Ad­ver­tis­ing mar­ket fi­nally in re­cov­ery phase

Kyiv Post - - Business - BY OLENA GONCHAROVA [email protected]

Ukraine’s ad­ver­tis­ing mar­ket has en­tered new year with a bit more spring in its step. While Rus­sia’s war and eco­nomic un­cer­tainty con­tinue to take their toll, re­cov­ery be­gan in 2016.

Ac­cord­ing to Maksym Lazeb­nyk, the ex­ec­u­tive di­rec­tor of the All-Ukrainian Ad­ver­tis­ing Coali­tion, ad­ver­tis­ers spent $455 mil­lion (Hr 11.6 bil­lion) in 2016, com­pared to $419 mil­lion the year be­fore.

He ex­pects this year’s mar­ket to reach Hr 14.8 bil­lion, or $540 mil­lion as long as the cur­rency re­mains sta­ble.

Ukraine’s ad­ver­tis­ing mar­ket used to be worth $1 bil­lion be­fore Rus­sia an­nexed Crimea and started the war in the Don­bas in 2014. Ukraine’s na­tional cur­rency has lost more than two-thirds of its value since then.

Vi­taliy Georgiev, strat­egy con­sul­tant at Aim­bu­lance strate­gic mar­ket­ing agency and a mod­er­a­tor at Ukrainian Dig­i­tal Agen­cies Com­mit­tee, says that the ad­ver­tis­ing in­dus­try is “very sen­si­tive” to po­lit­i­cal and eco­nomic in­sta­bil­ity.

“This is a down­side… On the other hand, there is hardly any other busi­ness that can re­cover so quickly,” Georgiev told the Kyiv Post.

The blos­som­ing of dig­i­tal com­mu­ni­ca­tions pro­vides a fresh source of rev­enues. On­line ad­ver­tis­ing will re­main a key factor, mar­ket ex­perts say. In 2016, dig­i­tal ad­ver­tis­ing ac­counted for a sig­nif­i­cant chunk – more than a quar­ter – of Ukraine’s ad­ver­tis­ing pie.

In its lat­est fore­cast, the Al­lUkrainian Ad­ver­tis­ing Coali­tion ex­pects nearly 30 per­cent growth in in­ter­net ad­ver­tis­ing, which is set to rise from Hr 3 bil­lion or $79 mil­lion to al­most Hr 4 bil­lion or $108 mil­lion in 2017.

The main drivers of growth in 2016 were mo­bile ads, paid search (ad­ver­tis­ing in the spon­sored list­ings of a search en­gine) and dig­i­tal video. Ex­perts say this trend will likely con­tinue.

The fig­ures also sug­gest that TV ads, as well as pub­lic me­dia (bill­boards, street and road signs, etc.), will likely boost their share, as these seg­ments went down dur­ing the EuroMaidan Rev­o­lu­tion and the war that fol­lowed. Such me­dia ad­ver­tis­ing should take about 10 per­cent or Hr 1.6 bil­lion ($43.2 mil­lion), while Hr 7.4 bil­lion ($199.8 mil­lion) will go to tele­vi­sion chan­nels – an in­crease of 30 per­cent com­pared to 2016.

Print me­dia is also ex­pected to grow slightly next year, in­creas­ing its share of the mar­ket from the cur­rent Hr 1.1 bil­lion ($28 mil­lion) to Hr 1.3 bil­lion ($35.1 mil­lion), or 17 per­cent.

Up­com­ing spring events, in­clud­ing the World Hockey Cham­pi­onship Di­vi­sion I Group A matches, and the Euro­vi­sion Song Con­test in May, will likely help the do­mes­tic ad­ver­tis­ing mar­ket.

Te­tiana Gusak, a client ser­vice di­rec­tor at Mo­men­tum, a net­work brand ex­pe­ri­ence agency, says that out­door ad­ver­tis­ing in Ukraine looks like a “garbage bin” be­cause it is of­ten poorly in­te­grated into cities’ ar­chi­tec­ture. She says that brands should cre­atively come up with ad­ver­tise­ments that “stim­u­late pos­i­tive emotions.”

Kyiv City Coun­cil is work­ing on a plan for the city that will help out­door ads to blend in with ur­ban sur­round­ings.

As for new trends, ex­perts say that 2017 is go­ing to mark a turn­ing point in the way au­di­ences con­sume video con­tent.

“Users are ac­cus­tomed to con­sum­ing video con­tent in the gi­ga­bytes, and this leads to the fact that there are dif­fi­cul­ties with the tra­di­tional text con­tent con­sump­tion,” Georgiev says, adding this trend is go­ing to in­spire mar­keters to pro­duce more square-shaped videos that fill the full space of a social me­dia news­feed when viewed on a mo­bile de­vice. He said that this would likely to pay off, as such video clips are more likely to be viewed to the end.

Ac­cord­ing to U.S.-based Laun­dry Ser­vice, a social me­dia agency, view rates for square videos are 28 per­cent higher than for hor­i­zon­tal con­tent. That of­fers more op­por­tu­ni­ties for ad­ver­tis­ers, in­clud­ing more in­ter­ac­tive for­mats, and en­cour­ages them to pri­or­i­tize mo­bile con­tent over more tra­di­tional ad­ver­tis­ing forms.

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