Russia is undergoing radical transformation these days, growing ever-wealthier and increasingly opening up for international trade and collaboration, most noticeably demonstrated by last year’s accession into the WTO after 18 years of negotiation.
While a multitude of factors are contributing to the rapidity with which Russia is transforming, at the root of it is a dramatically changing media landscape where the internet is spreading like a wildfire meanwhile state-run TV channels (and TV in general) are decreasing in importance and influence.
The precipitous rise of the Russian internet is, quite frankly, breath-taking, and last year’s announcement that Yandex had surpassed Russia’s largest TV station, Pervy Kanal, in terms of monthly visitors definitively put the last bit of doubt concerning the Runet’s exponential growth into demise.
The writing is surely on the wall! As Russians flock to the internet, so will advertisers.
While TV remained the by distance biggest medium by ad spend in 2012, according to the Communications Agencies Association of Russia, the leading players in that category will soon see their previously so impenetrable kingdom be overtaken by Yandex.
This became clear when Pervy Kanal this week released its financial results for 2012, demonstrating yearly ad revenues of 28.2 billion Rubles ($896 million). This is only marginally higher than the 28.1 billion Rubles reported by Yandex for the full year, and with internet penetration marching on unimpeded, coupled with advertisers increasingly finding value in the digital medium, it’s only a matter of time before Yandex becomes Russia’s largest advertising platform – across all media!
That said, it seems it will take some time for online to surpass TV as a whole in Russia, as can be seen below. This in turn demonstrates Yandex’s extremely dominant position on the Runet, where it earns an impressive 1 in 2 Rubles spent on online advertising.
Source: Own Elaboration, Data by CAAR
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