Yandex’s ADFOX Acquisition Signals Movement For RTB In Russia

Yandex AdFoxEarly in September, Russian search engine Yandex acquired ad tech company ADFOX, generating a bit of buzz around the relatively early stage programmatic buying market in Russia.

Yandex only entered the RTB market in 2012 and ADFOX, a Moscow-based sell-side platform, was originally founded in 2005 but also introduced its RTB offerings in 2012.

“We expect the deal with ADFOX will let us extend our ad network coverage and the number of clicks and impressions for our advertisers,” Vladimir Isaev, head of international communications for Yandex, told AdExchanger in an email. “We now have the service and technology to work with premium publishers, or those who have their own ad sales teams. We didn’t have that kind of solution in our commercial services line before that.

ADFOX has contracts with 12 of the top 20 Russian media holdings with online properties, according to the companies.

The ADFOX team will join Yandex’s advertising technologies group, and Boris Omelnitskiy, ADFOX’s chief development officer, told AdExchanger the company will continue to retain its independence for a while, with no changes for clients.

“At ADFOX we understood further development of the company relies on several important technologies and data, including DMP and exclusive sets of data for ads targeting,” Omelnitskiy added. “We had three options to get what we need: We can create it ourselves, we can buy a license from an external supplier or we can partner with a strong player, like Yandex. The third option managed to become the best for us and for Yandex, who was thinking about technology for publishers.”

Over time, ADFOX publisher clients will gain access to Yandex’s ad capabilities, including its Crypta ad-targeting technology and revenue optimization courtesy of Yandex RTB and Yandex.Direct, the companies said in a press release.

Others in the industry see this as a step forward for the Russian programmatic market.

“RTB has a small share [in Russia] and is still developing, but very slowly,” Vladimir Klimontovich, CTO and founder of Russian DSP GetIntent, told AdExchanger. “We don’t have that many exits or many VC-funded companies. [Yandex/ADFOX] is a nice thing for the Russian market because it’s an exit. Eventually, the ad tech space here will get more VC money and attention.”

Dmitry Cheklov, the CEO of Russian DSP and trading desk Targetix, agreed: “It is a good signal to young companies and startups that it is a good market and in the future, big companies can come and buy them. Big holdings are going to buy controlling stakes in young companies and we’re seeing it already.”

But Klimontovich and Michael Balakin, managing director for Sociomantic Russia, both warned that Yandex, which is known for its strict standards and regulations for advertising, may change the way ADFOX works down the line.

We work with both of them and only challenge I see for us is, in the long term, ADFOX will adopt all of Yandex’s policies and they are quite strict,” Balakin said. “Yandex is famous about the way they work with dynamic creatives: they want to moderate every image they show, which is additional work for us to comply with these requirements.”

But he added, “For us, we have solved it with Yandex, and we’ll solve it with ADFOX as well.”

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