The survey confirmed the dominating role of television in Russia. The concluding paragraph says: “Russian TV – and primarily three state channels – has an almost unchallenged monopoly on the formation of the social and political agenda in the country. Any other sources of information, including the internet, have a disproportionately smaller audience. Qualitative analytical media, considered to be independent, have a noticeably smaller audience than their state counterparts, even on the Internet. The actual lack of alternative media in Russia is an important condition for maintaining the existing political order.”

The objectiveness of TV has been challenged recently, but this does not have a big impact on the audience numbers: “Over the last three or four years, the proportion of Russians who doubt the objectivity of news programs on central TV channels is increasing. However, this does not affect the consumption of television: TV remains the main source of information for those who trust it (92% of this group), and for those who do not trust it (88% respectively). People do not trust it but still watch it, as there is no meaningful alternative to[this type of] television in Russia today.”

Despite its relatively high penetration – 57% of Russians and 73% of Muscovites regularly use the internet – the internet does not play a major role in setting the agenda: “The impact of internet resources in Russia today is negligible. People who get their news from the internet (and do not watch TV channels) constitute no more than 5%, while 20% of internet users use it as a supplement to television. Moreover, the publications that are considered to be independent are not taking leading positions on the internet (even in large cities).”

A small proportion of Russians use several sources of information: “The most informed – about 7% – use all possible sources of information about ongoing events. These are mostly middle-aged people, well-educated and well-off; about half of them live in Moscow and other big cities. They demonstrate the greatest interest inunderstanding what is happening.”

Some selective numbers from the research:

• 90% named TV as their news source
• 55% named TV as their only news source
• 65% trust TV as the most credible news source
• 20% use only traditional news sources – TV, radio newspapers
• 5% use the internet as their primary news source and don’t watch TV
• 7% use multiple (4 or more) news sources
• The number of readers of daily newspapers dropped from 39% in 2003 to 28% in 2014
• 50% of Muscovites never read newspapers
• Quality independent newspapers and magazines have audiences of:
  •     Kommersant – 6%
  •     Vedomosti – 5%
  •     Novaya Gazeta – 2%
  •     Forbes – 2%
  •     The New Times – 1%
• Echo of Moscow has an audience share of 11% in Moscow
• The TV Rain website has an audience of 4% in Moscow
• 57% of Russians and 73% of Muscovites regularly use the internet
• 32% of Russians and 20% of Muscovites never use the internet

For more, see here (in Russian): Российский медиа-ландшафт: телевидение, пресса, Интернет

• The Seminar presented the following topics:“Technology Platforms & Decision Criteria”.  The presentation outlined the key decisions involved in selecting and maintaining web platforms.  The presenter discussed the pros and cons of in-house versus outsourced development as well as proprietary versus open source software.  Detailed decision criteria are recommended.  Because of the importance of the Content Management System, the presentation closes with a comparison of the three open source CMS platforms – Drupal, WordPress, and Joomla.
KB Seminars: Working with Technology – Platforms; 10/13 from MDIF
• “Product Management Roles and Responsibilities”.  The presentation focused on the role of product management as a ‘translator’ between the needs of users and technology’s ability to deliver web products to meet these needs.  In particular, the seminar outlined key elements in a business plan and product specification.  Examples of online and software products used to support the product development and bug tracking processes are also included.
KB Seminars: Working with Technology – Product Management; 10/13 from MDIF
• “Opportunities in Online Advertising”.  The presenter detailed the elements of online advertising standards including pixel dimensions, file size and other graphic requirements.  The discussion outlined new trends in online advertising targeting including behavioral and contextual targeting.  The rapid emergence of real-time bidding or programmatic buying and its key components is also introduced with specific examples and a summary of companies working in the Russian/Ukrainian market.
KB Seminars: Working with Technology – Advertising; 10/13 from MDIF
• “Development Metrics: Measuring Your Site for Improvement”.  This section presented a model for online metrics including examples of data sources and calculations.  Three types of metrics are discussed.  Foundation metrics provide basic audience behavior (visits, page views) and audience descriptions (location, gender, etc.). Key Performance Indicators (KPI’s) are discussed in terms of developing measures that assist in making business and content decisions to optimize websites for traffic or revenue.  Finally, tactical measures like A/B testing and heat maps are introduced as techniques to acquire specific information to make tactical decisions about a website.
KB Seminars: Working with Technology – Metrics; 10/13 from MDIF
• “Website Hosting Fundamentals”.  The Seminar presented the key types of hosting, their different uses and recommended criteria for selecting hosting methods and vendors.

The Seminar aimed to provide media managers with decision-making and management techniques for working with technology including content management, advertising and ad serving, and metrics systems.

