Media Market Digest July 2016

2

TV

Grew by 6% vs Jan-Jul’15 Price for commercial will

increase for 2-3 more years p.3-10

Radio

Twice increase vs Jan-Jul’15 Results of the second wave of

radio listening survey p.26-27

Research & Trends Smartphones usage in Ukraine

research results How do Ukrainians purchase

online? p.28-33

Digital ¼ of users watch YouTube

more than TV in UA

Instagram launches business-profiles with analytics in UA p.11-17

OOH

Growth by 21% vs Jan-Jul’15 The absolute leader in sales

remains Lviv with 94% sold-out

p.18-23

Print

Moderate increase by 16% vs Jan-Jul’15

p.25

LION White Rock rocks on Coub.com

Cases

ZOU Campaigns

p.34-35

3

Jan-Jul’2016 in term

of WTRP’s vs Jan-

Jul’2015

4 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 88% In Jul’2016

The dynamics is typical for pre-crisis

years

Jul’16 vs Jun’16

Olympic Games in 2016 were watched in

average 2 times worse* than in 2012

in WTRP’s

* In terms of Average Audience

159,6

58,6

46,4

38,4

32,9

28,1

27,5

25,2

22,7

20,7

Pharma

Food

Telecom

Hygiene

Cosmetics

Trade

Cold AFB

Confectionery

Entertainment

Auto

13%

11%

13%

29%

128%

11%

29%

20%

-3%

-3%

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

Processed by “CCM” Subsidiary Enterprise

Pro-Pharma activity increased, but that didn’t stop Pharma activity decline vs June

Pharmak ensured category growth vs 2015

Myronivsky Hliboproduct(Nasha Ryaba) activity fall was the main driver of Food category reduction vs prev. month

Johnson & Johnson activity drop caused the Hygiene activity decrease vs prev. Month

Renault activity decrease became the main driver of Auto category drop vs prev. month

7%

43%

4%

-2%

-16%

-2%

-5%

-15%

-23%

-26%

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

25,3

23,5

20,9

18,3

16,7

14,6

13,7

13,0

12,8

12,0

Nestle

Procter&Gamble

Pharmak

Reckitt Benckiser

L'Oreal

Vodafone

Kyivstar

Ukrnafta

Unilever

Danone

46%

35%

10%

126%

15%

8%

216%

-12%

-3%

-21%

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

Processed by “CCM” Subsidiary Enterprise

66%

84%

4%

8%

52%

-19%

-26%

-44%

-25%

-19%

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

Vodafone was the main driver of Telecom category drop vs prev. month while Kyivstar drives category growth vs prev. year

Procter&Gamble activity increase in July provided Detergent category growth vs prev. month

Unilever caused Perfumes category decrease vs. 2015

The main drivers of Advertiser in category drop were Axe, Dove and Rexona

Mondelez rose its activity in July, that had a positive impact on Confectionery category growth

7 Andrew Partyka, CEO of StarLight Sales, summed up first 6 months of the year, noted TV commercial market resumption and told about new working conditions with advertisers since autumn 2016.

Andrew Partyka: price for commercial will increase for 2-3 more years at least

Source: http://goo.gl/jud6g8

7

8

Commercial TV-market is continuing its updating, it has increased by 40% during the first half-year 2016. This indicator will make 30% on results of the year according to the StarLight Sales assessment. This is 5 points higher than previous forecast, - the company said.

Market demand for TV commercial has increased by 5% (in WGRP’s), despite the prohibition of direct commercial of beer, that made 6,4% of demand in the last pre-crisis 2013 year (in WGRP’s). Such categories as cosmetics and hygiene, e-commerce, household cleaning, realty and jewelry showed the maximum growth in the first half-year 2016. Budgets and activity in key categories : pharma, foodstuffs and communication have increased. Auto category resumed its presence on the air.

Commercial TV-market has increased by 40 % during the first half-year 2016

Source: http://goo.gl/dVs4kr

Two core factors of market high growth in 1HY 2016: 1. High inflation imposed by TV sellers in 1HY and abnormal low cost in 1HY 2015 2. Turbulence in economy, rapid national currency devaluation in 1HY 2015. Advertisers planned activities very carefully, maintained locomotive brands

Current market optimistic development allows us to agree with Alliance annual forecast for market growth about +30%. Maxim Pozhar, TV Buying Group Head ZenithOptimedia Ukraine

TIC spread the statement about press conference «Changes in the universal program service - risks for the information security of Ukraine», that was convened by Telecommunication Chamber of Ukraine on July 20.

