integrated platform for managing website advertising that works with RTB technology. The

commercial launch was announced in December 2012. Today Between Digital is integrated with AdRiver, Begun,

CPA Exchange, Google, and Retargeter. In December 2013, the company launched its own DSP Intency.

http://betweendigital.ru/

Profile: DSP

Crimtan is a behavioral advertising network, built on the basis of its Real-time Audience & Media Platform. The

company provides advertisers with advanced internet marketing features, including profiling, segmentation and

targeting of the Internet audience, optimization, delivery and campaign reports through a vast network of sites,

networks and traffic aggregators.

http://crimtan.com/ru/

Profile: DSP

Criteo is a global leader in personalized retargeting. The company was founded in 2005 in Paris and now works

with more than 4000 customers and 600 publishers worldwide. Criteo has business partners in 30 countries in

Europe, Asia, the U.S. and has opened representative offices in 15 of them. The company’s largest clients include

the Internet store Ozon, Sapato.ru, and Quelle.

http://www.criteo.com/

Russian RTB market in 2013, ©ADFOX, 2014 25

Profile: RTB Stack

The company was founded in 1998, and now is a leading web corporation in the major global markets. The

company has been developing RTB since 2009, and has so far invested more than a billion dollars in the

development and promotion of this technology. Google has operated in Russia since 2005, and first offered its

RTB-products to its customers in 2012.

www.google.ru

Profile: DSP

Russian technology for optimization of advertising budgets. In addition to providing tools to purchase advertising

directly, targeted according to the actions and behavior of the audience in real time, customers are given access to

the Russian traffic exchange. The first independent service using the company's technology is Retargeter.

http://hubrus.com/

Profile: DSP

Kavanga is one of the largest Russian Internet advertising networks that operates on its own process platform. The

company was founded in 2008. Today it integrates more than 1000 high-quality thematic sites into a single

advertising space. In Russia it gets 27 million visitors per month aged 12-54 years.

http://kavanga.ru/

Profile: Data Suppliers

LiveInternet is a portal that has since 2003 provided website statistics services and online diaries, and also a variety

of other services that serve a wide range of user needs. The leading statistical service LiveInternet provides tools to

collate, process and then analyze website visitor data.

http://www.liveinternet.ru/

Russian RTB market in 2013, ©ADFOX, 2014 26

Profile: DMP

Lotame empowers publishers, agencies, and brands to unlock the full value of their audience data with data

management platform Crowd Control. Clients leverage Crowd Control to collect unstructured audience data,

irrespective of the source, and convert that audience data into insights and analytics, which allows them to make

informed decisions and increase ROI of their data assets.

http://lotame.com/

Profile: DSP

Headquartered in New York, MediaMath was founded in 2007 and is a leader in the demand side platform

category (Forrester Wave, Q4 2011). The company buys billions of highly targeted ads per month on behalf of

dozens of agencies, including all the major agency holding companies. Major brands include American Express,

Kellogg’s, Prudential and Kayak. MediaMath is a global company with additional offices in London, Boston,

Chicago, Los Angeles and San Francisco.

http://www.mediamath.com

Profile: Retargeting

Founded in 2005, myThings is a global leader in customized programmatic ad solutions. Turning big data into

incremental demand, the company personalizes over 5 billion impressions a month for top advertisers in 30

markets including Adidas, Walmart, ToysRUs, Littlewoods, Very.co.uk, Zalando, Orange, Best Buy, and Microsoft.

http://www.mythings.com/

Profile: SSP

OpenX is a global leader in digital and mobile advertising technology. OpenX’s vision is to unleash the full economic

potential of digital media companies. OpenX solutions provide a unique Software as a Service platform by

combining ad serving, an ad exchange, which includes Supply Side Platform technology, and content valuation.

http://openx.com/

Russian RTB market in 2013, ©ADFOX, 2014 27

Profile: Data Suppliers

Pluso is a sharing service in social networks and blogs. 55 thousand sites have installed the Pluso plugin. Pluso used

the widely known link exchange service AddThis as its protocol. The company provides data to Russian DMPs.

