Can you give some overview on the recent trends in the Russian market?

The Russian digital advertising market continues its yearly double-digit expansion, even as the underlying increase in internet population has gradually decelerated, hovering now around 70% audience penetration.

What’s fuelling this is continued expansion—to the tune of over 30% per year—of search marketing, which is now twice the size of the display market in Russia. Increasing regional enterprise and small-business search spend play a key role here, as does the ever-increasing interest in digital performance marketing to drive direct business results. Some of this interest has been driven by a rapid increase in ecommerce in Russia. Issues of payments (in a country with limited credit card penetration) and logistics had depressed Russian ecommerce, but there has been rapid catch-up as these issues have been overcome.

Display growth is also robust—over 20% per year. In this area we are now seeing the introduction of new audience targeting opportunities, albeit usually within various publisher verticals. Online video is also expanding rapidly from a relatively small base, and clearly has a strong role to play particularly as an efficient way for big marketers to extend TV campaign reach with the light TV-viewing audiences. This is an important topic, as TV continues to dominate all media spend in Russia, although digital now makes up a healthy second place.

Mobile internet usage continues growing, with over 30% (almost 40% in big cities) audience penetration. Essentially, three-quarters of mobile internet activity comes via tablets or smartphones, which clearly presents interesting engagement opportunities for advertisers. However, mobile ad spend (as in many markets) has a very small share right now.

Programmatic is on everybody’s agenda. All major publishers have introduced programmatic sales options, or are actively working on developing them. That said, the actual RTB spend is still quite small right now, representing at best only a few percentage points of the overall market. Of course rapid growth through 2014 is expected, and this, of course, plays a key role in our expansion plans.

Which inventory sources are you buying from most? ADX? Yandex?

We are currently in the process of setting up our links. Clearly ADX and Yandex will have a critical role to play. There are a number of additional local players that can provide interesting inventory, e.g., AdFox, Soloway, Kavanga and others. We are exploring all options right now.

Are there any expectations on how big the market in Russia might actually become, in terms of growth? What impact that is likely to have on digital spend?

Estimates are for RTB in Russia to grow from about 3% of the market possibly up to 15%+ of the market over the next three years. I don’t see many reasons for Russia not to get to the current German share of spend levels in this timeframe. There are some very talented and dedicated (and large) market players here who are looking very aggressively at this issue now. As to impact on the overall digital spend, that is still a little unclear. From our perspective, however, we know that digital performance marketing sits squarely in the part of the internet advertising market that is generating the largest growth, and that’s where QUISMA plays.

In terms of positioning, how does QUISMA service clients in the region? Are you positioned as an internal resource for WPP agencies? Or do you have direct clients as well?

We are a performance marketing agency that leverages our proprietary technology platform to drive best results for our clients. We have a natural base of potential clients who are currently working with the GroupM agencies in Russia and we will provide services through the GroupM agencies in this case, but we also expect to reach into new clients that our media agency colleagues aren’t working with yet. I would expect those clients to include ecommerce companies and other direct players who have a natural affinity for our offering.

How are you different from Xaxis? How do you differentiate? DR or Brand?

Broadly speaking, Xaxis is focussed on audiences, QUISMA on outcomes. Yes, generally that translates to brand spend with Xaxis and DR with QUISMA. That’s probably a bit limiting a definition though—QUISMA focuses on driving conversions, however those are defined (as long as they are measurable), and thus could have a role in a variety of campaigns.

QUISMA have built some proprietary tech. How has a proprietary bidder helped you stand out in the market?

It’s not really just a question of a proprietary bidder; QUISMA has a proprietary holistic tech platform (our QUISMA Media Platform, or QMP) that integrates a number of different pieces including the bidder, DCO, analytics and more. This allows us to achieve better campaign performance based on having better insights in real time as to what is actually working to drive conversions for our clients, and deliver it in a seamless way.

Do you have access to any proprietary first-party or third-party data?

Data is an evolving area in the Russian internet ecosystem. It is not like the US where there is an established healthy third-party data market. As a part of GroupM, we have strong relationships with the major publishers, and we are very much focused on being at the forefront of leveraging the best opportunities in this area as they emerge.