Letter 5 – “Online advertising and the principles of its pricing in Russia”

Hello,

Today we will talk about online advertising. I will not focus attention on web-resources and smm advertising. This letter highlights the issues related to paid advertising and the principles of its pricing in Russia.

Let's start with advertising systems such as Yandex Direct and Google Adwords- two most powerful advertising players in the area of search engine advertising and media search engine advertising in Runet (Russian Internet). I am sure that you are familiar with the basics of SEA advertising pricing, but let me repeat the main principle-the cost per ads click or display is not stable and based on many factors: presence of competitors in your niche, quality of your ads, and many others.

Advertisers have different approaches to the work in these systems. Let's consider some of them:

The advertiser talks to the agency: "So, guys, I don't want to go into all this advertising crap, I just need customers, let's bring me results as sales!". And such approach happens to be in B2C segments with high demand. In this case, the agency assumes responsibility for the result and the client pays not for traffic volume, but for the result as a number of qualitative applications from clients or even sales. It is clear that the agency's revenue in this case is formed in this delta between the actual cost per lead and the cost per lead paid to the agency by the advertiser. Everything is fair and clear.

The advertiser wants to get a certain amount of target visitors to the site at a certain charge. In this case, the agency provides the media-plan, where shows the traffic volume and the cost per click (CPC) on the basis of which the budget is formed. And then the agency also covers risks to the advertiser ensuring the traffic volume.

The advertiser clearly understand the pricing system and already would like to go into the campaign setting process, then he says: "I allocate the budget for a context, you properly set up the campaign, we spend as much budget on the context as the system requests, to be more precise what demand will be on the Internet for the service, and if there are many clicks, the budget will be simply limited. I pay an interest from the amount of spent budget".

Today RMAA Group team is working in all three pricing system, each time negotiating with a client what approach will be more interesting for him.

Best regards,
Vadim Tylik

P.S. RMAA Group specialists are ready to assist you in creating Digital Marketing strategy as well as adopting it to Russian market.