A third of entrepreneurs refused to comply with the law on advertising labeling

Why the new requirements for six months did not work in full mode

More than a third of entrepreneurs were not ready to label advertising on the Internet

Every third entrepreneur refuses to label ads on the Web, citing the absence of fines. Market participants complain about technical difficulties, and bloggers are the slowest to get used to new requirements

More than a third of Russian entrepreneurs in the segment of small and medium-sized businesses refuse to label advertising on the Internet to the new requirements of the law. This conclusion was made by specialists of the Kokos Group, working in the field of Internet marketing (the results of the study are at the disposal of RBC). For example, 37% of owners of their own businesses reported that they would no longer be required to label ads before the introduction of fines by Roskomnadzor and the Federal Antimonopoly Service (FAS).

As considered

The Kokos Group study was conducted by the method of automated online questionnaires, which were attended by 100 thousand representatives of SMB segment companies - that is, small and medium-sized businesses. The survey was conducted from 1 to 24 March 2023. According to Kokoc Group's own estimate, companies in the segment of small and medium-sized businesses account for about 50% of all advertisers on the Internet.

Kokoc Group has been in the advertising market since 2004 and unites more than 20 agencies and services (the Kokoc website itself, ArrowMedia, MediaGuru, etc.). Among their clients are the PIK development group, the Ozon marketplace, and the Tele2 operator.

Only 17% of companies, as the survey showed, decide on the issue of labeling online advertising on their own and allocate an individual employee for this. 42% of respondents said they had to turn to third-party experts or hire consultants. Another 4% believe that only specialized advertising services should deal with labeling.

The Kokos Group survey also showed that almost one in ten entrepreneurs is not aware of the new rules for regulating online advertising at all - this answer was given by 9% of the study participants. Another 5%, although aware of the amendments to the legislation, do not understand their essence.

How and why a business should label online advertising

The idea to create a system of total accounting of absolutely all advertising published on the Internet appeared in May 2021: then the corresponding amendments to the law "On Advertising" were made by the deputy from the LDPR faction Sergey Zhigarev. The profile department - Roskomnadzor - supported the initiative, believing that it would help create "transparent and fair relations between participants in the online advertising market." The Ministry of Digital Development also spoke in favor of the innovations, calling “a certain formalization of processes on the Internet” an urgent task. The amendments were adopted in the summer of the same year but entered into force only in September 2022.

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The essence of the innovations is that now all participants in the process of distributing advertising creatives (that is, each advertising message, be it a banner, video, or even a story on a social network) - advertisers, intermediary agencies, and distribution sites - must transfer to Roskomnadzor all information about such creatives. This includes information about the customer, the form and methods of distribution, the volume and distribution of impressions, as well as information about the contract between the advertiser and the distributor (including price, timing, and performance information), the cost of one impression, and target audience parameters.

Initially, it was assumed that data could be transferred directly to the department, but in the final version of the bill, only the opportunity remained to do this through special advertising data operators (ADD) - intermediaries who, on their own terms, collect, process and transfer the necessary information to the unified register of online advertising ( ERIR).

ORD are selected by Roskomnadzor. Now this activity is approved for seven companies: Yandex, Development Lab (Sberbank), VK, Ozon, MediaScout (MTS), First ORD (VimpelCom), and ORD-A (analytical AmberData platform). They are engaged in the transfer of information about advertising on different conditions, some provide services for a fee. This aspect of the operation of the ORD is not regulated by law.

According to the new requirements, each creative on the Internet is now assigned a special identifier - a token, with which the authorities will be able to track ads. In addition to the identifier, now any, even native, advertising must be accompanied by the “advertising” mark and a reference to the customer.

Despite the support of the authorities, the new rules have drawn criticism from market participants, especially small and medium-sized businesses - the main advertisers on the Internet. Thus, the opponents of the amendments argued their position by the presence of a large number of small Internet resources, which are virtually impossible to trace. In addition, the bill, according to critics, did not take into account the global nature of the modern advertising market, in which an advertiser can launch his campaigns from the headquarters at once to the whole world.