Statement of TIC: Telecommunication Chamber is covering business interests by national security protection motive

Source: http://goo.gl/Q5QZz8

Telecommunication Chamber convened press conference about the draft law №3504 «About bringing changes to the Law of Ukraine " About Television and Radio Broadcasting " (about clarifying terms of distribution of TV organizations programs which are in universal program service)» on July 20. The union of cable providers spoke out against the norms about levying payment for TV channels rebroadcasting.

Telecommunication Chamber spoke out against the payment for TV channels rebroadcasting

9

Source: http://goo.gl/xHO9gU

10

Source: http://goo.gl/nV9u2J

“1+1“ leads in three audiences at once in MB Top Channel research according to first half-year results. Also leadership left for the “Ukraine“ channel in one another audience . “1+1” has the most noticeable growth of share and “Inter” - the most noticeable fall compared to the same period of previous year.

Top-list of TV channels in first half-year: three times “1+1“ and “Ukraine“ channel

What do “ VOLIA“ subscribers watch: the company has summed up the

telemetry for the half-year

Source: http://goo.gl/hpmOTO

The largest provider of cable television is continuing to share information about TV preferences of their IPTV-subscribers . Here are data from «VOLIA» company for June. TOP-6 of broadcasters didn’t change again and coincides with «big six» of TV panel Nielsen− “1+1”, “Ukraine”, STB, ICTV, “Novyi Kanal “ and “Inter” channels. The leader of TV Viewing is still “1+1”, second position in the rating didn’t belong to STB this time, it belonged to the “Ukraine” channel, that is explained by “Euro 2016”.

11

35,0

30,2

25,4

25,2

22,3

22,2

21,2

18,6

18,2

16,5

Skoda

Beiersdorf AG

Fozzy Group

Nestle

Mondelez

Kyivstar

Mars-Wrigley

McDonald's

Metro

Pepsico

VOD TOP Categories

62,1

52,3

39,1

37,7

33,8

29,6

28,5

26,1

22,7

16,2

Trade

Confectionery

Alcohol

Auto

Telecom

Food

Cosmetics

IT

Restaurants

Hot Beverages

VOD monitoring includes HTML5 formats from the middle of March which caused technical growth of Impressions monitoring data is not stable

12

VOD TOP Advertisers &

Source: Communication Alliance, represents 20%-25% of all video ad. Impressions, Mln. Data

processed by “CCM” Subsidiary Enterprise

13

Carlsberg Group

Nestle

Citrus

Douwe Egberts

Kyivstar

Reckitt Benckiser

Wargaming

Mondelez

Unilever

Hyundai KIA AG

Alcohol

Trade

Entertainment

Culinary

Telecom

Auto

Hygiene

Cosmetics

Hot Beverages

Confectionary

Q2 2016

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

Q2 2016

TOP Categories TOP Advertisers & VOD

Marketers look for marketing opportunities in the Pokémon Go

phenomenon

A week since its launch, the game of finding imaginary creatures in the real world has turned augmented reality into a major marketing tool. Game owners plan to launch “sponsored locations” soon, so that brands can pay to put their names on valued destinations that players seek. Already, businesses can buy virtual Lure Modules that attract Pokémon — and, the businesses hope, will also attract players.

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Source: http://goo.gl/Y2XBDF

While it's difficult to predict the virality and success of any content, we often find that the truly successful have many elements in common, and Pokemon Go has hit on all of them: a) build emotional connection with your target consumer; b) consumer-focused (it's easy to use); c) visibility (you see them everywhere); d) social element (relate to themes going on in the real world); e) headline-worthy (build shareable content that creates social conversation).

Maryna Grygorenko, Digital Director ZenithOptimedia Ukraine

YouTube usage growth rates higher in Ukraine than globally: time of watching videos increased by 70% for a year. According to the survey YouTube Audience Profiling Study 2016, 26% of Ukrainians aged 25 to 44 watch YouTube more than television. 83% of Ukrainian users visit YouTube at least once a month, and 55 % of them - everyday. A half of video views are on mobile devices.

