Media Market Digest August 2016

Internet to overtake TV in 2017 – Zenith global advertising forecast

2

Jan-Aug’2016 in term

of WTRP’s vs Jan-

Aug’2015

3 Source: GFK/Nielsen, Direct Advertising, excl. Social & Media, TA: 18-50 50k+. Data owner is ITC. Processed by “CCM”

Subsidiary Enterprise

Key facts

SOR in average 86% In Aug’2016

It stays close to critical 90% level since 23 week

Aug’16 vs Jul’16

in WTRP’s

The annual conference

was held in Kyiv on

September 22

180,4

66,8

53,3

44,2

37,4

33,5

33,3

27,7

24,6

23,9

Pharma

Food

Telecom

Hygiene

Cosmetics

Trade

Cold AFB

Confectionery

Entertainment

Auto

14%

15%

8%

30%

125%

5%

32%

18%

-3%

-4%

4 Source: GFK/Nielsen, Direct Advertising, excl. Social & Media, TA: 18-50 50k+. ‘000WTRPs. Data owner is ITC.

Processed by “CCM” Subsidiary Enterprise

Epicenter and Le Boutique provided

Trade category increase vs prev. month

Metro high activity couldn’t compensate category drop vs prev. year

Cosmetics continues to grow vs 2015 driven by L'Oreal and Beiersdorf AG

Cold AFB category decreased due to kvass group activity drop in August

West oil group was the only one showed significant growth in Auto category vs July

29%

18%

12%

21%

43%

1%

-11%

-13%

-37%

TOP Categories 2016 vs 2015 Aug’16 vs Jul’16

29,5

27,4

24,5

21,1

18,5

16,9

15,3

15,0

14,0

13,7

Nestle

Procter&Gamble

Pharmak

Reckitt Benckiser

L'Oreal

Vodafone

Kyivstar

Ukrnafta

Danone

Unilever

33%

38%

8%

136%

11%

3%

176%

-11%

-4%

-23%

5 Source: GFK/Nielsen, Direct Advertising, excl. Social & Media, TA: 18-50 50k+. ‘000WTRPs. Data owner is ITC.

Processed by “CCM” Subsidiary Enterprise

116%

9%

118%

14%

7%

33%

16%

-6%

-27%

-44%

TOP Advertisers 2016 vs 2015 Aug’16 vs Jul’16

6 out of 8 advertisers in Confectionery category lowered their activity in August

Ferrero was the main driver of category drop

Schwarzkopf&Henkel increased its activity that ensured Detergent activity growth vs prev. year

SC Johnson wasn’t active in this category in 2016

Nestle increased its activity that had a positive impact on Hot Beverages category growth vs prev. month

6

Source: http://goo.gl/FN7Xk1

TV market is going to exceed indicators of 2013 in UAH this year. Such forecast was made by CEO of StarLight Sales Andrew Partyka. Cost for TV commercial in dollars will be very different from 2013 or 2008 even with rising of pries by 35%.

Andrew Partyka about market size and increasing of prices

Source: http://goo.gl/QPFQ46

StarLightSales is increasing TV commercial cost for new clients and cost for additional volume for advertisers, that already have contracts.

Andrew Partyka noted, that autumn cost 2016 will be the offer for 2017 after increasing by 35%. And prices wiil increase for 2-3 years at least.

StarLight Sales is increasing TV commercial cost by 35% starting from autumn

Increasing demand in 2H'16 allows Sellers at least try to catch up consumer inflation 100% 2013-2016 years in UAH, instead +30% TV price increasing. It is possible only in case significant economy revival and rapid TV market boost within next years. 2017 year's demand will be the indicator of possibility to appease Sellers appetites.