Location: Moscow, Russia

Dates: 9 – 10 October 2013

Attending:  Russian and Ukrainian Technology, Product and Commercial Managers

Russia has seen some of the fastest growth in digital advertising in recent years. Even though the torrid rate of growth proved to be unsustainable last year, digital advertising is capturing more advertising revenue, and the opportunity has attracted international investment in the classified advertising market.

News organisations, both print and broadcast, will need to monitor these fast-moving developments to develop an effective strategy to compete for digital advertising revenue with a range of new competitors.

Digital growth outpaces other media

Advertising continued to grow across most media in Russia in 2012, but while the rate of digital growth slowed, its impressive 35 percent rise year-on-year outpaced other media, according to the Russian Association of Communication Agencies.

Both print and television advertising continued to grow in 2012, but their respective growth rates of 2 and 9 percent was dwarfed by the growth in internet advertising, according to a report in East-West Digital News.

Internet display advertising only grew 17 percent. The real growth in digital advertising was driven by contextual advertising, which includes search advertising. It grew an impressive 45 percent.

In three to four years, it is predicted that digital advertising will capture a third of the advertising spend in Russia, according to a report in Vedomosti.ru. The rise of digital advertising comes at a cost for other forms of advertising. It is predicted that television’s share of advertising will decline from 48 percent to 46.4 percent this year, and print advertising will decline from 13.9 percent to 12.6 percent, according to the Vedomosti report.

Print advertising growth declined from 6 percent in 2011 to only 2 percent, but much of the coverage of the report focused on how internet advertising was cutting into television revenue.

Stanislav Povolotsky, RBC media holding’s commercial director, said that advertisers that had traditionally used television to reach consumers were now shifting to internet advertising, according to East-West Digital News.

In a widely reported sign of the shift from television to the internet, search engine Yandex almost overtook state-owned TV station Channel One in advertising revenue. In 2012, Yandex brought in 28.1 bn rubles, while Channel One earned 28.2 bn in advertising earnings, according to the Wall Street Journal. Of course, Yandex earns one out of every two rubles spent on online advertising in Russia, according to Immanuel Simonsen.

New advertising technologies such as real-time bidding are helping to fuel internet advertising growth in Russia, according to Michael Voschinsky, the managing director of Aegis Media.

Rise in digital ads attracts investment

With Russia offering such promising growth opportunities in terms of digital advertising, the market is attracting foreign investment.

In March, South African media house Naspers, struck a $570m deal to merge two Russian classified sites it owns, Slando.ru and OLX.ru, with their larger competitor, Avito.ru.

According to the Financial Times, the deal would create the fifth most popular website in Russia, with more than 100m page views per day, and the third largest classified advertising site in the world.

The move was seen as the beginning of consolidation in Russia’s online classified market, according to Ventures Africa.

Russia continues to experience rapid internet growth, with the number of internet users growing by a third every year, and the market is developing very rapidly. News organisations, especially print groups, will need to develop strategies to compete for internet advertising revenue or they may face stagnating revenues at best.

News groups will need to invest in audience intelligence in order to deliver better targeted advertising to compete with the contextual offerings of Yandex and the major social networks. Yandex poses a particular challenge to regional and local media as many of its advertisers are small and medium businesses rather than large national or international advertisers, and consolidation in online classified companies will put pressure on local media by chipping away at this lucrative source of revenue.

While search engines and online classified companies might not seem like competitors to news organisations, they will compete head-on with news groups for internet advertising revenue. News groups will need to develop strategies to face these new and growing sources of competition.

The seminar presented the following topics:

• “Market Overview”. This section provided an overview of the online classifieds market with special focus on recent developments in the Russian and Ukrainian markets. The overview also discussed current trends in global online classified and directory development and presented strategic models for local media to participate in the online classified market.
•  “Business Models: Classified and Directory”. This section presented the common technical and design features common to most online classified sites and then presented a staged approach to building revenue models.
• “Listings and Sales”. A discussion of techniques needed to build the listings volume for an online classified site.
• “Audience/Marketing”. A discussion of SEO and other techniques to generate audience to an online classified site.

The goal of the seminar was to create a base of understanding of the trends in the online classified market and the potential impacts on attendee’s existing classified business as well as provide some tools and techniques to help build listings volume and audience for attendees’ existing classified sites.

Location: Moscow, Russia

Dates: 1 -2 April 2013

Attending:  Russian and Ukrainian media executives

This raises questions for how traditional media should respond and position themselves to serve audiences that are increasingly looking for not only content, but also conversation online.

