Internet Advertising Beneficiaries: Top Distributors Secure Major Shares
Fresh Take:
The Russian Ministry of Digital Development is poised to funnel funds from a 3% tax on online advertising revenues towards select digital resources, according to Forbes. The potential recipients of this funding include big shots like Yandex.ru, 2GIS, VK services (Mail.ru, Dzen, Vk.com, Odnoklassniki, RuStore, VK Video), Rutube, Litres, Fair Label (fairlabel.ru), Gosuslugi portal, Unified Register of Internet Advertising, Specialized Platform for Disclosing Detailed Information about Industry Software Products (russoft.ru), and more. Most of these heavyweights dominate the Russian IT scene and rake in the majority of digital advertising dough.
However, Philipp Danko, the CEO of O2Consulting, advises expanding the list to include smaller digital platforms to prevent monopolization of funds. He also proposes clearer criteria for choosing companies, audits by independent experts, and avoiding overlap with other state support programs to prevent double-dipping. The Russian government will make the final decisions on the inclusion of these resources.
Take note: from April 1, 2025, advertising distributors (including media, bloggers, and ad system operators) will have to shell out 3% of their earnings to the federal budget thanks to amendments to the "On Advertising" law. In the first half of 2024, advertisers dropped over 381 billion rubles on internet promos—a 50% increase compared to the previous year. The Russian internet advertising market is estimated to hit almost 500 billion rubles in 2024, meaning yearly contributions to the treasury could reach a whopping 15 billion rubles.
Due to upcoming changes to federal laws "On Countering Extremist Activity" and "On Advertising," ads won't be able to grace digital platforms deemed undesirable or banned in Russia, starting September 1, 2025, similar to foreign-agent resources.
As we reported earlier on our website, the online advertising market for SMBs jumped 23% in terms of cash inflow in 2024.
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Sources:
- Russian Tax Reforms
- Russian Online Trade Growth
- Eurasian Economic Union VAT Platform
- Popular Russian Streaming Services
I'm not sure if the funds from the 3% tax on online advertising revenues will be wisely invested in technology, considering the potential dominance of big digital platforms and the lack of clarity in the criteria for company selection. Philipp Danko, the CEO of O2Consulting, suggests including smaller digital platforms in the funding list to prevent monopolization, and also proposes audits by independent experts and clearer selection criteria.