Alexander Polinovskiy, TV Buying Group Head Zenith Ukraine

TV channels want cable operators pay them retransmission fee at the rate of 2,5 UAH per month for every user. «We are talking about fee at the rate of 2,5 UAH for the broadcasting of 20 TV channels of four media groups now…»

TV channels announced to cable guys price for the broadcasting

Source: http://goo.gl/GurxKF

Igor Kolomoysky is denying information about selling TV channel “1+1” to organizations, that connected with the president of Ukraine. This information was announced in widespread press release.

The owner of 1+1 media refuted information about selling TV channel 1+1

7

Source: http://goo.gl/hb3gZQ

Source: http://goo.gl/Fc254c

“1+1” leads in three audiences at the same time in MB Top Channel research according to the August results. “Ukraine” channel at the head of TOP in another one. “Novyi Kanal” and “1+1” has the most noticeable growth of share, “Ukraine” and ICTV − the most noticeable fall.

Top-list of TV channels in August: 1+1, TRK

Ukraine and breakthrough of UA Pershii

Not the first bottom anymore. Why is Inter losing its audience?

Source: http://goo.gl/ZktD1O

“Inter”, which used to be the most influential TV channel in Ukrainian media space, is losing his audience. The youth just don’t watch Russian programs.

8

9

186,8

123,8

114,9

106,6

92,2

87,7

74,0

64,4

58,5

58,3

Carlsberg Group

Nestle

Citrus

Douwe Egberts

Reckitt Benckiser

Kyivstar

Mondelez

Wargaming

L'Oreal

Allo

356,4

240,3

197,0

188,3

185,5

178,9

159,1

133,6

131,9

126,8

Trade

Leisure time

Alcohol

Hygiene

Cold AFB

IT

Food

Confectionary

Hot Beverages

Automotive

Apr-Aug 2016

Source: Gemius Ad Real, MLN Impressions. Data is processed by “CCM” Subsidiary Enterprise

Apr-Aug 2016

TOP Categories TOP Advertisers & VOD

10

Rozetka

Yandex

101XP GamesLimited

Citrus

Allo

Mobtop

GEPUR

Georgia.travel

Vulkan Casino

Bitcoin

Trade

Leisure time

Finance

Computers

Tourism

Media

IT

Automotive

Wear

Real estate

Aug 2016

Source: Gemius Ad Real, MLN Impressions. Data is processed by “CCM” Subsidiary Enterprise

Aug 2016

TOP Categories TOP Advertisers & Display

Consumer Barometer 2016 presents the results of a new study conducted by TNS Infratest commissioned by Google, and dedicated to the behavior of Internet users. Results of the study are presented as analytical online tool https://www.consumerbarometer.com/en/

11

Actual study on Behavior of Ukrainian Internet users is available

Source: https://goo.gl/JdVnof

Gemius finds out how young people live online

Source: https://goo.gl/hiIP0R

Gemius has checked which websites are the most popular among people in the 15─24 age group in Poland, Turkey and Romania, and in Belarus, Ukraine and Hungary. Find out how young people live online

Facebook is changing the way it displays Trending Topics, removing the story descriptions that were previously listed beside topics, and now only showing a “simplified” topic and its number of mentions.

12

Facebook removes story descriptions for Trending Topics & replaces with

number of mentions

Source: http://goo.gl/SSxY5K

Twitter Is Offering Influencers a New Way to Make Money on the Platform

Source: https://goo.gl/lKadF3

Twitter is offering influencers a new way to make money on the platform - adding preroll ads 'as simple as checking a box'.

One major trend is the shift away from big celebrity bloggers, to micro-influencers, which Bloglovin defined as “mid-sized influencers, with dedicated, highly engaged followers. Nearly 60 percent of the 2,500 micr-influencers surveyed by Bloglovin said they felt that Instagram is most effective for engaging with audiences, while 18 percent think the same of Facebook.

13

Influencers: Instagram Is the Most Engaging Platform (Report)

Source: http://goo.gl/wnbEfT

Mobile Search as buying motivator

Source: https://goo.gl/Ofegxt

A recent study Mobile in the Path to Purchase survey 2016 behavior of smartphone users when searching for product information and the purchase of goods in different categories - from clothing to vehicles - showed that Ukrainian actively use smartphones to search for information about the product before buying.

