CTC Media outlined changes to its advertising sales structure in 2011. It established an internal sales house called Everest Sales to handle up to 96% of national and regional advertising sales directly with Moscow-based clients. Regional advertising sales to local clients would be handled by Video International subsidiaries, accounting for no more than 4% of sales. The new structure aimed to give CTC Media more control over the sales process while lowering costs. CTC Media was confident in the success of this new sales model due to its strong sales team, established advertiser relationships, incorporation of best practices, and continued partnership with Video International.

1. 2011 Capital Markets Day
New Advertising Sales Structure
Yulia Moskvitina
Chief Commercial Officer

2. Strong Track Record of Advertising Revenue Growth…
US$ mln 75.8
75 8 48.7
424.9
215.4
40.9
40 9
16.6
2005 2010 2005 2010 2008 2010
97% ad revenue growth 357% ad revenue growth 19% ad revenue growth
within 5 years since launch in 2005 since pre-crisis 2008
…by monetizing unique audiences which advertisers desire to reach
1

3. Growing Market Shares Through Increasing Combined Power Ratio
1.5x
power ratio
1.2x
12 19%
power ratio Complimentary channels in portfolio
12% 13%
Strong brands of CTC Media channels
g
10%
Audience quality
Bundled sales
2004 2010 Ad options beyond classic spots
CTC M di "All 4 " A di
Media 4+" Audience Sh
Share Highly
Hi hl professional t d marketing and
f i l trade k ti d
National Ad Market Share promotion to advertisers
Power ratio = National TV advertising
market share/All 4+ audience share
2

4. Stable Consumer Goods Client Base With Both Multi-National and Local Advertisers
Multi-
FY 20101
1 Food 26%
2 Cosmetics 19%
3 Other goods and services 13%
4 Pharmaceuticals and vitamins 10%
5 Appliances 7%
6 Telecoms 5%
7 Detergents
g 5%
8 Personal care products 5%
9 Beverages 4%
10 Beer 4%
11 Auto and finance 2%
100%
3

5. Russian TV Advertising Sales Structure before 2011
Advertisers
d e se s
Advertising Agencies 2 major sales houses:
Media Sales Houses: Fast evolutionary
development of recently
emerged TV ad market in
Video International Gazprom-Media / Alkasar Russia
CTC Media:
National ad inventory was
sold by VI since 1999,
regional – since 2006
4

6. Amendments to Advertising Law – A Challenge Turned into An Opportunity
November 2010 –
new agreement Quick d
Q i k and
July 2010 – with VI is signed decisive
decision on response to
internal regulation
sales house change led to
is made optimized sales
efficiency
Fall
F ll 2010 –
September start of
Spring 2010 2010 – negotiations with
– Booz&Co Everest Sales
was hi d
hired June-July
J J l is t bli h d
i established advertisers for
2010 – 2011
more clarity
about the
December 2009 – future
surviving the “first market
shock” structure
5

7. New Deal with VI Ensures Continued Support from the Largest Player…
Main
M i services and
i d • C
Compensation i l d fi d and variable elements
ti includes fixed d i bl l t
– complex structure
consulting • Effective VI compensation of 10-12% of total
g
agreement reported Russian advertising sales (13% previously)
Direct sales • 12% gross sales commission (15% previously)
agreement for • Commission will be netted off from revenues
regional sales to • Revenues from direct VI sales will not exceed 4% of
our total Russian ad sales
local clients
… and is accretive in terms of reduced cost of sales
6

8. Advertising Sales Structure from 2011
Advertisers
Advertising Agencies
Internal Sales Houses: Media Sales Houses:
Everest Sales RTR-Media Gazprom-Media / Alkasar Video International
7

9. Benefits of Internal Sales House
More control over
the sales process
Mastering Lower cost of
internal expertise
i t l ti sales as % of
l f
in direct sales revenues
Individual
Bundle sales with
approach to each
additional
client and
options, including
p , g
customized
non-FTA
offerings
Working directly
with advertisers
and media
agencies
8

10. 2011 Sales Structure: National & Regional Ad Sales to Moscow-Based Clients
Moscow-
CHANNELS
CLIENTS
Телеканалы -Advertisers
Ad ti
-Advertising agencies
Video International
Vid I t ti l
Up to 96% of Russian ad sales directly through Everest Sales
9

11. 2011 Sales Structure: Regional Ad Sales to Local Clients
CHANNELS’
Regional Stations
Телеканалы
Video International
Subsidiaries
Distribution of inventory between
Moscow-based and regional clients
Local sales
Sales directors of CTC
Signing deals with clients
Media regional stations
by VI local branches
1.Pre-sale
2.Control of the deals
3.Trade marketing g g
Regional sales to local
clients
Not more than 4% of Russian ad sales through Video International
10

12. What Gives Us Confidence in the Success of Our New Sales Structure?
Strong sales team
Established relations with major advertisers
We continue to build our sales capabilities
Incorporating best practices with the help of Booz&Co
Continued alliance with VI and benefitting from their expertise, IT
platform, back-office support and analytics
Three TV channels with complimentary audience profiles
11