RUSSIA FORUM BUZZ. Media: Internet and Advertising Spend


Mark Opzoomer: The Russian internet industry is in solid shape. 30% of adults in Russia regularly spend time online compared to 50-60% in more mature economies. The Russian internet market is the fourth largest in Europe by size. Advertising revenues have been growing strongly in recent years. Despite a temporary pause caused by the economic downturn, growth in revenues is likely to resume in the medium term.

Arkady Volozh: Yandex’s revenues totaled $300m in 2008, up 80% y-o-y, with 85% of this amount derived from contextual advertising. Text-based advertising is becoming increasingly attractive, not only among small and medium-sized businesses, and it is the last expense companies would consider cutting in a crisis. Search traffic continues to grow in volume, but its impact on revenues has yet to be seen.

David Waroquier: The economic crisis in Russia does not mark the end of the era of venture funds, but instead presents an opportunity that should not be missed. There are many interesting start-ups, both globally and in Russia, that will survive and prosper if they manage to receive financing.

Nikita Sherman: Social networks have been booming in Russia, as they have worldwide. Odnoklassniki.ru has registered 30m users compared to some 50m by its American prototype, Classmates.com. Last year, Odnoklassniki.ru started to generate revenues, with around 50% coming from advertising and 50% from premium paid services. The biggest threat to the Russian internet is the slowing of infrastructure development in the regions, which might put a cap on penetration growth.

Demyan Kudryavtsev: The media industry has been dealt a blow by the crisis. At least three of the ten largest media companies in Russia could disappear in 2009. At the same time, the internet industry is expected to emerge much stronger from the crisis, as a greater share of budgets will be allocated to online platforms. PH Kommersant generates 9% of its revenues from online projects, with its total revenues reaching $129m in 2008.

Arsen Revazov: The crisis will provide an opportunity to make the online advertising market in Russia more transparent and appealing for large advertisers. Advertisers have become more sophisticated in their search for quality sites and content, and this will benefit internet companies focused on quality rather than building traffic. Context advertising will outpace the rate of growth in media advertising. Growth in ruble terms might reach 15-20% in 2009.

Vladimir Dolgov: Google has expanded to Russia because it sees great potential for the market. Many practices that are standard for the internet business in other countries do not work in Russia, and for this reason Google must adjust its products, business models and payment methods accordingly.

PANEL:

Anton Nosik, Editor-in-Chief, BFM.ru
Vladimir Dolgov, Chief Executive Officer, Google Russia
Demyan Kudryavtsev, General Director, PH Kommersant
Mark Opzoomer, Chief Executive Officer, Rambler Media
Arsen Revazov, Co-founder, Chairman of the Board of Directors, IMHO VI
Nikita Sherman, President, Odnoklassniki.ru
Arkady Volozh, Chief Executive Officer, Yandex
David Waroquier, Principal, Mangrove Capital Partners

Troika Dialog

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