The State of Programmatic in Russia

The State of Programmatic Advertising in Russia

The number of companies in Russia who are focusing on digital transformation doubled between 2018 and 2020, making it a big priority for businesses in the country. This involves investing in new technologies, such as mobile app development and advertising, to enable a more customer-driven strategic approach to business.

IAB Russia’s study states that across Russia’s digital mix, advertisers have found mobile to be one of the most important platforms for promotion, making mobile advertising a key part of their campaigns. 45% of their respondents agreed that mobile advertising is important in their digital strategy, while 17% mention that mobile advertising is a priority for them. 

Back in 2019, programmatic advertising spend in Russia reached US $963M, and is expected to increase to US $1.3B by 2021. In 2020, 73% of the country's display ad spend was from programmatic advertising. 

Smartphone and Internet Penetration

With a population approaching 150 million, Russia ranks 6th as the country with the most smartphone users in the world. According to NewZoo, it has a total of over 99M users, with a 68.5% penetration rate in 2020, making it a landscape suitable for mobile advertising. 

Russia also has a very high number of mobile internet users, which is expected to grow to 62.5% by 2023. This makes their mobile marketing landscape very competitive compared to other countries in the region. Russia is the top smartphone market in the CIS region, which drives the surge in data demand by users, According to GSMA, smartphone connections will reach 168M in Russia by 2025. 

Source: The Mobile Economy: Russia and CIS 2020, GSMA

It was found in We are Social and Hootsuite’s Digital 2021 Report that 20.6% of smartphone and tablet users in Russia aged 16 to 64 discover new brands that they have not heard of through ads from their smartphones or tablets. This falls a little below consumer review websites, which shows that mobile advertising can be as effective in promoting new brands or products. 

brand discovery russia
Source: Digital 2021: The Russian Federation, We are Social and Hootsuite

Popular App Categories 

Because of COVID-19, more and more people have been using their mobile phones for practically everything: entertainment, banking, exercise, food delivery, messaging, etc. 78% of Russian publishers release non-gaming apps, and the remaining 22% are games. This suggests that the majority of the country focuses on apps rather than mobile games. Due to the lockdowns and social distancing policies, data from Sensor Tower showed that messaging and entertainment apps were the most popular apps in Russia for Q4 2020. 

Telegram, a well-known messaging app, had 6.5M downloads. It was found to be the most popular in Russia, with 38% of the app’s European downloads coming from them. 

TikTok, the top app in Europe for that quarter, had Russia as their top market, with the country accounting for 31% of the app’s downloads in the region. 

Food delivery apps were also popular in Russia during the same quarter. Data by App Annie also showed that sessions for food delivery apps skyrocketed in Russia, having a 105% YoY growth in Q4 2020. 

Although gaming apps are not that popular in Russia compared to other app genres, it still has a very low cost per install (CPI) compared to global benchmarks which sit at $0.86 and $0.44 for iOS and Android, respectively. 

Russia CPI
Source: Chartboost, April 2020 via eMarketer

Programmatic Forecasts 

  • 5G mobile technology

    In 2020, 4G became the leading mobile technology in the CIS region, but 5G is projected to launch in Russia this year. 5G allows for mobile marketers to have more creative capabilities for their mobile programmatic ads because of the increased bandwidth and high-speed data delivery that mobile users enjoy.

  • Continuous increase in mobile app revenue

    According to data by Statistica, mobile app revenue in Russia is projected to reach US $73M in 2021, with a compound annual growth rate (CAGR) of 13%. The average revenue per user (ARPU) is high and is expected to amount to US$4.50.

Aarki has been running winning mobile programmatic campaigns in Russia for a while now. If you would like to learn more about how Aarki can help you scale there, shoot us a message here.

Topics: Marketplace Insights