BidMind Blog

How the war in Ukraine is impacting the advertising industry

Russia’s full-scale invasion of Ukraine started five months ago. We will look at what effect the war has had on the advertising industry, how business has reacted, and what lessons can be drawn from this experience.

A considerable portion of the software and technology the world uses is designed, built, and managed by developers and engineers in Ukraine. According to CNBC, WhatsApp, Gitlab, Solana, and Grammarly were founded or co-founded by Ukrainians. Giants like Google, Samsung, and Amazon all have large R&D offices throughout Ukraine. This country is home to over 210 AdTech and MarTech companies, accounting for $400M in investments. Brands like Admixer, Sigma Software Group, Ahrefs, and Serpstat – all international companies providing global AdTech solutions – have their roots and employees in Ukraine. As such, the personnel relocation caused by the war has disrupted the daily operations of many software and AdTech platforms.

Advertising and information warfare

Information and propaganda play a significant role both domestically in Russia and Ukraine, and in the international arena. In the early weeks of the war, the Kremlin curbed Facebook access within Russia and ordered Google to “restrict ads it said contained inaccurate information about the casualties of Russian forces.”

The private sector also reacted. In a bid to prevent Russian content channels from monetizing on war-related content, Meta paused ads targeting people in Russia, banned ads from Russian-backed media, and prevented advertisers based in Russia from launching or managing ad campaigns on the platform. Furthermore, ads linking to two well-known Kremlin-sponsored sites, Russia Today (RT) and Sputnik, were hidden from other content channels.

Meta and Instagram are also coordinating efforts to shut down disinformation networks on their platform targeting people in Ukraine. Meta is also prioritizing in-platform ads for nonprofit organizations supporting Ukraine, thus making it easier for people to find and donate to these efforts.

In response to growing concerns about advertising funding Russian-backed media, Google stopped search and ad sales within Russia – thwarting more than 8 million ads related to the war in Ukraine. After Russian authorities seized Google’s subsidiary within Russia, the Russian office will no longer function and is filing for bankruptcy.

YouTube continues to offer streaming services within Russia, but has suspended monetization of Russian channels and has also blocked Russian state-backed channels entirely.

AdTech and Advertising Firms

AdTech and Advertising Firms

Early into the conflict, the World Federation of Advertisers (WFA) released guidance for media buyers and sellers to reevaluate programmatic spending to ensure their ad budgets don’t help spread propaganda.

Some companies decided to go on the offensive and launched their own digital advertising campaigns to fight pro-aggression narratives. Using targeted digital advertising, AdTech professionals are bypassing Russian media censors and delivering news from the outside world to Russian civilians through ads on particular sites. The Good-Loop initiative headed by digital marketing expert Rob Blackie served Russian audiences with over 2 million news ad impressions and 42,000 clicks.

Since the overwhelming majority of western companies unanimously supported or remained neutral toward Ukraine, local ad firms found a unique opportunity that also impacted AdTech. Ukrainian advertising agency Banda, in partnership with other local agencies and the Ukrainian authorities, launched the “Bravery to be Ukraine” campaign, which gained over 40 million out-of-home impressions in more than 140 cities across the US, Canada, European states, and other regions. According to Posterscope Ukraine, this was the most expensive Out of Home (OOT) advertising campaign that Ukraine has ever had.

The ad market in Russia

Over 1,000 international companies have publicly pledged to limit operations in Russia, according to the Yale School of Management. Amazon, for instance, stopped shipments to Russia and has ceased Prime Video streaming from being accessible in Russia. Streaming platforms Discovery and Netflix have also since suspended services, with Netflix losing 700,000 accounts in the process.

Furthermore, while these companies withdrew their services, an estimated four million Russians have also left the country, including 70,000 IT professionals.

The volume of the Russian advertising market in 2021 amounted to a historic maximum of 578.3 billion rubles ($8.76 billion), according to data from the Association of Communication Agencies of Russia (ACAR). More than half of this total went through the internet (54%) and TV (34%). BidMind predicts that the volume of Russia’s digital advertising spending in 2022 may fall by 19%. This will happen not only because of decisions to suspend advertising investments from PepsiCo, Procter & Gamble, L’Oreal Groupe, and other big advertisers, but also due to the lack of ad inventory – as giants like Google and Meta shut down their activity.

Final thoughts

The fact that governments got involved with actual ad campaigns related to a conflict shows how instrumental this tool is in a war. AdTech is going to be influential in any conflict as long as the industry can help to promote agendas, inspire people, and shape narratives. Ad agencies, programmatic platforms, MarTech companies, and others should be prepared for the eventuality of conflict even if they don’t operate in the countries directly involved in them.

Not everyone buys jewelry!

About:

An international jewelry company headquartered in the USA, which has been on the market for over 30 years. It specializes in classic mid-price jewelry and develops niche designer kits in limited quantities.

The challenge:

The company has been using programmatic advertising in its marketing strategy for a long time, but wanted to discover advanced targeting of audiences they consider to be their most profitable customers.

The company wanted to cover with a special offer young families without children with incomes above average.

Goals:

  • Gather a narrow specific audience in a short time
  • Set up advertising in web, mobile web channels.

The Solution:

With the help of premium audience supplier partners, BidMind selected men in a particular region who got married 1 to 3 years ago and are looking to buy an above-market car.

The results:

By scaling ads to the audience that brought in the most revenue, the company was able to increase conversion rates and return on investment from ads. We have selected a fairly large audience for more advertising opportunities for testing offers.

An advanced reporting and attribution system made it possible to observe patterns in the increase in the number of visitors to offline stores who saw ads before visiting.

Revenue: +27%

Impressions per month: 35k

BidMind is Now Available in Latin America

BidMind, an omnichannel programmatic advertising platform, announces the expansion of the company’s array of services to the LATAM region, allowing its partners to launch programmatic ad campaigns in South and Central American countries (across mobile, web, audio, DOOH, and CTV channels). Omnichannel approach helps advertisers deliver the right message at the right time by acknowledging consumers’ previous touch-points along the customer journey.

According to American market intelligence, traditional media consumption in Latin America is being displaced by digital. Digital advertising grows steadily at around a 10% pace per year, reaching over US$24bn (£19.76bn) in turnover in 2022. Meanwhile, internet penetration rates in LATAM are at 73% and growing and the video-on-demand industry expands on both subscription-based and ad-based models (with the latter being preferred by 70% of users). Local audiences also seem to prefer using streaming video apps and use a variety of devices for that. In this digital mix, target audiences are spread widely across all the media and advertisers may often struggle to locate their customers.

BidMind offers brands and agencies that work with LATAM audiences a data-driven approach when it comes to targeting. The company prediction algorithms combine first and third-party data to help develop, forecast, and run ad campaigns to reach their business objectives. Over the time BidMind has worked with such advertisers as Kia, Subaru, T-Mobile, Centricia, and SST Media.

“We are excited to bring our digital advertising technology to the LATAM region, a market where we see huge potential. Our goal here is to help marketers reach their customers efficiently via brand-safe environments. We are expecting to work directly with big brands as well as with smaller advertisers on a sustained basis”, said Reid Mitnick, director of sales at BidMind.

This article was originally published on: Exchangewire