Russia’s OOH: Overview and Key Trends for 2022.
In 2022, the OOH sector in Russia experienced significant growth after the pandemic, similar to other segments of the advertising market. However, there was a subsequent decline, followed by stabilization in the third quarter. This was partially due to the departure of foreign companies that previously acquired large areas of outdoor advertising. Despite this, industry experts believe that OOH was not as severely impacted as online advertising. This is because a significant number of domestic advertisers were and still are present in this sector.
To determine the current state of the OOH market in Russia, as well as identify its primary trends and provide an estimated outlook for the future, QB Agency experts conducted a review.
2022 Forecast and Interimedia Results.
The Association of Communication Agencies of Russia (ACAR) expert commission reports that the first quarter of 2022 was profitable for the advertising market, with a 5% increase in the total volume of advertising across various media to 128-130 billion rubles, compared to the same period in 2021. However, the indicators for TV, radio, press, and OOH remained at the same level as the previous year.
In terms of out-of-home advertising, the volume experienced a slight decline in March, which is unusual as this period usually sees a seasonal increase in commercial loading. Despite this, the percentage of brands leaving Russia was relatively low in the OOH segment.
Considering this situation and the potential risks of foreign companies leaving the Russian market in the future, Adindex specialists predicted a 5 billion ruble reduction in the OOH segment in April 2022. They calculated that the share of budgets for brands from countries unfriendly to Russia is 14.84%, and multiple development scenarios were assessed.
If the losses are minimal, the catering category, led by McDonald’s (57.05%), You! Restaurants International Russia (32.5%), and Burger King (10.5%), will have the most significant impact on the OOH segment. The furniture and interior items category, driven by the IKEA brand (1.21% of the total OOH market), follows in second place, followed by the soft drinks category, where Coca-Cola (53.4%) and Pepsi Co (46.6%) dominate. If the worst-case scenario occurs, the construction and finishing materials category will also be impacted due to the Leroy Merlin brand (1.64%).
Later in May 2022, All-billboards analysts released their annual billboard operator rankings and expressed their views on the current situation. According to Andrey Baiduzhy, the head of the service, even with the best possible outcome, the out-of-home advertising market will continue to decline in 2022, potentially by tens of percent, particularly for airport advertising, which has yet to recover fully from the pandemic. Additionally, the volume of OOH in cinemas has already reduced to an insignificant level.
Advertisers confirmed these conclusions and provided their commentary on the current state of the market.
In an interview with Kommersant, representatives of Gallery clarified that the OOH segment is currently experiencing an active departure of foreign advertisers, with some categories experiencing a 70-80% decline in this regard. The situation is ambiguous, with some sectors like real estate developers and banks increasing their share of outdoor advertising, while auto manufacturers reduce their budgets for OOH ads in Russia.
Natalia Valieva, the CEO of Sunlight Outdoor, acknowledges that the market is currently unstable and uncertain, but she is not convinced about a significant decline in the segment. In an interview for Adindex, she pointed out that while the share of foreign advertisers who have left their platform is 20%, their revenues have only been affected by 9%. However, she anticipates that the current situation could lead to budget outflows from Russian advertisers as well. She also noted that digital surfaces ordered by operators but not paid for may be redeemed at a 50% higher exchange rate, which could increase their payback, albeit with a drop in sales.
Konstantin Major, the CEO of Maer media holding, also sees both positive and negative aspects of the current situation.
According to Gallery representatives (in an interview with Kommersant), foreign advertisers are currently leaving the out-of-home advertising segment, with 70-80% of advertisers in some categories exiting the market. However, while auto manufacturers are reducing their budgets for out-of-home advertising in Russia, real estate developers and banks are increasing their share of outdoor advertising. Natalia Valieva, CEO of Sunlight Outdoor, acknowledges the market’s instability and the outflow of budgets from Russian advertisers. She expects a decline in the industry, but emphasizes that digital out-of-home advertising operators are not affected by the increase in costs that traditional banner operators face. As a result, DOOH operators can use a “First in price and coverage” competitive strategy to their advantage.
All-billboards specialists support the idea that digital out-of-home advertising will continue to grow in 2022, allowing for quicker campaign launches due to the absence of long-term printed material preparation. The share of DOOH is expected to reach 43-45% by the end of 2022, up from 40% in 2021, with advertisers favoring digital media and rejecting static designs. Although foreign advertisers are leaving the market, the emergence of new players in the advertising industry and the rise of digital out-of-home advertising may offset any declines in the sector. Therefore, the main trends of 2022 in out-of-home advertising are being set by the digital format.
Real-life Application of DOOH in Russia
The increasing popularity of digital out-of-home (DOOH) advertising worldwide is mainly due to programmatic technologies that allow for adaptation to various weather conditions and audience characteristics. This has made outdoor advertising a fully-fledged digital communication tool that offers more flexibility.
According to estimates from Gallery, DOOH-programmatic already accounts for approximately 10% of digital outdoor advertising revenue in Russia in 2021. This has led to advertisers who previously overlooked outdoor advertising as being less technological, to take a closer look at this format.
Innovations in DOOH have expanded the possibilities of ad placements, such as using AR, VR, mixed reality, gesture motion sensors, beacon/RFID, mobile retargeting for hypertargeting to pDOOH, IoT, cloud computing, and real-time channel integration on digital screens. These technologies have improved the user experience and allowed for real-time interaction with outdoor advertising. In 2022, beacons were added to these tools, allowing advertisers to send signals from advertising screens via Bluetooth to nearby smartphones, providing personalized experiences and making it a profitable means for news agencies, shopping malls, and transportation services.
