Page 22 - bne_Magazine_April_2018

22 I Companies & Markets bne April 2018
bne:FinTech
Mail.Ru Group to accept bitcoin in payments for ads
Adrien Henni in Moscow
Leading Russian online firm and LSE-listed Mail.ru Group announced that its ad platform myTarget began accepting Bitcoin (BTC) and Bitcoin cash (BCH) as payment means for running ads on the group’s properties, reports East-West Digital News (EWDN).
These properties include Russia’s top social networks Vkontakte (VK) and Onoklassniki (OK) as well as two dozens of online resources related to the Mail.ru and AM.ru portals. In January, according to Mediascope/TNS, the total audience of these properties exceeded 51mn desktop users aged 12-64 across Russia (not taking into account mobile-only users and users from outside Russia).
The move also concerns MyTarget’s ad network. Even publishers who already signed up with this network will receive the option to get paid in cryptocurrency, said the group.
Last year Mail.Ru Group’s advertising revenues amounted to RUB23.8bn, or around $412mn, up 28.9% from 2016.
Mail.ru group is partnering with BitPay, a global bitcoin payment processor, to convert cryptocurrencies into cash. For the moment, Mail.Ru Group will not accept other cryptocurrencies, such as ethers, “because BitPay doesn’t process them,” the group’s press service told us. “But BitPay will take the exposure.”
The birth of a market
Mail.Ru Group’s move will not remain unnoticed in the advertising industry, which will inevitably be affected by the irruption of cryptocurrencies.
Analysts at the Russian startup AB-Chain say that digital advertising budgets in cryptocurrency could reach anything between $16bn and $32bn globally by 2021, which would account for a non negligible fraction of total global digital advertising expenditures, $375bn that same year according to eMarketer’s predictions.
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AB-Chain’s analysts based their calculations on the amounts already or expectedly raised by start-ups through ICOs; then they tried to estimate how much of this money would go to digital advertising, having studied the post ICO plans of some 30 companies, and extrapolating from them.
When asked about cryptocurrency ad budgets putting aside the specific case of ICOs, AB-Chain’s founder Vladimir Dyakov
“Mail.ru group is partnering with BitPay, a global bitcoin payment processor, to convert cryptocurrencies into cash”
told me that cryptocurrencies are in the process of becoming “a rather common payment means” to remunerate freelancers and small businesses.”
“Thus, when marketing their services, freelancers and SMBs will have cryptocurrency to spend, fuelling the development of this new market,” Dyakov believes.
One must admit that settlements in cryptocurrency are much easier, quicker and less costly than traditional payment means – and even PayPal, where transfers are immediate but commission fees are high for businesses (4.7% in the case of a transaction our company made recently).
“The advantages of paying in cryptocurrency are even more compelling when talking about cross-border settlements, so cryptocurrencies bound to gain more and more importance due to globalization,” added Dyakov.
“So, the question is not whether or not a part of the ad market will switch to cryptocurrencies, but when this process will reach significant levels – and how advertisers, agencies, ad