New players in the Russian online ad marketplace are trying to compete with Avito

The market for announcements about the sale and purchase of cars, real estate and job offers is segmented - there are a lot of regional players in it and it is difficult to evaluate it, says Nikolas Dadiani, CEO of Pronto Media. “Suppose that outside Avito they create a market of about another 3 billion rubles, then the total size of the ad market in RuNet in 2015 will be about 12 billion rubles,” suggests Dadiani.

Analysts at Goldman Sachs in their study predict that by 2020 Avito will become the leader of the Russian market in the category general classifieds, which will occupy 98% of the market. But this segment will be the smallest in financial terms: its volume will amount to $ 61 million (about 4.3 billion rubles), while the entire Russian online classification market will grow almost 4 times to 47 billion rubles ($ 667 million), at Goldman Sachs.
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Experts at Goldman Sachs estimate the online real estate ad segment in 2020 at $ 242 million (17 billion rubles), car advertisements and job ads at $ 182 million (about 13 billion rubles) each.

New successes Avito

On August 17, it became known that the revenue of Avito AB, which owns the Russian online ad service Avito.ru and the real estate ad website domofond.ru, increased by 86% and amounted to 2.9 billion rubles ($ 45.6 million). The first was reported by the Swedish investment fund Vostok New Ventures, which is a shareholder of Avito.

At the end of last year, Naspers, a South African media holding, bought 50.5% of Avito, increasing its share to 67.9% from 17.4%. As part of this transaction, the company was valued at $ 2.7 billion, including funds in the accounts of approximately $ 240 million. In December, Avito distributed almost all cash - $ 230 million as dividends among shareholders.



Vostok New Ventures did not participate in the transaction and retained 13.3% in the capital of Avito. The cost of Avito at the end of June was estimated at $ 2.48 billion.

All proceeds are from the Russian site Avito.ru. EBITDA in the second quarter of 2016 amounted to 59.7%, or 1.7 billion rubles ($ 27.2 million), against 50.5%, or 794 million rubles, a year earlier.

The number of page views of the Avito site reached 30 billion, 56% accounted for views from mobile devices.

Last quarter, the company's revenue also grew by 86%, to 2.249 billion rubles.

"Yula"

On August 10, Mail.ru Group for the first time officially announced the development of its own Yula online ad service. This happened 9 months after its actual launch. Yula collects more than 2.5 million users of mobile devices every month. About this edition of "Kommersant" reported representatives of the company. MRG hopes to develop the service at the expense of the previously gained user audience. Therefore, the company is ready to invest large sums in its new project in order to adequately compete with Avito in the future.

"Yula" offers users a way of selling and the possibility of buying goods in the immediate vicinity of the buyer and seller. “We are focusing on the mobile market, because the smartphone is a universal device that helps to photograph, call up and write, and also allows you to determine geolocation, unlike the desktop,” explains Yula project manager Yegor Abramets. “At the same time, mobile is a filter for displaying original photos, since in a personal computer it is much easier to copy someone else’s picture from the site and place it in the advertisement.”

The seller can register in the application through an account on a social network or by a mobile phone number, upload a product photo and fill in a description - and the ad will appear in the feed. The service integrated internal messenger and phone calls that allow you to clarify all the issues and arrange a meeting.

While "Yula" is free for buyers and sellers. “Now we are facing classroom goals,” say the Mail.ru Group, without disclosing statistics on downloaded ads.

A distinctive feature of "Yula" is the display of ads, taking into account the location of the user and his interests, pay attention to the Mail.ru Group. “Yula”, based on the user's geo-location, shows the nearest offers, since the geo-location of the goods is also recorded during the creation of the ad, says Mr. Abramec. According to him, the SDK of social networks allows you to get the socio-demographic characteristics of the user, if he has allowed access. “On the basis of the social program we offer categories relevant to his interests,” he said.



A mobility bet gives a number of competitive advantages - an optimal geolocation offer, which significantly saves searching time, so it is “absolutely justified,” says Run Roman shareholder Andrei Romanenko. “This should have a positive impact on the conversion. The project has every chance of success, given the fact that it belongs to the Mail.ru Group and its large user audience, because the classifier in the company's product line was the missing link, ”he believes. According to TNS, in June, the cumulative audience of projects included in the Mail.ru Group amounted to 56.1 million people.

While the undisputed leader in the Russian market is Avito online klassifayd. But at the same time, Avito is also a positive example for the Russian Internet market. In the fall of 2015, the company was valued at $ 2.7 billion as part of a deal to buy a 50.5% stake in the company by Naspers holding. This is about half the total capitalization of the MRG. Naspers is also a shareholder of Mail.ru Group.

The first version of the application "Yula" was launched on October 15, 2015, follows from the message of the company. According to a source in the market, MRG actively used the resources of its Odnoklassniki and VKontakte networks to attract an audience for a new service. Despite this, “Yula” lags behind Avito by almost 10 times, according to Avito data . The latter, citing data from the Public Opinion Foundation, claims that its audience is 20 million people.

Yandex.Vertical

In January 2016, Yandex allocated two departments into separate structures, bringing him non-advertising income, Yandex.Taxi and Yandex.Vertical ad service. The provision of services will help diversify risks and reduce the advertising share in the revenue structure of Yandex, which now amounts to almost 99%.

Yandex.Vertical includes all Yandex ad services - Avto.ru, Yandex.Realty, Yandex.Rabota and Yandex.Travel. Yandex.Vertikali plans to compete with the leader of the Russian market Avito.

This is what Anton Zabanny, General Director of the Yandex.Vertical service, told RBC about this:

In 2010, the aggregation services Yandex.Avto and Yandex.Realty opened. Their goal was to “dust out” all the ads on the Internet inward and give them a convenient search. Thus, the partners received traffic, and we monetized through advertising. Now we are gradually leaving this model - the market is changing, other formats are becoming interesting to its participants.

With the purchase of “Avto.ru,” we have left the previous model altogether: we do not distribute traffic, but buyers and calls, and no longer aggregate ads. With “Yandex.Real Estate” the same story: originally the service was an ad aggregator, but in December 2014 we started receiving ads directly. True, with this approach there are a lot of problems, but we solve them.

The key is the quality of information. You know, in general, everything that we do is very uncomfortable for people. Let's say you want to buy a car. It would seem that buying a new car is a more comfortable scenario than trying to find a good used car. However, having decided on the brand, you will not be able to see anywhere which cars are now available in salons. We'll have to go around these salons, to communicate with the manager, who will busily read out the list of options for each car, without naming the price.

With used cars still worse. There are ads that seem to be about some objects from the physical world, but how true they are is generally not clear to anyone. We want this opacity, this chaos, to eliminate. We do not want to be just bulletin boards, we want to become an objective means of choice.

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Nevertheless, while Avito is among the most popular sites of the RuNet. However, after the introduction of paid ads on this service, the situation may change to some extent.

PS

By the end of 2015, the monthly audience of Runet reached 83 million people - so many Russians over the age of 12 used the Internet every month. According to the Public Opinion Foundation, penetration was 67%; TNS group recorded 68%. The million-plus cities have reached the ceiling, here the audience has almost ceased to increase, follows from the study of “Yandex”.

On average, about 13 different sites on a smartphone and 27 on a desktop are viewed from a single device per week. Yandex managed to identify 28 services that are demanded by users of the Runet, regardless of geography. They account for a third of page views from each city.

The most popular sites are the VKontakte social network, Avito online classifier, Mail.ru portal, Odnoklassniki social network, YouTube video hosting, and also the Chinese online Aliexpress store.