14

17,9

15,5

14,6

8,9

8,2

7,9

7,7

7,4

6,9

6,4

Fozzy Group

Epicenter

Sport Life

Lifecell

Riel

Vodafone

Samsung

Privatbank

Metro

K.A.N.Development

44%

2%

22%

49%

155%

4%

38%

-10%

-15%

-16%

TOP Categories

171,4

113,0

66,4

51,4

36,0

26,8

22,6

21,4

18,7

15,4

Trade

Realty

Entertainment

Auto

Telecom

Finance

Sport

Restaurants

Medicine

Tourism

17%

61%

28%

46%

2%

21%

20%

32%

61%

-1%

Telecom category increased this month thanks to Motorolla and Huawei Technologies activity growth

Visa activity grew up 4 times, but that didn’t stop Finance category drop vs prev. year

Volya took leadership in IT category thanks to activity increase vs prev. year

Pepsico and New products provided Cold AFB category decrease vs 2015

2016 vs 2015

15

2016 vs 2015 TOP Advertisers

Source: Communication Alliance-OOH, Budget, Mln UAH. Data is processed by “CCM” Subsidiary

Enterprise

OOH market grew by 23% vs Jan-Aug’15

16

"Prime Group" moves to a new state monitoring posters

Source: http://goo.gl/PFZxwB

Increase in the cost of outdoor advertising 2016

Source: http://goo.gl/B2oKSX

In 2016, operators of outdoor advertising of Ukraine had to raise the cost of their services at least twice — in the 1st half of the year and now, at the beginning of the 2nd half. This is based on the market trend of growth in advertising budgets while reducing the total fleet of advertising constructions in Ukraine and increasing in direct costs of operators‘ services.

Additional audit conducts a team of professional photographers. For three days, they take pictures of all the planes "Prime Group" and promptly transmit the footage in the company monitoring department. Photographing is carried out in ultra-high resolution. It reveals inevitably arise over time, defects at an early stage and quickly eliminate them.

The Outdoor Advertising Association of America (OAAA), trade association for the out of home (OOH) advertising industry, today announced it has joined the broader industry in addressing new, emerging ad technologies and practices through the Digital Advertising Alliance (DAA), a self-regulatory organization that implements and enforces cross-industry principles around the collection and use of data for interest-based advertising. This step is intended to help inform future OAAA work and guide its members’ privacy efforts in the quickly evolving use of ad technology for OOH advertising.

17

Outdoor Advertising Association Partners with Digital Advertising Alliance to Promote Responsible Data Principles for OOH Advertising

Source: http://goo.gl/Q3kkeb

Havas rolls out new global OOH digital network Adcity

Havas is launching a new global out of home and geolocation network, Adcity. Adcity has been running for two years in France and will now include operations across 35 offices with 300 local experts across Europe, Asia, North America and Latin America.

Source: http://goo.gl/xWmhLu

18

15,9

8,0

6,5

6,2

5,3

4,4

4,1

3,9

3,8

3,6

L'Oreal

Seldiko

Olaynfarm

ChaneL

Hexagone

Fitobiotehnologii

Procter&Gamble

Burda

Dalgakiran

UkrainianNational Lotery

59%

13%

458%

39%

160%

164%

230%

321%

-42%

-32%

52,0

45,4

45,0

42,4

22,8

21,3

13,2

12,0

11,9

9,3

Trade

Cosmetics

Entertainment

Pharma

Auto

Wear

Finance

Perfumes

Jewellery

Restaurants

44%

17%

64%

76%

19%

7%

52%

-2%

-9%

-10%

Platinum Bank activity increased, but that didn’t stop Finance category drop vs prev.year

The main reason of category drop was OTP Bank

Perfumes category decreased

Seldiko was the only active adv. in August

Thanks to high activity of new comer O'Gorod Restaurants category grew vs 2015

2016 vs 2015 2016 vs 2015

19 Source: Communication Alliance, Budget, Mln UAH. Data is processed by “CCM” Subsidiary Enterprise

TOP Categories TOP Advertisers

Print market grew by 16,5% vs Jan-Aug’15

20

Source: http://goo.gl/QCw02V

Vogue UA presented new Editor-in-chief After 3,5 years since the day of launch Masha Tsukanova leaves the post of editor-in-chief. Olga Shushko is taking the post.

