Review of the market: why megaproducer of TV advertising has threatened to raise prices

Expensive advertising

National advertising Alliance (NRA), the creation of which was announced in the spring of 2016, unveiled its business policy. The average mediaplace on the TV advertising market in 2017 will amount to 15%. The segment of television advertising has great growth potential and will increase by 10%, according to the presentation, which is available to RBC. The document was presented on October 7 at a private event for representatives of broadcasting companies, major advertising agencies and advertisers.

Growth of 15% will be refund to the price level of not very successful 2014 and looks justified, says CEO Etat Control International Rus (ECI) Dmitry Kuraev. The prices, in his opinion, for different advertisers can grow unevenly. “I would not be surprised if inflation for players from the top 20 will be higher than for small and medium advertisers, because the increase in the already high rates for the latter may indeed be the last straw that will force them to refuse advertising on TV in favor of other tools,” says Kuraev.

However, threatened the loyalty of even the largest advertisers. “We are not planning to increase the budget for TV advertising in accordance with the price increase,” — said the representative of “M. Video” Valery Andreyev.

“This amount of advertising money out of the country, and after this rising prices, the advertising market will shrink,” adds a source RBC in one of the largest Telesecundaria. According to him, the growth in the budget none of the advertisers are not planned and how to respond to such increase, the market does not know.

Higher prices for TV advertising in 2017, said the unwillingness of players to adapt to TV market crisis phenomena in the economy, says associate Professor of the Department of integrated communications, HSE Pavel Rodkin. This is because they believe in the inevitability of commercials and TV in General. “In many ways this is very similar to the behavior of a monopolist who does not consider other media are equal competitors and their capabilities,” says Rodkin.

The alternative, however, is. Respondents RBC experts agree that higher prices for TV advertising will push many advertisers to the Internet, which recently shows a much more enviable growth than television.

Who is behind the National advertising Alliance

National advertising Alliance was created in the largest Russian teleholdings — “the First channel” VGTRK, “Gazprom-Media” and the National media group (NMG). Therefore, it will be the sole seller of advertising on television. Now advertising on TV channels VGTRK NMG and the “First” sells Vi — Russia’s largest advertising seller. In “Gazprom-Media” private sales house.

Internet threat

According to the Association of communication agencies of Russia (ACAR), the volume of advertising on television in the first half of 2016 increased by 17% to 71.8 bln RUB While Internet advertising, according to various estimates, increased by 26-30%, amounting to 63 billion rubles, the Internet was the only advertising channel, which grew in the first half of 2015 — at 12%. TV advertising in the period fell by 19%.

In June 2016, Google, “Yandex”, “Vkontakte” and YouTube Mail.Ru surpassed Russia’s largest TV channels by audience reach aged 12-44 years in large Russian cities (population more than 700 thousand people), wrote “Vedomosti”. The largest coverage monthly audience (people who go on the website or includes a channel at least once per month) Google — 88%, followed by “Yandex” (87,2%) and “Vkontakte” (86%). For comparison, the coverage of the “First channel” — 81,5%. The parameters in the “Russia 1”, the STS and TNT was even less of 79.4, 78.5 per, of 74.5 and 69.1 per cent respectively.

In the NRA are well aware from Internet threats. The share of the 50 biggest TV advertisers in the consumer market of Russia is reduced. If in 2012 they accounted for 13.5% of the market in 2015 and by 10.6%. At the same time these companies reduced their advertising budgets, expenditures on television advertising, with up to 45,0 49,8%, according to the presentation of the NRA. “The decline in sales of large advertisers associated with reduced investment in TV. “Played” with the Internet it recorded an increase of distrust of the Internet-advertising” — to make a clear conclusion the authors of the presentation.

Top Manager of a large communication group, attended the presentation, declined to comment, citing the inconsistency made at the meeting statements.

The Deputy Director of NRA Sergey Koptev, was unavailable for comment.

This position is part of the NRA in relation to Internet advertising rather a deliberate exaggeration, says head of TV and media content J’son & Partners Сonsulting Dmitry Kolesov. But obviously, when “the NRA still TV”, another competitor, in addition to the Internet, in General, the expert adds. In his opinion, “the market of this statement will not be affected, since advertisers are free to decide what channel of communication are effective”.

This is confirmed by their own advertisers. Director of marketing communications of the company “MegaFon” Violetta Zubkov notes that each type of advertisement has its own specific problems, so as TV advertising and Internet advertising remain important to the company. “We are interested in a young and active audience that favorite TV content often looks on the Internet. We don’t want to lose those users and are pleased that the level of mobile Internet usage is growing,” — said Zubkov.

“More than half of our customers start their communication with the company from the website — says Valery Andreeva of “M. Video” — therefore Internet promotion is playing an increasingly important role.” The effectiveness of investments in Internet marketing in the first half of 2016 showed, according to Andreeva, a notable increase compared to the same period last year.

The use of social media data and technologies to predict consumer behavior, allows “catch of the target user at any time and on any device,” says development Director All In One media Tatiana Filimonova. “With regard to analysts on the results of advertising campaigns, now of the Agency, and sites provide data for any point on conversion — contact time with the brand, actions within the banner image, conversion to order, etc.” — says Filimonov. In her opinion, the advertising possibilities of television, by contrast, is almost exhausted, especially when it comes to audience 18-45 years.

In 2017 TV advertising market will grow by 6-8%, estimates Denis Kolesov, noting that “it’s a very serious revision of the share of the Internet.” Thus, according to the expert, the TV will still remain the main media, especially for major advertisers.

According to Paul Rodkina, it is more appropriate to talk about a hybrid form of development of advertising technologies and new approaches. “Obviously, this situation won’t last forever, but at the moment of the radical victory of the Internet or, on the contrary, television talk is premature,” — said the expert.