FOCUS: Internet ads top TV by budget, seen to keep reigning JulDec - Telecommunications - PRIME Business News Agency - All News Politics Economy Business Wire Financial Wire Oil Gas Chemical Industry Power Industry Metals Mining Pulp Paper Agro Commodities Transport Automobile Construction Real Estate Telecommunications Engineering Hi-Tech Consumer Goods Retail Calendar Our Features Interviews Opinions Press Releases

FOCUS: Internet ads top TV by budget, seen to keep reigning JulDec

By Yekaterina Yezhova

MOSCOW, Sep 3 (PRIME) -- A steadfast growth of investment in online promotion pushed Russias Internet advertising market by 21% on the year to over 90 billion rubles in JanuaryJune, outperforming TV advertising for the first time. Internet behemoths Yandex and Mail.Ru Group are the main beneficiaries, analysts said, adding that while Yandex is well-rooted in advertising, Mail.Ru Group is more diversified.

The Internet has for the first time topped the TV segment slightly by the volume of advertising. The event had been long expected as TV ads grew by 13% and Internet ads by 21%. At that, positions of these two media segments are rather close: each of them has slightly more than 41% of the advertising market, said Sergei Veselov, co-chairman of the expert committee at the Russian Association of Communication Agencies (RACA).

The RACA calculated that the Internet ads market increased 21% on the year to 90.591.5 billion rubles in JanuaryJune, value-added tax excluded. The TV segment rose 13% to 9091 billion rubles, and the total advertising market also gained 13% to 218220 billion rubles.

IAB Russia calculated that the online advertising market spiked 23.5% to 92.5 billion rubles in the first half of the year.

Group of companies Finam analyst Leonid Delitsyn said, Search or contextual advertisements are the most popular among advertisers, accounting for 43% of the market, and banner advertisements, including multi-media, account for 34%, special projects for 13%, and video for 10%.

Search advertisements are available for hundreds of thousands of advertisers, firms of any scale, up to individual entrepreneurs. It can be easily launched, tested, and it is seen by an active user looking for something, he told PRIME.

Yandex and Mail.Ru Group

The winner-takes-it-all principle works in the Internet. The major floors are the markets biggest players. These are search engines Yandex and Google, social networks VKontakte, Odnoklassniki, Facebook, email service Mail.Ru, video service YouTube, and media holding Rambler. Instagram is a rising star, Delitsyn said.

Proceeds from online advertisements generated 84% of Yandexs total revenue in JanuaryJune. The companys total online advertising revenue rose 17% to 47.322 billion rubles, while its total revenue grew 32% to 56.245 billion rubles.

Mail.Ru Groups revenue depended on online advertisements by 41%. Its online advertising revenue jumped 38.9% to 13.860 billion rubles, and the companys total revenue rose 29% to 33.577 billion rubles. We expect that advertising and games revenues will continue to show good growth in JulyDecember, Mail.Ru Groups management said earlier in a statement. The company owns popular social networks VKontakte and Odnoklassniki.

Analysts said that Yandex, which is heavily dependent on online advertising, is more vulnerable than more diversified Mail.Ru Group, whose revenue is almost equally divided between advertising, social networks, and multi-player games.

Delitsyn at Finam said, We may point out at how actively Yandex had promoted its taxi project, partly to persuade investors that the company was capable of entering other markets. However, Yandexs position on the advertising market is very solid, and only Google could pose a threat as the developer of operating system Android that actually shapes the market of advertisements on smartphones.

Market prospects

Dependence on online advertisements will stay in the foreseeable future unless users agree to pay for the services they now get for free, like search, e-mail, and social networks, Delitsyn told PRIME.

Growth rates of the Internet advertising market will persist, and we expect it to rise 2022% on the year in JulyDecember. The victory over TV would be most likely of a symbolic character, which would be enough for online advertising, which has been explaining its rise by advertisers money flowing from TV into the Web, he said.

But if TV has nothing left, there will be nothing to flow. In this case, Internet advertising will get volumes, but no growth, and advertisement purchasers would be choosier. The optimal situation is when online advertising bites 35% off the TV segment every year.

(68.0447 rubles U.S. $1)

End

03.09.2018 10:08
 
 
Share |
To report an error select text and press Ctrl+Enter
 
 
Central Bank Official Rate
1W 1M 1Y
USD
EUR 79.1749 -0.1846 19 sep
USD 67.7519 -0.4439 19 sep
Stock Market Indices
1D 1W 1M 1Y
MICEX
rtsi 1123.03 +2.14 18:50 18 sep
micex 2402.58 +1.21 18:50 18 sep
Stock Quotes in RUR
1D 1W 1M 1Y
GAZP
gazp 157.08 +1.04 18:49 18 sep
lkoh 4685.00 +1.17 18:48 18 sep
rosn 440.40 -0.20 18:49 18 sep
sber 191.65 +1.88 18:49 18 sep
MICEX Ruble Trading
1D 1W 1M 1Y
USDTD
EURTD 79.1900 -0.2175 14:59 18 sep
USDTD 68.0075 -0.0025 17:44 18 sep