15

A quarter of users watch YouTube more than TV in UA

Source: http://goo.gl/tdLC66

Why Youtube stars are more influential to Millenials than traditional celebs

Source: https://goo.gl/DBLbb8

For millennials who spend a lot of time watching online video, YouTube creators are more influential than traditional celebrities. Google presents comparison of YouTube stars to the influence of stars of TV, film, sports, music, and more

IAB’s released the first report offers some new insights into what it will take to keep people away from ad blockers. The survey included ~1,300 computer users and 200 mobile users over six months in the US, including those with and without ad blockers. According to the study: 26% actually have blockers, 37% of users haven’t used blockers, 20% are ex-ad blockers, and 17% are thinking about getting an ad blocker. In other words, about three-quarters don’t currently use blockers.

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IAB:’s Ad Blocking: Who Blocks Ads, Why, and How to Win Them Back

Source: http://goo.gl/h8DNQM

Facebook: Showing You More Personally Informative Stories

Source: http://goo.gl/uPycgN

Facebook has introduced an additional signal for ranking of newsfeed. It will learn to determine automatically which stories would be the most interesting to the user. The ranking will use Feed Quality Program, which includes global crowd-sourced surveys of tens of thousands of people per day, as well as people who answer more detailed questions about what they like seeing in their feeds.

MyTarget proposed new type of advertising – pre-roll. Which can place in social networks «Odnoklassniki», «MyMail.ru» and others Mail.ru projects.

17

myTarget will launch video automatized purchase in the pre-roll on

Mail.Ru Group projects

Source: http://goo.gl/nFUt9n

Instagram launches business-profiles with analytics for Ukraine

Source: http://goo.gl/ewOhe8

Now brands can turn personal accounts into business profiles and get access to new Instagram business tools, first of all – Insights – that give businesses actionable information about who their followers are and which posts resonate better than others.

18

16,0

13,3

12,2

7,6

6,7

6,7

6,6

6,1

5,6

5,5

Fozzy Group

Epicenter

Sport Life

Lifecell

Vodafone

Riel

Samsung

Privatbank

Metro

Allo

50%

5%

14%

43%

27%

-13%

-15%

-3%

-17%

TOP Categories

146,5

94,5

58,5

45,6

30,4

23,3

19,0

18,5

16,2

14,1

Trade

Realty

Entertainment

Auto

Telecom

Finance

Sport

Restaurants

Medicine

Tourism

15%

54%

25%

49%

0%

16%

17%

29%

61%

-5%

Epicenter and Fozzy Group activity decreased, but that didn’t stop Trade category growth vs prev. month

Al'fa-Bank was the main reason of Finance category drop vs prev. month, while UniCredit Bank ensured decrease vs 2015

Sport Life drove Sport category growth vs prev. month and vs prev. year

McDonald's was the leader by growth in Restaurants category

2016 vs 2015

19

2016 vs 2015

TOP Advertisers &

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

Enterprise

20

The market of out-of-home advertising in the first half of 2016

Source: http://goo.gl/QBxZJF

OOН native advertising at the Kyiv International Airport

Source: http://goo.gl/xyTNUh

Two modern, stylish and symbolic capital entities — a residential complex Skyline and Kyiv International Airport, together with progressive advertising vision of the company Amstar and the professionalism of the operator RTM-Ukraine has created a entire and native advertising on the front of the Terminal A.

Traditional market survey out-of-home advertising is dedicated to the data of the first half of the year 2016 as well as compared to the period January-June 2016 to the same period last year.

The absolute leader in sales remains Lviv with 94% sold-out of commercial placement, despite significant inflation of rent in June 2016.

We recommend to start reservation for this year as soon as possible. Especially if we are talking about Western region.

Olga Muravyova, Head of buying department ZenithOptimedia Ukraine

Service open data helps each active citizen to know who is the owner of advertising designs, check the legality of their location marked on the map service, and create an e-mail appeal for the elimination of violations.

21

The opportunity to manage advertising was given

in Kiev

Source: http://goo.gl/TLm1hk

There was a provocative advertising of Belarusian vodka in Germany,

Advertising is intended to inform you that the brand does not follow Russian standards when it comes to equal rights for homosexuals.

Source: http://goo.gl/0xI0Z4

22

Source:: https://goo.gl/A0chRp

Moving Walls looks to educate Malaysian advertisers Moving Walls Malaysia has launched a new campaign, Lookup Lah, which hopes to educate Malaysian advertisers on the importance of investigating marketing data and figures found online.

