Page 90 - RusRPTOct19

9.1.7 TMT sector news
Advertising spending in Russia in 2Q19 stood at RUB227bn ($3.5bn), the growth of the ad market slowing to 3% y/y, Vedomosti and Kommersant dailies reported citing the data of Association of Communication Agencies of Russia (AKAR) on September 16. Notably, internet advertising continued to outperform the market and became the only driver of growth, expanding at 20% to RUB110bn. TV advertising decline accelerated to 9% to RU842bn. This made a record decline in TV ads. The last time a decline was registered was in 2015 following the sharp ruble depreciation in December 2014. As reported by bne IntelliNews, the growth of internet advertising did not only undermine the TV segment, but also eroded the market share and budgets of large advertising groups, by allowing small and medium-sized advertisers to work with media platform bypassing the ad agencies. Russia's largest advertising group is OMD OM Group (budget down by 2.4% to RUB57.2bn in 2018), followed by Publicis Group (down by 12.4% to RUB41.3bn), and Dentsu Aegis Network (down by 1.4% to RUB34.4bn). Last year GroupM and Strong saw the sharpest decline in turnover (down by 27% and 31% to RUB21bn and RUB2.1bn, respectively).
Instant messengers are the most popular type of smartphone apps in Russia, says a new study by Deloitte, reports East-West Digital News (EWDN). While Russians now tend to make online rather than traditional phone calls, 53 % of the study’s respondents say they’ve started using these Internet services more often in the past year. An overwhelming number (83%) of Russians have installed WhatsApp, while the Viber and Skype apps have been installed by 61% and 53% of the respondents, respectively. Some 40% of Russian smartphone users have installed Telegram, up 15% from last year, in spite of its ban by the Russian authorities. Conducted in June 2019, Deloitte’s study involved 1,600 Russians of over 16 years of age from 250 locations in Russia. According to Telecom Daily’s CEO Denis Kuskov, also cited by Kommersant, calls via messengers now account for some 35% of the total number of calls in Russia and up to 40% in Moscow.
The Russian media market (excluding VAT) increased 3% YoY to RUB 226-228bn in 1H19, according to estimates from the Association of Russian Advertisers (AKAR), published yesterday. All ad segments showed a negative performance, excluding Internet. Online ad budgets were up 20% YoY in 1H19. According to AKAR Vice President Sergey Veselov, the Russian media market’s soft performance in 1H19 is not surprising, given the macro backdrop. Due to the stagnating economy, advertisers do not have the incentive to invest in brand development (which especially impacts TV ad budgets). The TV ad decline accelerated to 12% YoY in 2Q19, according to our calculations based on AKAR data, after the 6% YoY drop in 1Q19. 1H18 TV ad spending was partly spurred by budgets related to the presidential elections and the World Cup. Excluding these factors, the TV segment would have been down 6% YoY in 1H19, similar to the 1Q19 dynamics. Veselov highlighted that more than 50% of large advertisers actually increased their TV ad spend in 1H19. Thus, he does not consider the TV ad dynamics to be poor and believes the 2H19 dynamics will be more favourable.
Driverless vehicles developed by Russian internet major Yandex have his 1mn kilometres of test drive mileage in Russia, the US, and Israel, Vedomosti daily reported on September 9 citing the representatives of the company. To compare, the mileage of Google's driverless subsidiary Waymo is 12.9mn km, while all of its testing fleet has a mileage of 29mn km.
90 RUSSIA Country Report October 2019 ww.intellinews.com