To help us understand not only the growth of the RuNet, but also the impact that this is having on media and government regulation, we spoke to Sam Greene, the director of the Centre for New Media and Society at the New Economic School in Moscow. At the centre, “we are trying to understand how new media is changing the way we live, the way relate to each other, politics and the economy,” Greene said. The centre is connected with similar efforts across Russia and around the world, with partners in the US, UK, India, China, Hong Kong and South Africa to try to understand how the internet and new media is changing our societies.

“It is not possible to ignore the internet as a source of information anymore,” Greene said. It has moved beyond being a specialist media or a media for the elites, with between 30 to 40 percent of Russians now using the internet as an important source of information, he added.

It’s not just that more people have access to the internet, but as broadband access rapidly expands around the country, more people can consume and create video, audio and other media. “It gives (the internet) the immediacy that radio and television have and the same emotional connection you get from radio and television,” he added.

With this growth of RuNet as an important source of information, it is also having an impact on those who do not use it. The internet is not yet on par with television in terms of agenda setting, but it’s getting there, Greene said. News is more than just what we watch on television, hear on the radio or read in the press, news also informs our everyday conversations. “Even if your babushka, your grandmother, is not on the internet, their views are being shaped by what they hear from their grandchildren,” Greene added.

Cross-platform experimentation

With this rapid growth in internet use being a relatively recent phenomenon, the advertising market in Russia remains relatively strong when compared with other parts of the world, which means that it is still possible to make a lot of money in print media, local newspapers and television in Russia, Greene said.

Despite the current strength in the traditional advertising-supported media model in Russia, there is already a realisation that newspaper and television audiences in 10 years won’t be as high as they are now. That is leading to a lot of cross-platform media development as people are increasingly keen to bring their message to audiences online, Greene added.

And readers are responding. Russian readers have always been keen to let editors know what they think, but the internet has added to this interactivity.

“It makes it more difficult for those who want to control the information space, it makes their job much harder because the reaction space on the internet is much faster,” Greene said.

Digital technology has also added an important element of citizen reporting in Russia. The most dramatic example of this was during the flooding this summer in Krymsk, which killed more than 170 people. The region wasn’t a place where most major news organisations would have a bureau or staff, but people told their own story using photos taken on their mobile phones.

“A lot of journalists are now finding that it is their job to consume and filter what readers are sending in and translate that into verified and trustworthy news,” Greene said.

Government moves to control the internet

While these changes make the internet harder to control, the government has changed its stance on the level of control that it wants to exert over the internet. He said:

Early on in Medvedev’s presidency, now we’re talking five or six years, when people were criticising the lack of independent television and lack of diversity in mainstream media, Medvedev and the government were perfectly happy to point to the internet as the place where you could have pluralism. … There was a feeling, ‘well, we’ll let the internet do what it wants to do, and we’ll let people do there what they want to do.

Now they don’t feel that they can look on it as benignly, with as much distance, as in the past.

Despite this shift, Greene doesn’t believe that the government will move to a systematic form of control like China. Not only would it be expensive to develop such a system of control, but the government also realises that there is a risk in rolling out a state system of control. While it’s not possible to tie denial of service attacks against the sites like the popular Live Journal blogging platform, everyone assumed that the government was involved and reacted angrily.

How should news organisations respond?

With the internet growing rapidly and government policy changing, it poses challenges for news organisations in deciding how they should respond to these developments.

Greene said:

The first thing is to get the journalism right. Good journalism is good journalism whether it is online or offline. (The audience) might come because you built nice bells and whistles, but they are going to stay with you because you are bringing them a service.

But at the same time, he also said that news organisations need to realise that the internet is more than just a place for people to read what you have written or watched what you have recorded. The internet is an interactive space, and it can create a new, positive, more engaged relationship between journalists and their audiences.

To realise the internet’s full potential for journalism, he encouraged journalists not to be scared of technology. So much can be done without a lot of investment thanks to a range of new, low-cost and no-cost tools and services.

Success is not about building expensive websites but about “getting conversations started and participating in those conversations”.

To take advantage of this growth in internet advertising, we explore how to organise and motivate your sales team. Advertising sales is fundamentally about solving problems for your advertisers by providing them with products and an audience, at prices they are willing to pay.

In the next presentation we look at key sales concepts including:
• Calculating your potential advertising market.
• Identifying sales channels.
• Strategies for making money in print (or broadcast) and online.
• Motivating your sales force.
• Organising digital sales.

After looking at how to organise and motivate your sales teams, we look at two types of digital advertising: ad networks and classifieds. As we wrote about recently in the August Digital Briefing, ad networks can be an important source of early income as you grow traffic to your site.