Profile: SSP

Affiliate program which offers the sale of advertising tools for web sites, including the RTB auction. Connected to

several Russian DSPs.

http://pay-hit.com/

Profile: Data Supplier

Proximic provides advertising networks, agencies, DSPs, and publisher networks with the information needed to

drive premium ad placements by combining non-linguistic contextual profiling technologies, resulting in better

targeted ads and filtering content across highly granular topical categories.

http://www.proximic.com/

Profile: Retargeting, Trading Desks

Quisma offers full-service, innovative technology and profound expertise covering the entire spectrum of digital

marketing. The agency was founded in 2001 and became a member of GroupM (Mindshare, Mediacom, MEC,

Maxus) in 2007. Headquartered in Munich the agency has other 12 offices in 10 countries. Quisma works in Russia

since 2012.

http://www.quisma.com/

Russian RTB market in 2013, ©ADFOX, 2014 28

Profile: SSP

Republer is a part of Kavanga Group as well it is a stand-alone project that is span off from ex advertising network

Kavanga. Republer SSP — one of the first full-service Sell-Side Platform in Russia. Republer SSP technology

platform was developed inhouse. Our tech-savvy team boasts a great experience of working with publishers’

business inherited from Kavanga.

http://republer.ru/

Profile: DSP

RuTarget is a Russian developer of RTB technologies, creating professional solutions to order. Segmento uses

RuTarget RTB technology. Segmento provides complex high-tech advertising services for agencies and advertisers.

http://www.rutarget.ru/

Profile: DSP

Founded in Berlin in 2009, the company works with Internet marketing, network analysis and scalable computing.

As a leading supplier of bidding solutions for advertising companies worldwide, the company helps its customers

gradually increase sales, using what are for the brand effective and secure marketing channels to obtain the

desired result, which are very clear to the client.

www.sociomantic.com

Profile: DSP, Retargeting

The selective advertisement operator Soloway has operated on the market since 2004 and uses all of the most

advanced developments in the field of Internet advertising. Soloway collates and analyzes information about

Internet users: about where and how they access the Internet, search engine terms, and also website and page

visitor history. Adverts are shown in the extensive media space, which includes hundreds of thematic sites.

http://www.soloway.ru/

Russian RTB market in 2013, ©ADFOX, 2014 29

Profile: DSP

Targetix specializes in the development of Internet advertising solutions. In 2009 the company launched its own

media network Targetix Display Network, which now integrates more than 5000 Russian language portals.

http://targetix.net/

Profile: DSP

The largest independent company in the advertising technology sector and the recognized leader in platform-

based mobile, video, display, and Facebook advertising. An early pioneer of data-driven advertising, having

delivered one of the industry’s first programmatic ad impressions in June 2009. A technology-first company,

committed to making big data infrastructure available to customers on five continents on a self-service,

subscription basis.

http://www.turn.com/

Profile: Data Suppliers

uLogix operates the data on more than 70 million usersrs monthly, processing an average of 15 interests of each

user. The company declares about the coverage of Runet at the level of 80%. Also uLogix offers the technology of

mining of retargeting.

http://ulogix.ru/

Profile: DSP, DMP

Vi is the largest media advertising market operator in Russia and Eastern Europe providing professional media

advertising outsourcing services, including media-selling, analytics, law and IT-support. Company consists of

media-selling companies ranked as leaders in basic segments of the Russian media advertising market Vi is

conducting business in Russia, Belarus and Kazakhstan.

http://www.vi.ru/

Russian RTB market in 2013, ©ADFOX, 2014 30

Profile: Data Suppliers

VisualDNA is a fast growing startup with offices in Moscow and London. It uses its own patented technology to

collate data about Internet users. To create the user portrait it uses visual tests.

http://data.visualdna.ru/

Profile: Trading Desks

VivaKi was established in 2008 by Publicis Groupe, the world’s third largest marketing communications

organization, to accelerate the digital transformation and expertise of the Groupe and its agencies. Today VivaKi is

a global leader in digital advertising solutions, working with the world’s leading organizations to help them

navigate the evolving and chaotic consumer landscape.

http://www.vivaki.ru/

Profile: Trading Desks

Xaxis is the world’s largest audience buying company. Through its proprietary platform, Xaxis offers advertisers a

single, comprehensive resource from which to reach and engage with global audiences across the universe of

digital media. Xaxis does this for its GroupM agency partners, Maxus, MEC, MediaCom, and Mindshare. In October

2012 Xaxis opened its office in Moscow as part of GroupM Russia.

http://www.xaxis.com/

Profile: RTB Stack

Yandex is the largest Russia Internet company, with its core business being search engine development. The

company has a search engine of the same name and the Internet portal yandex.ru. Founded in 1997, Yandex

announced the launch of its RTB-platform in March 2012. Several DSP systems have now been connected to the

Yandex RTB-system, including Direct, which belongs to Yandex and a media advertising system.

http://www.yandex.ru/

Russian RTB market in 2013, ©ADFOX, 2014 31

Russian RTB market in 2013

Office 508, 6 B Artioukhinoi Street, Moscow, Russia

Tel +7 (495) 661 76 77

Email: info@adfox.ru

www.adfox.ru

Authors:

Boris Omelnitsky bo@adfox.ru

Nikita Pasynkov nikita@adfox.ru

Vera Khiteeva vera@adfox.ru