Warc, 10 June 2014
MOSCOW/NEW YORK: Yandex, the leading Russian search engine, is developing its programmatic offer in the expectation that economic conditions are likely to drive reluctant advertisers and agencies towards cheaper, more effective options.
Eugene Lomize, head of advertising technology at Yandex, explained to Ad Exchanger that while programmatic products were growing fast in Russia – up to fivefold in the past year – they still constituted only a very small part of its business, "equal to a week and a half of revenue of our contextual advertising".
The existing industry structure and traditional working methods were holding back development, he said, but "the market will be forced to switch to more efficient products". And he noted a similar situation in 2008, when recession had forced clients into a "sudden shift" into contextual advertising.
Yandex partnered with Google earlier this year to develop display programmatic advertising in Russia. Google's advertising customers will have access to Yandex's inventory and Yandex's ad customers will have access to Google's DoubleClick Ad Exchange.
"We are still in the integration process for our systems," Lomize noted, but he expected that both sides would benefit while the market was growing fast. "There will be a moment later when we shall have to start thinking in terms of competition," he allowed.
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If programmatic was still at an early stage, then mobile was yet to reach even that. "There is a lot of buzz about it," Lomize said, but "no results". Take-off was still a couple of years away.
For now, the focus for Yandex was on "making our advertising user-centric", by knowing all the devices of a specific user, and then it planned to move on to video advertising.
In a separate development, the company recently announced plans to turn its Yandex.Direct service, which 19m Russians use to search for goods offered online, into a full-scale shopping site.
Bloomberg reported that the business model would mimic Amazon, with Yandex working alongside some 40,000 online stores, processing payments and handling delivery.
Data sourced from Ad Exchanger, Bloomberg; additional content by Warc staff