String of Acquisitions Aid Burgeoning Russian Ad Market

A recent flurry of Russian acquisitions by major digital ad players suggests that the Eastern-European ad market is booming. Google, WPP, and Aegis have all made investments there in the past year, with a number of other firms opening offices in the region, hoping to cash in on the growing market.

ComScore reported in August that Russia now has the fastest growing online population in Europe, rising 27 percent year-on-year between ’07 and ’08. What’s more, it estimates that only 14 percent of the population are currently online, suggesting this growth is set to continue.

In its 2008 forecasts, Carat predicted that Russia would experience more ad spend growth than any other European market, up 23 percent year on year, and following a 27 percent growth in 2007. In addition, estimates from MindShare Interaction suggest that the market’s value reached $369 million in 2007, and would grow to over $600 million by year end 2008.

The potential of the Russian market has not gone unnoticed however, and major players are snapping up digital firms left right and centre.

Aegis announced in June that it was purchasing AdWatch, a full service agency, claiming the acquisition would crown it the premier digital player in Russia. AdWatch was incorporated into the Isobar nework.

WPP was hot on Aegis’ heels however, buying a majority stake in Alite Ltd in July – a digital agency that trades under the name of Actis and provides online marketing strategy, design and development for clients throughout Eastern Europe. The firm, with clients including the likes of Microsoft and MTV, was folded into WPP’s Wunderman network. In addition, WPP purchased Czech ad services company Advertures in July, citing a goal of growing its offering in fast developing regions.

Perhaps most significantly however, Google announced it was acquiring Russian contextual ad network Begun for a fee of $140 million at the end of July. Begun’s keyword-targeted network of over 140,000 sites is expected to incorporate a range of Google’s ad formats, targeting methods, and other monetization services.

Speaking with ClickZ News at the time, a Google spokesperson said, “We consider Russia an important country and are committed to it.”