21

16,3

16,0

11,6

9,6

8,9

6,5

6,1

6,0

5,9

4,4

BayaderaLogistik

Natur Produkt

Victor & Co

Get'man

Zolotiy vik

MobilLuck

Megapolis

Poltava Distillery

Russkoe radio

UkrainianNational Lotery

32%

82%

409%

47%

-4% 51,5

50,5

38,9

27,6

21,7

21,2

16,2

9,7

8,8

8,3

Entertainment

Alcohol

Trade

Pharma

Food

Auto

Realty

Jewellery

Finance

Education

56%

102%

111%

268%

45%

101%

46%

48%

123%

265%

MobilLuck was the main reason of Trade category increase vs prev.year while Zolotiy vik drive category growth vs prev. month

Pharma category grew its share twice vs prev. year up to 9,37%

Victor & Co and Gidrosend were the main reason of Food activity increase vs prev. year

2016 vs 2015 2016 vs 2015

Source: Communication Alliance, Budget, Mln UAH. Data is processed by “CCM” Subsidiary Enterprise

TOP Categories TOP Advertisers

Radio market grew by 88% vs Jan-Aug’15

22

Top managers of leading advertising holding companies specified media inflation forecasts for 2016 and predicted possible inflation level for 2017 as a part of a regular initiative from Kwendi Meda Audit. Inflation level for Radio, OOH and VOD could be higher compared with previous forecast.

23

Leaders of the largest advertising holdings in Ukraine specified media inflation level forecasts

Source: https://goo.gl/9j0k0X

Economy revives following a three-year economic crisis. GDP and private consumption are expected to grow by 3-4% next year which makes a strong basis for admarket uprise. Moreover, lack of inventory on TV and digital (VOD), as well as cut of OOH sites drive inflation for these media even higher as a separate cost driver along with GDP growth. Notwithstanding high media inflation, Ukraine still enjoys comparatively low ad cost giving good opportunities for brands to grow fast.

Denis Storozhuk, Managing Director Zenith Ukraine

Global advertising market will grow by 4.4% and reach 539$ billion in 2016 according to Zenith forecast. June forecast was improved by 0.3% thanks to the new data from American television and social networks. The forecast for the coming years was also improved and reached the level of +4.5% in 2017 and +4.6% in 2018.

24

Zenith forecast: Internet will overtake TV in 2017

Source: https://goo.gl/ougKuG

According to Admixer, online advertising continued its rapid growth in the first half of 2016 since the recovery of advertising activity last summer. All the indicators show growth: the number of active advertisers, the number of advertising campaigns and the size of the budgets. Total budgets for media advertising increased by 133%, the number of advertised brands by 29%, and advertising campaigns - 60% compared with the first half of 2015.

Internet advertising is growing actively in Ukraine: Brands increase

their budgets

Source: https://goo.gl/fV9HVH

25

According to Nielsen Dining-out trends research Ukrainians, as well as Europeans, prefer to eat at home. Fair price, service and quality of food are the main factors taking into account while choosing the place for eating out

Ukrainians rarely eat out of home

Source: https://goo.gl/K4qSI2

Global Health and Ingredient-Sentiment claims, that 70% of Ukrainians try to control their food ration for healthy life. Every third Ukrainian adheres to a diet

Ukrainian consumer prefers natural products

Source: https://goo.gl/iLhs7F

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