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Ecosystem: Performance Marketing in Russia, Market Overview - all you need to know!

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Today we will talk about performance marketing in Russia. So how Russian performance marketing market works? Find out more in our new blod post.

All interactions with the audience on the Internet, depending on the goals of the advertiser, can be conditionally divided into two large parts - Brand marketing and Performance marketing.

The tools used in performance marketing must be measurable and comparable. Their value is determined by the contribution of the instrument to the conversion - the transition to final sales.

Price models of performance marketing depend on the type of paid targeted action. The most common are: CPC (Cost per Click) - with cost per click, the advertiser pays only for the clicks that lead to his website. CPL (Cost per Lead) - the cost per target action, for example, an application or a call. To denote this model, the term "lidogeneration" (from the English lead) is often used.

 

CPA (Cost per Action) - the cost per targeted action is on the advertiser's site, for example, ordering or filling the food basket (some companies consider the CPA model as a special case of the CPL model).

Performance marketing tools in Russia

Ecosystem Performance marketing in Russia

The existing product line of tools and technology for performance marketing is diverse and consists of many elements.

The following marketing ecosystem, performance marketing, describes the place of these tools in relation to each other, the advertiser and the audience.

Performance marketing growth drivers. Market performance marketing rose from a small segment of the advertising market to the second in terms of channel placement after television.

Drivers of growth are:

  • efficiency of placements;
  • a variety of targeting, with which can reach even a very narrow target audience;
  • growth of mobile advertising. In the performance market, there are about 3,000 agencies and more than 200 different technology companies.

Efficiency and attention to the audience - drivers of the growth of interactive advertising

If several years ago performance was limited almost exclusively to the use of contextual placements and SEO, then for the past few years the whole industry of programmatic placements, targeted advertising in social networks and marketplaces has grown.

Since its inception, performance - advertising had to meet three criteria:

  • show only the message that the user is interested in;
  • show it where the user is comfortable;
  • show it when the user is ready to accept it.

Therefore, the top three drivers of advertising performance growth - efficiency, the variety of targeting (correspondence of the message to the user's needs) and the growth of the mobile Internet audience (user achievement) - remains unchanged.

 

In addition, performance marketing advertisers are attracted by the ease of measurability of the results, the growth of the audience and the many options for working with it. Different models of measuring the effectiveness of advertising campaigns.

When planning and buying advertising, most companies use such parameters as clicks (71% of respondents) and final purchase of goods (56%).

Risks for further growth of performance marketing budgets in Russia

Many companies identified insufficient coverage of the audience as the main deterrent to implementing interactive advertising. These companies have

already reached all the users available to them now. To increase their investment in advertising, they need new audiences. These audiences can appear either with penetration of the Internet previously unexplored (territorial expansion), or with the growth of the audience on new platforms - for example, mobile phones, tablets and smart-TV.

In addition, for many companies involved in performance marketing, the share of interactive advertising is already so close to 100%. Thus, the increase in costs for this type of advertising means an increase in the budget for marketing in general, which is not always possible.

Finally, due to legislative and internal constraints (for example, as in the case of medical prescription drugs), companies can not make full use of all the capabilities of performance marketing.

Also, growth is hindered by the intervention of large industrial players, such as Yandex, Google, VKontakte.

Experts pointed out that for them one of the important factors limiting the growth of interactive advertising budgets in the performance marketing segment is the lack of expertise on the client side.

What does the client expect from an advertising agency?

The interaction between the agency and the client is constructed differently when working with different performance channels. In most cases, the agency's involvement in the planning and placement of advertising campaigns is great.

The most demanded agency expertise when working with:

  • Remarketing (41% of the respondents noted that the agency plans and places this channel);
  • targeted advertising in social networks (35% of respondents);
  • CPA-platforms (32% of respondents);
  • Search advertising (30% of respondents).

The role of agencies includes technology companies. Recognizing the current role of Russian advertising agencies as experts in performance marketing, they predict that with the development of technology, simplifying the interfaces of systems and software, the role of advertising agencies will be quite small.

But the success of the performance-advertising campaign depends not only on the agency. The client, too, has responsibilities, and needs to keep track of what happens after the click, make changes to the site and follow other recommendations of the advertising agency

Lack of client expertise is the main risk of successful cooperation. It is extremely important that everyone can speak the same language, and have a common view when setting goals and objectives.

The role of technology for performance marketing in 2018

The development of technologies in performance marketing in Russia today is composed of three elements:

  • First, it is the accumulation and use of knowledge about the user, which makes it possible to make an advertising message as personalized as possible. This is the use of DMP-platforms, attempts to integrate CRM-systems and advertising placements, experiments with native video, etc;
  • Second, the integration of technologies into each other. For example, automation and optimization of advertising arrangements begin to include modules for analyzing targeted calls and web analytics;
  • Third, the desire to maximally automate the already existing routine processes with the help of API-integrations and data visualization tools.

The role of the analytics department for Russian performance marketing

The analytical department is the place where all information eventually is accumulated and where decisions are made about further steps.

It is extremely important to use the services of analytics and special software. The development of these technologies is an important trend in the market of performance marketing. The most famous and popular are free web analytics services Google Analytics and Yandex.Metrics - their codes are installed in 82% of companies. Such widespread use suggests that the functionality of these systems covers the needs of basic analytical functions for most companies and is the "gold standard" for other analytical systems.

Many experts noted that they use data visualization programs in their work: Tableau, Power BI and others. Companies that have been actively and for a long time engaged in the collection and analysis of data on their customers are faced with the problem of not the lack of information, but its redundancy. Data visualization programs help to choose among a variety of information collected and analyzed that which reflects really important characteristics, and makes daily routine analysis more effective.

We see that the market performance marketing in Russia does not stand still and is actively developing, thanks to new technologies and effective interaction between the client and the advertising company.

You can find out more about Digital Marketing Landscape in Russia in our White Paper called "DIGITAL MARKETING IN RUSSIA 2018. Finding your customers on the internet in Russia — how to go about it?"

Our team is ready to assist you in mastering the digital market in Russia! Contact us on the "Contacts" tab.

Source – “data insight” research company.

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About the Author

Vadim Tylik – Russian entrepreneur, Founder and President of the RMAA Group. Vadim helps foreign companies to develop and implement marketing strategies in Russia and CIS region, create performance based media campaigns in order to expand more effectively on the Russian market.

Author Vadim Tylik