How analysts estimate the volume of online advertising

Since 2018, the Internet has become the largest advertising distribution segment by revenue. At the end of 2022, the total volume of the advertising market in Russia, excluding TV advertising, amounted to 392 billion rubles. Of these, almost 83% - 324.9 billion rubles. - makes up the Internet. In 2021, when the entire advertising market in Russia (including television) was 578 billion rubles, the Internet accounted for more than half - 313.8 billion rubles or 54%. For comparison: it was in second place and estimated at 197.3 billion rubles. television advertising accounted for a third of the market.

How the law is enforced six months after entry into force

Even though the requirements for mandatory labeling of online advertising were adopted back in 2021 and have been in force for six months, there is still no punishment for refusing to comply with them. Roskomnadzor and the Federal Antimonopoly Service, which promised to introduce fines from March 1, 2023, have not done so. Sergei Uchitel, a partner at the Pen & Paper Bar Association, confirms that there is no practice of holding them accountable for violating the new requirements. So far, according to the interlocutor of RBC, the refusal to label can only lead to "special attention from Roskomnadzor."

At the request of RBC, Roskomnadzor explained that a significant part of the Internet advertising market participants marks and transmits the necessary information to the ERIR. According to the agency, in six months, information about 15 billion creatives worth a total of 70 billion rubles was uploaded to the system. The representative of Roskomnadzor also announced that shortly administrative liability for market participants would be introduced for violation of the requirements of the law on labeling advertising on the Internet, but did not specify the details. RBC sent a request to the FAS press service.

The press service of MTS (the company not only owns its own operating division but is also one of the top three advertisers) clarified that, according to its estimates, a “significant part” of advertising agencies began to fulfill the requirements of the law. But as for the distributors of advertising, among them, the proportion of those who began to submit information to the ERIR is significantly lower. “Some companies that do not yet register creatives in ERIR will delay the decision until Roskomnadzor introduces fines for non-compliance with the requirements of the law,” MTS believes. At the moment, the client base of its ORD operator is "several thousand organizations and continues to grow."

A spokesman for VimpelCom (Beeline brand), which also owns its own ORD, argues that "the unwillingness of small players to register ads" is noted, "extremely rarely." VK said that “hundreds of thousands of creatives are already tagged” through their operator, and training webinars are being held for clients to simplify tagging. Yandex did not answer questions about the number of clients of their ORD and the specifics of interaction with the business, specifying only that all advertising was placed using Yandex. Direct (a service for placing contextual advertising) is automatically marked.

Why businesses don't want to label ads

Among those who express active dissatisfaction with the need to label ads are bloggers. Against the backdrop of these requirements, about 20% of bloggers even raised their prices for placement. Two representatives of large blogging agencies told RBC that, in addition to financial costs for the technical design of marking and transferring information to ERIR, influencers are unhappy that, due to the requirements to mark creatives, they have lost part of the orders for the so-called native advertising (a format when a blogger beats a demonstration of this or that product or service in his author's style, presents the benefits of the product unobtrusively and gives, as it were, his own assessment of its characteristics).

A representative of the platform for working with bloggers GetBlogger notes that the problem is not so much in the reluctance to label ads, but in the shortcomings of the procedure itself and the unpreparedness of the system to accept the amount of data that bloggers have. “We estimate the total volume of advertising publications from bloggers that have been tagged and reported to the RDO to be no more than 10% of the market,” GetBlogger notes. “This is due to various factors, the most common case that we encountered was when the marking was implemented, but for technical reasons, the process of transferring reporting data was not completed.”

Andrey Tertichnikov, general director of the M-Social web development agency, speaks of similar difficulties: “The inconvenience is that in the personal accounts of the ORD, you often have to manually enter data for each placement and for each creative, and this requires a huge amount of time.”

The mechanisms for labeling ads and monitoring the implementation of the law “complicate the process of launching advertising campaigns too much”, so they need to be adjusted, Evgeny Chuvashov, digital director of the Igronik advertising group, calls. “For clients, it is not the presence or absence of advertising labeling that is important, but the result that this advertising brings,” explains Chuvashov. “And since the labeling of the ad doesn’t affect its effectiveness, customers are not eager to dive into the ORD story.”