In summary, DOOH provides advertisers with valuable data on consumer behavior that should be taken into account in further marketing communication. These data include ad playback time, location of DOOH installations, total costs, and more, regardless of the digital tool used for a particular advertising screen.
These technologies are widely used in the Russian market, with one caveat. On the one hand, DOOH makes up around 40% of the revenue in the segment, similar to the USA. However, the share of digital inventory on the market is only 19%, although it has been growing in recent years. This figure is expected to rise considerably by the end of 2022, as not only traditional OOH advertisers but also new digital players are interested in the DOOH format.
In 2022, ACAR analysts surveyed the level of digital technology coverage on the market. They found that 55% of regional outdoor advertising operators provide RTB, 46% use guaranteed sales or OST, and another 46% provide API integrations. Among Moscow advertisers, only 25% use auction sales, 29% guarantee a fixed number of impressions, while API is 33%. Wi-Fi audience tracking is the most common technology for collecting and analyzing data, with 47% of operators in Moscow, 29% in St. Petersburg and 24% in the regions offering this option.
In addition, OOH customers have access to other technologies such as launching videos by triggers, live broadcasts, real-time targeting and retargeting by interests and socio-demographic characteristics, 3D advertising, dynamic creative management and synchronization of advertising impressions with multiple facades. Operators also provide data on the effectiveness of DOOH, including brand and sales lift, independent pixel meters and monitoring of advertising output.
In terms of DOOH coverage, Moscow and St. Petersburg have the largest number of digital screens with 885 and 495 surfaces, respectively. The regions have a total of 1,164 DOOH advertising platforms, with the majority located in Nizhny Novgorod (299), Yekaterinburg (207), and Novosibirsk (147).
Russian operators typically offer five types of screens for placement, with the most common being a 3×6 square meter digital billboard (DBB), accounting for 75% in St. Petersburg, 72% in Moscow, and 62% in the regions. The second most common is the digital super site with dimensions of 15×5, 12×3, or 12×4 square meters, which accounts for 24% in St. Petersburg, 19% in Moscow, and 16% in the regions. Digital city board (2.7×3.7 square meters) and digital city format (1.2×1.8 square meters) are capable of displaying video content, but they are only partially available in Moscow and the regions, and are less in demand. In St. Petersburg, they are not available at all.
According to this data, it appears that Russian operators offer sufficient DOOH inventory and technological capabilities to enable advertisers to launch digital outdoor campaigns not only in Moscow, but also in the regions, complete with all the necessary analytical features.
Following the departure of foreign advertising platforms from the market, the digital advertising landscape has undergone a transformation, leaving behind an unfulfilled demand that cannot be immediately met by the remaining internet platforms. In this context, digital outdoor advertising, with its modern tools for inventory procurement and campaign management, has become increasingly appealing to advertisers who previously relied on internet-based promotion channels, as noted by Boris Peshnyak, Commercial Director of Rus Outdoor in a comment to Sostav.ru.
DOOH Trends with Great Potential in the Coming Times
Experts predict that DOOH will experience significant development in the near future thanks to various digital technologies. Several trends are expected to emerge.
Firstly, digital outdoor advertising will become increasingly measurable, allowing for better evaluation of campaign coverage. DOOH campaigns can be evaluated through various indicators such as profitability to offline sales points, website and mobile application conversions, and ultimately, conversions and sales.
Secondly, advertising at airports will see new formats and opportunities as air traffic gradually returns to pre-pandemic levels. It is expected that outdoor advertising at airports will also be digitized to improve interaction between advertising and the audience.
Thirdly, DOOH will increasingly integrate with Internet TV (OTT), enabling advertisers to expand video strategies by reaching a larger audience. The digital format of outdoor advertising also allows marketers to place creative content and user-generated content (UGC) through their brand’s social media. Additionally, geolocation capabilities in smartphone apps next to DOOH can create an omnichannel experience with targeted advertising, redirecting potential customers to the nearest points of sale.
In conclusion, investment in digital outdoor advertising will increase its effectiveness, bringing it to a new level of strategic and technological marketing activity. This is evident from the budget growth in the DOOH segment, including the Russian market.
Audience Opinion
Apart from the technological benefits of DOOH, its effectiveness in 2022 can also be measured by the positive reception from consumers. According to Kantar Group experts, the digital format of outdoor advertising encourages interaction with advertising messages and even influences purchasing decisions. In a survey of 11,000 respondents from various countries, DOOH was rated as the most innovative, relevant, memorable, and action-provoking form of advertising. The study revealed that in some aspects, DOOH surpassed other popular advertising channels in terms of perception.
In conclusion, the project authors stated that consumers appreciate and trust DOOH advertising, believing that it enhances their environment. They also tend to rate digital outdoor advertising more positively than marketers do.
In Conclusion
Despite the market’s instability during the period of sanctions policy towards Russia, the OOH advertising segment has remained stable in terms of its indicators. This is contrary to the predictions made by many experts at the beginning of 2022, who anticipated a decrease in income. The reason behind this is the fact that the share of departed companies in OOH is about 14-15%. Additionally, advertisers are increasingly showing interest in the digital format of outdoor advertising.
Choosing DOOH and taking advantage of its technical capabilities requires a high level of expertise. However, the result is worth all the necessary efforts, as indicated by various analytical data for 2022.
If you’re looking for the most effective platforms for posting a DOOH campaign while considering all the features of the Russian market and the expectations of your target audience, QB Agency specialists are ready to handle the task.