Russia will overtake Spain to become a Top 5 European ad market in 2009, according to “This Year Next Year: Russia,” a media and marketing forecast from GroupM, which forecasts that media investment will grow 26% in 2007, to $9 billion, and 21% in 2008.
As in China, the main driver in Russia is consumer demand - from finance to cars to personal grooming - and it’s expanding from metropolitan centers into the regions, according to GroupM, which said the main constraint is the supply of television airtime, resulting in airtime price inflation (30% in Russia this year, 15% in China).
Russia’s internet growth does not rely on e-commerce and direct response; advertisers mainly use the internet for branding, according to the report:
Excess demand for TV is spilling over to the web.
Broadband penetration is quickly increasing - 25% growth overall, 80% in Moscow - resulting in improved video quality.
Users’ time online is increasing: Half of all those online are now considered “heavy daily users.”
Internet inventory is sold like TV, with good metrics and innovation.
The status of other media segments, according to the GroupM publication:
Radio is leading the shift from Moscow to the regions: 50% of radio investment is now outside Moscow/ St. Petersburg, compared with 30% in 2005.
Radio also leads in innovation: e.g., branded programming and sponsorhip.
Out-of-home advertising in benefiting from excess TV demand, particularly by large advertisers. Multinational outdoor owners have 35% of supply, but this medium is still too fragmented for revenue potential.
Among magazines, it’s survival of the fittest, although in some segments (e.g., automotive advertisers) excess demand is keeping some secondary titles alive.
Newspaper publishers are resorting to aggressive pricing to attract the TV overspill, but also engaging in active product development, which is protecting newspaper’s share of ad revenue.
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