GPMD AND IMHO TOLD ABOUT PROJECTIONS FOR VIDEO ADVERTISING MARKET

Yesterday ACAR – the largest professional Association of advertising market of Russia – has published a report on the results of 2017.
We asked key players to comment on the sale of media advertising – GPMD (subsidiary of NSC) and IMHO (subsidiary of NSC) on the results presented by ACAR.

Natalia Dmitrieva, General Director of Gazprom-Media Digital:

From the data of ACAR it is clearly seen that video ads are growing much faster than the entire Russian advertising market, and most of its segments. Last year, growth rate of video advertising segment was 26%, while the entire Russian advertising market increased by 14%, television segment – by 13%, Internet segment as a whole – by only 22%. Only the costs of contextual and banner Internet advertising grew at a comparable rate – 25% and 26%, respectively.

In monetary terms spending on video ads last year reached 8.3 billion rubles, and this year we expect market volume of close to 10 billion rubles. Growth rate will drop slightly, but this is quite natural, since in recent years cost of video ads increased at a faster rate relative to other segments.

The main growth of video segment in 2018 will be provided by video ads posted on mobile devices. Its volume is rapidly increasing while there is increase of video consumption from such devices. Last year, according to Mediascope, the number of users viewing video on desktops decreased by 9% by 2016 to 26.3 million people (WEB-Index, Russia, cities with population over 100 thousand people, aged 12-64 years, December 2016 and 2017). I note that compared to 2015, the decline was less significant – only 5%. At the same time, growth in the total number of video views on desktop computers in 2017 was almost zero – only 0.2% for the year or 2.7 billion.

Since September 2017, we can say that video audiences on mobile devices and desktop computers are equal. According to Mediascope, this month mobile video had been viewed by more than 26 million people.

However, share of mobile video in market of video ads remained low. By assessment of GPMD, advertisers spent on this type of advertising only 19,2% of the total volume of funds invested in video ads. In monetary terms, it is 1.6 billion rubles. Despite the fact that the proportion of advertising inventory for mobile devices was higher than the share of costs more than double.

GPMD predicts that this year alignment of forces can change greatly, and share of video ads on mobile devices will be from 30% to 40% of the total cost of advertisers on video ads in Runet. The consequence of this may be more than double growth of the mobile segment – from current 1,6 billion to 3-4 billion rubles. I think, we can calculate rates easily – minimum of 87%, maximum of 150%.

It has come to the point that advertisers are now ready to invest in video ads on mobile devices, without waiting for the market to accurately measure its audience. There are no generally accepted qualitative measurements of advertising audience on mobile devices today. Mediascope started delivering data on such advertising in 2018, but so far only advertising in mobile applications is measured, and technology of measuring advertising campaigns in mobile browsers is still in work. However, large number of brands had already been considering video ads on mobile devices as an integral part of media-mix. After all, in a number of age groups, primarily among active buyers of 20-35 years, up to third of Russians today use exclusively mobile devices. It turns out that the only opportunity for the brand to establish communication with these people – advertising on mobile devices.

Kirill Lubnin, head of IMHO marketing Department:

Online video ads show positive dynamics in the last 5 years. In 2012, its volume amounted to 1.9 billion rubles, in 2017 – 8.3 billion rubles, and according to forecasts for the end of this year, it will approach 10 billion. This is a significant share in the advertising split, given that a number of large advertisers invest 100% of Internet budgets only in online video. Trend of 2017 – is active growth of mobile segment of online video. It will continue in 2018. Also segment of out-stream video actively begins to develop, especially on the resources of large publishers, publishing houses and Internet holdings – there is a replacement of classic banner advertising in more attractive video formats for advertisers.

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