Although a couple of large ad networks get the lion’s share of the attention, there are more than 300 ad networks out there, with some focused on specific platforms or technology such as mobile or video ad networks, some focused on specific geographical areas, others focused on specific themes or types of content such as the Active Youth Network and even others focused on audience behaviour online.

Ad networks help address a number of issues facing advertisers such as the large choice of publisher sites leading to an over-supply of ad space, and the difficulty of identifying high-quality content.

In the next presentation, we look at different ad network pricing models and how to choose the right ad network.

We look at classified advertising, beginning with a cautionary tale about the collapse of online classifieds as a revenue source for newspapers in the US. New online classified players such as Craigslist, Monster.com and HotJobs.com all helped to shift classified advertising from newspapers to new digital players. We look at how to develop your digital classifieds offering to prepare to defend yourself against new digital competitors.

Online classifieds include not only the “Big Three” of classified advertising – recruitment (jobs), real estates/rentals and auto – but also directories, free classifieds and calendars. Specialist classified providers that focus on dating, education or other types of products and services have also sprung up. Online classified advertising is in the early stages of development, but it still represents a potentially large market and has already attracted a number of large, international players.

We then cover several different strategies for developing your online classifieds business, including:
• Go it alone: building, selling and marketing your own classified advertising site.
• Build a network with other local media.
• Partner with a national site, which provides the technology and perhaps marketing and sales service, leaving you to focus on local marketing and sales.
• Enter into a traffic partnership, which means that you sell a traffic sponsorship deal to a national partner.

We look at examples of these strategies and how to organise your business to achieve success using one of these strategies.

Of course, digital advertising is a fast moving sector, so we also look at new developments and the future of the online classifieds.

In the final presentation, we look at how news organisations are using social media to generate revenue, either indirectly by using it to grow audiences and gain more data about their audiences, or directly by selling social media advertising.

The Seminar presented the following topics:

• “Online Advertising Market Overview”.  An overview of the dynamics of the Russian and Ukrainian online advertising market including market size and growth. The training focused on presenting the standards for online display advertising as well as an overview of standard pricing models.  A short discussion of ad serving systems was also included.
• “Sales Teams Organization and Motivation”.  A discussion of different approaches to sales organization and motivation as well as a discussion of integrated, independent, and hybrid online sales teams.
• “Advertising Networks”.  Training provided an overview of the structure of advertising networks as well as a discussion of the pros and cons of participating in advertising networks like Yandex Direct and Google AdSense.
• “Measuring Success – Google Analytics”.  An overview of the fundamentals of using Google Analytics to measure traffic growth and understand basic audience demographics and behavior.
• “Online Classifieds – Local Opportunities”.  Online classifieds often represent the largest category of traditional local media advertising and are often the first category to move online.  The training focused on the elements of the online classified market and techniques of managing the transition from print to online classifieds.

The goal of the seminar was to provide a common base of knowledge about the opportunities in online advertising both display and classifieds.  The seminar also encouraged discussion among participants about the pros and cons of different online advertising techniques and the potential impact on the traditional advertising business.

Location: Moscow, Russia

Dates: 27 – 28 September 2012

Attending:  Russian and Ukrainian Media Advertising Sales and Marketing Executives

More than half of Russians access the internet everyday, according to Sergei Plugotarenko, the director of the Russian Association of Electronic Communications. Even though that is below the European average of 78%, Russia still has the world’s sixth largest internet market, and he believes that the RuNet will continue to grow at a rapid pace. By 2014, he projects, more than 70% of all Russians will access the internet, meaning that the country will have some 80m users.

The growth of RuNet and its role in the flow of news has not escaped the notice of international media. In a profile of “media provacateur”, Ksenia Sobchak, who was described by the New York Times as the “Stiletto in Putin’s Side”, the role and reach of the internet in Russian society and media was explained:

An estimated 66 million Russians use the Web every day — the largest such national population on the European continent and one of the fastest-growing in the world. Russians have adopted the Web not only as a public sphere for debate but also as a refuge of last resort, a citizens’ court to vent anger at and post evidence of official malfeasance. Videos depicting supposed police abuse, state theft and even car accidents go viral in minutes.

Economically, internet advertising is growing rapidly in Russia – seeing a growth of 55% in 2011 to €1.12 billion, according to the Interactive Advertising Bureau. This growth was attributed to small and medium businesses gaining experience with the internet and using it to attract customers through the growth of e-commerce, according to Leonid Delitsyn with the brokerage FINAM. With the Russian internet audience now the largest in Europe, he also said that major advertisers have increased their spending on online advertising.