Source: http://goo.gl/QYydKd

Renault has learned to recognize the cars to show targeted ads on the roads On a billboard in West London are cameras that respond to the make, model and color of the car. Passes by the driver of the vehicle brand advertising will see the new Renault Megan.

23

http://goo.gl/FTQyLi https://goo.gl/BUHElZ

http://goo.gl/1DFlKD http://goo.gl/bDpNU7 http://goo.gl/swQI1W

Advertising agency Happiness, Brussels advertised yield on the screens of the second part of the fiction film by Roland Emmerich original outdoor advertising.

http://goo.gl/efXFXl

Startup Debuts Digital Billboards with User-Generated Content to Sell Real Items from Real People in Real Time–All Within 5miles.

The creators of World of Tanks branding of the airplane in the style of the game.

Out of Home enjoys a symbiotic relationship with Twitter, and has much in common.

Operator of out-of-home advertising Ocean Outdoor intends to develop a new strategy for advertising on digital-screens at Piccadilly Circus in London.

Advertising Tomb Raider video game with real people on a billboard won the festival "Cannes Lions" 17 awards, including five Gold Lions.

24

15,3

7,8

6,1

6,0

5,1

4,2

3,7

3,6

3,4

3,3

L'Oreal

Seldiko

Olaynfarm

ChaneL

Hexagone

Fitobiotehnologii

Procter&Gamble

UkrainianNational Lotery

Burda

Pandora

57%

10%

39%

176%

191%

-47%

-33%

TOP Categories

49,0

42,9

42,8

39,6

21,2

20,8

11,8

11,8

11,7

8,8

Trade

Entertainment

Cosmetics

Pharma

Wear

Auto

Perfumes

Jewellery

Finance

Alcohol

21%

40%

71%

76%

21%

12%

-3%

-10%

-13%

-29%

Toyota activity increased, but that didn’t stop Auto activity decline vs prev. month and vs prev. year

Artek - Bukovel' rose its activity vs prev. year, that had a positive impact on Tourism category growth

Procter&Gamble activity drop didn’t stop Cosmetics category increase in 2016

Calzedonia and Philipp Plein activity fall caused the Wear activity decrease vs prev. month

2016 vs 2015 2016 vs 2015

TOP Advertisers &

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

26

15,5

14,7

10,0

9,5

6,9

6,0

5,9

5,7

5,6

4,3

BayaderaLogistik

Natur Produkt

Victor & Co

Get'man

Zolotiy vik

Megapolis

Poltava Distillery

Russkoe radio

MobilLuck

UkrainianNational Lotery

7%

31%

61%

47%

524%

100%

TOP Categories

48,5

46,6

31,9

25,0

18,7

18,5

13,1

8,2

7,8

7,7

Alcohol

Entertainment

Trade

Pharma

Food

Auto

Realty

Jewellery

Finance

Education

75%

112%

47%

104%

29%

48%

103%

Umanpivo was the main reason of Alcohol category growth vs prev. month, while Getman ensured growth vs 2015

ProStor became the main driver of Trade category increase vs June

Realty category increased thanks to ORBI GROUP activity growth

Twin Tower project advertising was launched in July

2016 vs 2015 2016 vs 2015

TOP Advertisers &

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

"Arta Plus“ was given the permission to broadcast in Donetsk region at a frequency of 88.4 MHz

One more radio station was allowed to broadcast in the ATO area

Results of the second wave of radio listening survey are now available. Undisputable leaders of the first two quarters of 2016 were “Hit FM”, “Chanson”, “Lux FM”, “Retro FM” and “Russian Radio Ukraine”.

27

The more income Ukrainians have, the more actively they listen to the radio

Source: http://goo.gl/e0MqxC

Source: http://goo.gl/5cceJV

“Hit FM” is a radio station with the favorite songs of the youth. They grew, studied, fell in love with this songs. And now these people became the foundation of today's most solvent audience and, therefore, the most interesting for advertisers.

Vasiliy Kozhemyakin, Senior expert on media planning Publicis One Ukraine

28

Based on the advertising market dynamics during the first half of the year Ukrainian Advertising Coalition traditionally holds an expert survey to clarify their forecasts for the advertising and communication market in Ukraine. As a result advertising market is growing much faster than expected at the end of the previous year. The forecast was revised from 12% to 21% growth of investments. All media except Print are going to show growth in 2016.

