Home International Local DSP HubRus Sees Growth In RTB, Video in Russia

Local DSP HubRus Sees Growth In RTB, Video in Russia

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Oleg Image HubRusThis is part of a series on companies advancing programmatic buying in Russia. Read our recent Q&As with Yandex, ADFOX and AiData.

Many international DSPs follow and learn from companies in more mature programmatic markets. But the team behind HubRus, a Moscow-based DSP founded in 2012, admits that the decision to introduce a local DSP to Russia came after attending AdTech in New York.

“It took about a year to create a prototype of our product,” Oleg Nazarov Bruni, Development Director for HubRus, told AdExchanger via email. “At that time, we worked with several worldwide CPA networks monetizing Russian and American offers through our affiliate networks. We gained great experience in advertising campaigns management, and realized that it was right time to create a local DSP.”

AdExchanger exchanged emails with Bruni about what the company offers, the market for DSPs in Russia and plans for expansion in this growing market.

AdExchanger: Tell me about HubRus. What does the company offer in the programmatic and RTB space?

OLEG NAZAROV BRUNI: More than two years have passed since we started testing and now HubRus is positioned as a local classic DSP platform for advertising budget optimization in all three channels: mobile, video, display. We provide services for traffic and audiences purchasing from different publishers via RTB technology. One hundred percent of our work is in the RTB space.

The company provides two major types of service: advertising campaign management for agencies and advertisers, and self-service for selected clients who have deep expertise in RTB. Our main products and services are access to traffic available on RTB exchanges; autotargeting, pretargeting and retargeting; dynamic creative; and video ad impressions.

HubRus is now connected to all the major SSPs and we created a unique user Interface for our self-service clients, where every two weeks we release new targeting opportunities. This spring, we also brought in more than ten data providers to the user interface and introduced a new billing system.

We provide our clients with an opportunity to test socio-demographic data from different DMPs and to choose the most efficient data for their campaigns. We have created a constructor of audiences inside our User Interface, which enables combining and identifying the desired audience for the client.

Who are your competitors and how does HubRus distinguish itself?

At the moment, there are a lot of DSP platforms operating with Russian traffic. Only few of them have expertise and well-developed technology.

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Communicating with our clients, we see that our expertise and technological solution gives us the opportunity to provide our clients with services and advertising campaigns efficiency at a very high level, which is competitive even with major foreign players, who spent significantly more time and money on their technologies.

Thus, we consider that our main advantages vs. competitors are the following: the broadest Russian advertising inventory available on the market (we are integrated with c. 15  local SSPs in addition to such major players as Google and Yandex), the deepest expertise of our team in programmatic buying in Russia and the most comprehensive and instrumental UI for the customers.

What is the programmatic space like in Russia right now? Is it still a small percentage of advertising or is it growing?

Programmatic buying took around 5% share in Russian digital display advertising market and totaled around 1.2 billion rubles in 2013 (approximately $35.3 million*). We consider it in an early stage of market development and expect the RTB segment to expand its share by 5 to 7 percentage points per year. According to our forecasts, the market value will grow with 78% CAGR and will reach 12 billion rubles by 2017 ($353 million).

What are the biggest challenges to programmatic growth right now? 

We see two major problems that the Russian RTB market faces at the moment. The first is shortage of third party data. Currently, there is no mature user data market in Russia. Generally most of campaigns are targeted on first party data only. On the other side, as there is no market for data, major market players who have such data are reluctant to invest in data technologies, as they don’t see significant monetization potential.

The second problem is lack of expertise in RTB technology. Agencies, as well as advertisers, have little to no in-house expertise in RTB.

Have video or mobile programmatic started to take off? Or is it still too early in Russia?

At the moment we see huge demand for video programmatic; it is becoming more popular among customers who do not purchase TV inventory but are willing to try online video. Video retargeting shows very good results in terms of efficiency. Recently we launched Videohub, a service for programmatic buying of video advertising.

Do you work with international companies trying to launch in Russia or is it still mostly domestic players?

The Russian display market is ranked 4th in Europe by its value. Of course foreign players are quite interested in expanding their sales in Russia. Criteo and Sociomantic have already opened offices in Moscow. Some other major players such as MediaMath and AppNexus are considering an opportunity to do that as well.

However, foreign players are often too “programmatic” and pay significantly less attention to customer service, which is especially important in this market, which has poor general knowledge of the product and services that programmatic offers. Also the current geopolitical situation delays the expansion of major foreign players into the Russian market. This gives us an extra opportunity to continue our development on the back of significant market growth and relatively low level of competition. Thus, we plan to grow our market share by 2-3x in 2014 and continue growth in 2015.

Going back to HubRus, can you talk about funding? Who are your funders and how many rounds have you done?

We received funding from Paradigm Investments, a Russia based PE/VC fund. We have done seed round and Series A financing with Paradigm and we are currently in the process of signing Series B with another fund.

What are your goals for the company over the next year to 18 months?

We have a number of challenging goals for the next year. We plan to develop sales of video programmatic buying via the recently-launched Videohub platform.

We intend to set up a new promising product: direct programmatic buying, which allows targeted purchasing directly from a publisher without an auction and at a fixed price. We see huge demand for the product from our clients and plan to launch it this autumn.

 

* Calculations done using XE.com, as of July 10, 2014.

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