For news organisations, the growth presents both opportunities and challenges. The market is growing quickly, but in terms of advertising, between 2010 and 2011 Europe-wide, search advertising revenue grew, while display and classified and directory advertising fell. That means that search engines such as Google and Yandex are capturing a higher percentage of that growth. With the growth in online advertising, news groups only need to capture a bit of that ad growth to fuel future endeavours, but the challenge is to prove to advertisers that your relationship with your audience matters and delivers results.

Apple recently announced that it will be getting rid of Google Maps starting with its iPhone iOS6 and introducing its own maps service.  With this, Alex Salkever of local journalism business site Street Fight says it opens the door to advertising revenues through hyperlocal ads based on people’s current location and their search history.  And it can succeed in this ad world that has been mainly dominated by Google. Apple has all the technology in place to deliver customised, local ads to people doing searches on their mobile phones, Salkever adds.

Google, meanwhile, has revamped its own map ads in hopes of getting higher click-through rates (CTR) and keeping its share of hyperlocal advertising revenue.

To the surprise of many, Facebook has begun to demonstrate just how lucrative mobile ads can actually be.  “Sponsored stories” on the Facebook mobile app – ads that are integrated into the Facebook newsfeed – are getting 1.93 times higher CTR than sponsored stories on Facebook desktop, and the eCPM (effective cost per thousand impressions) has been 2.65 times higher.  Although some of the ad companies interviewed by Josh Constine of TechCrunch varied in their estimation of the CTR, even the most conservative estimate of 0.8% still saw an average CTR of 2% when smart targeting was taken into account.  According to Tutawa Ahwol writing for Public Media Interactive, the industry standard for click through rates for internet banner advertising is 0.2 to 0.3 percent based on data from 2010. The worry for the industry is that CTRs have been dropping for years, and more recent data from PR and marketing firm Ogilvy say the CTRs for internet banner ads have now fallen to just 0.1 percent.

Therefore, Constine says,

There’s no space for an ads sidebar and if far too many ads are injected into the content feed, users could get angry and stop browsing. But the impressively high CTR and eCPM mean Facebook doesn’t have to show too many Sponsored Stories to make a ton of money off of them.

Given the information Facebook has about its users, it is better poised than any other social networking site to produce extremely targeted advertisements – including hyperlocal ads based on real-time locations.

While these big digital companies are exploding onto the mobile advertising scene, it’s important to note that the biggest growth will be seen outside of North America.  Russia’s mobile penetration is amongst the highest in the world at 159%, 25% of which are smart phones.  Mobile internet penetration is at 20%, and is growing exponentially.  Right now search engine advertising accounts for approximately 53% of the total online advertising in Russia, and Yandex is the leader with a whopping 61% of search revenues.

The challenge is to understand how news organizations can take their share of the mobile advertising market, especially local news companies that can more easily take advantage of hyperlocal ads.  In last year’s Street Fight Summit, Alistair Goodman, CEO of Placecast, said “We’re approaching a time where you’re going to be able to bid on a user on a street corner at a particular point in time in real time.”

If you’re interested in more innovations in the business of hyperlocal, Street Fight is a media and research organization – with a blog – focused on exactly this.

While Facebook is dominant in most markets around the world, Odnoklassniki reached 38.1% of the Russian online audience in 2011, according to TNS, far more than Facebook’s reach of 24.7% of Russia’s internet users. Odnoklassniki also has a relatively higher concentration of users in the 25-35 age bracket in Russia, making it attractive for companies wanting to reach young consumers.

In addition to its domestic dominance, foreign users constitute an important share of the audience. According to Live Internet, Odnoklassniki attracts 29 million unique users monthly, and is particularly popular among the worldwide Russian diaspora. The site claims to serve 1 million users from the United States as well as 80% of the Russian-language population of Australia. In an effort to continue its international growth, Alexander Izryadnov, an executive at the Mail.Ru Group the parent company for the service, also announced that Odnoklassniki will offer localized versions to its Uzbek, Armenian, Georgian and Moldovan audiences by the end of 2012.

Today, a significant trend for social networks is that most of the traffic goes not to the website, but to the mobile version. Mali.ru group noted that the mobile version of the Russian site is even more popular than the web version among its diaspora users. The daily audience of the iPhone version of the site grew from 10,000 to 250,000 over the course of 2011.

With the international growth of Odnoklassniki, it demonstrates how Russian social networks can be a channel to help news organisations tap diaspora audiences, just as Facebook can do this for news organisations in countries where it dominates. The development also suggests that in order to leverage more audience on the social media, news organisations needs to employ a wider range of marketing strategies, including social media strategies, rather than focusing solely on their site.