29

Ukrainian Advertising Coalition specified forecast of the advertising market volume in Ukraine in 2016

Source: http://goo.gl/PKSzzB

According to StarLight Sales, TV advertising market is going to grew by 30-35%. At the end of the year Sponsorship growth rate is going to be 80%. Media market is recovering faster, than Advertising Coalition predicts.

StarLight Sales: Media market is growing faster, than Advertising Coalition predicts

Source: http://goo.gl/QIPsT3

The economy is steadily overcoming the crisis in spite of quite unstable political environment. One of the key signals of situation improvement within the advertising industry is high demand within attractive segments of the market. The UAC forecast may be revised ones or several times in case such level of demand remains till the end of the year. The negative side of such situation is a risk of quality placement deterioration and growth of the cost. In such situation accurate budget planning is the major solution in order to avoid mentioned risks.

Vyacheslav Levchenko, Media Director ZenithOptimedia Ukraine

Nazar Grynyk, mobile marketing expert, presented the results of the study: how smartphones and mobile applications in Ukrane are used, expectations of mobile advertising and why does Pokemon Go conquer the world. Compared with the last year the number of smartphone users has increased by 22%. 33% of all Internet traffic is generated by mobile devices in Ukraine and only 1-2% of media budgets are invested in mobile advertising.

30

Smartphones usage in Ukraine research results

Source: http://goo.gl/zLqpBp

H1’2016 results: budgets, ad formats and forecasts. Volume of mobile budgets rose by more than 4 times compared with the same period last year. The leaders were FMCG advertisers (28,7% of all mobile advertising).

Mobile advertising in Ukraine analysis

Source: http://goo.gl/BV41C5

31

Ukrainian consumer is recovering According to The Nielsen Global Consumer Confidence and Spending Intentions Survey, Consumer Confidence Index in Ukraine in the Q2’2016 rose by 6 points and reached Q4’2014 level. Global Consumer Confidence Index is stable.

http://goo.gl/YhzFB9

http://goo.gl/bwQ05V

http://goo.gl/2ou1nK

http://goo.gl/x5hL9J

Goods under supermarket brands are not popular among Ukrainians Ukraine occupies the last place in Eastern Europe in the popularity of goods under supermarkets brands. One of the main reasons - lack of shops trading network, reported delo.ua.

The share of promo sales in Ukraine is growing According to Nielsen Promo Pressure report, share of product categories sales through promotions in retail chains in Ukraine in Q1’2016 reached 27%, that is 10 pp higher than the same period in 2015.

72% of Ukrainians consider themselves as poor The share of Ukrainian households identifying themselves as the poorest part of the population, increased in 2015 by 1.3 times compared with 2008, from 56.9% to nearly three-quarters - 72.3%.

32

According UADM estimation, e-commerce total market volume was $1.1 billion in 2015. 17% of Internet users (it is about 3.7 million people) made purchases in online stores.

Ukrainian e-commerce market trends

Payment system WayForPay conducted research about online payments with an emphasis on the mobile purchases. Number of payments through mobile phones has reached 18% (compared with 11% in 2015).

How do Ukrainians purchase online?

Source: http://goo.gl/LsmD6B

Source: http://goo.gl/xmbrGP

33 * Click on the image works as direct link to the Source

How Consumers

Buy Brands: The new decision journey

34

Target

Media

Tools

Decision

Period

Summary

&

Results

35

LION White Rock rocks on Coub.com

Provide audience engaging brand experience to launch LION White Rock

Target

Coub.com Media

June 06, 2016 – July 06, 2016 Period

Branded page on coub.com with contest Through integration of media insertions in Display & VOD Ad, Coub video Ad invites to Coub brand page where user can find video produced by users and create their personal variant.

First in Ukraine branded Coub page to rock TA To involving target audience and integrate brand’s communication message into UGC – UCG is a trend among TA. Users generate content on branded page and via voting we had choose the winners.

Recoubs: 632 Likes: 2 480

Unique users: 28 085 Coub views: 635 160

Post Effect – one of the winners place the photo with wined countlines as the cover photo on his Coub-channel.

36

Thank You!