The Russian advertising industry recorded substantial growth in the last five-year period, although growth slowed from 12.3 percent in 2018 to 6.6 percent in 2019. The industry is expected to achieve strong growth in the coming years, with growth rates accelerating after 2020.

There is a strong interrelationship between GDP (gross domestic product) and advertising. Today, prospects of an economic downturn are forcing companies to cut back on marketing spending. In 2018, the FIFA 2018 World Cup drove the industry. The sporting event held in Russia was a lucrative opportunity for advertising agencies as the companies sought to reach a global audience. Advertising spending was unlikely to attain the same rate of growth in 2019 without an international sporting event.

The Russian advertising industry recorded total revenues of USD7,735.3 million in 2019, representing an average annual growth rate (CAGR) of 11.2 percent between 2015 and 2019.

In Russia, the proliferation of smartphones has led to a shift in the advertising industry towards a more digital area. The average time a person spends on their mobile phone in a single day is around 90 minutes, which is 23 days over the course of a year, making digital advertising a lucrative way to grow. It is estimated about 58.7 percent of the population in Russia owns a smartphone, which is relatively low compared to other European countries. This indicates that mobile advertising still has strong growth potential and is likely to become increasingly lucrative as smartphone ownership increases.

The digital channel has developed into a primary way for advertisers to reach the broadest possible audience. Advertising on social media platforms like Vkontakte (a similar platform to Facebook) and Odnoklassniki has proved fruitful for advertisers who want to appeal to millennials, while advertising on websites and search engines helped improve contact with older internet users. Digital advertising accounted for 40 percent of Russia’s advertising market in 2019.

The food, beverage, human resources, as well as healthcare segments were the most lucrative in 2019 with a total revenue of USD3,480.9 million, representing 45 percent of the industry’s total value. The media and telecommunications segment contributed USD464.1 million in revenue in 2019, representing six percent of the total value of the industry.

Improvements to the quality and reach of broadband access in Russia have continued to foster the growth of digital advertising. The number of people accessing the internet is growing, which has allowed advertising companies to interact and focus on a wider diversity of users.

According to the Association of Russian Communications Agencies (AKAR), outdoor advertising and transit advertising in addition to advertising in cinemas has increased significantly.

Economic output is anticipated to decelerate, with an expected CAGR of 9.1 percent for the 2019-2024 five-year period, pushing the industry to USD11,953.6 million by the end of 2024.

Media planning will become more and more important in the coming years as the identification of the most suitable channel to reach the target group becomes more complex. Traditional advertising will remain important, but digital media will remain the most lucrative channel.

At the time of publication, the widespread outbreak of COVID-19 makes it extremely difficult to predict how the industry will evolve in the coming years. Although the actual impact of COVID-19 is difficult to assess due to the rapidly changing situation, it will undoubtedly have a negative impact on the performance of this industry as companies in several segments reduce their advertising spending.