digital market news, insights, trends

1. RAZOM DIGITAL DIGEST
№1
December 2017

2. There is no universal promotion strategy in digital - each campaign requires a
personalized approach.
In this digest we concentrated on digital audience features and new opportunities
for building an effective contact.
Kateryna Denisova, Digital Strategist, razom communications
In 2017 digital has ceased to be an experimental media for most advertisers. For
the last 5 years, marketers had time to try, fill the first bumps, become disappointed,
understand the intricacies, become inspired, and make a meaningful choice in favor
of digital in the media mix. Therefore, it is not surprising that digital remains the
fastest growing media, and will reach 5.7 billion UAH (+30%) * in 2018 .
Mila Krutchenko, Chief Digital Officer, razom communications
“
“
2* forecast all-Ukrainian advertising coalition

3. 3
CONTENTS
1. DIGITAL AUDIENCE is not homogeneous
2. MOBILE changes media consumption
3. VIDEO draws attention
4. ADVERTISING should be smart

4. DIGITAL AUDIENCE IS NOT
HOMOGENEOUS
4

5. 5
INTERNET PENETRATION IS STEADILY GROWING. 7 OUT OF 10 UKRAINIANS ARE CONNECTED
85%
-4% vs 2016
78%
+1% vs 2016
71%
+5% vs 2016
53%
+0% vs 2016
50%
-4% vs 2016
TV ООН Internet Radio Press
Source: TNS Ukraine, all 12-65, cities 50K+,
MMI 2016/1+2016/2-2017/1+2017/2

6. TV-centricDigital-centric Multiscreen
0
20
40
60
80
100
120
140
160
0
10
20
30
40
50
60
70
80
90
100
12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64
Минутвдень
Охват,%
Возраст
Internet TV Min per day (Inernet)
YOUTH PREFERS INTERNET, WHILE OLDER AUDIENCE STAYS WITH TV
6Source: TNS Ukraine, all 12-65, cities 50K+,
MMI 2017/1+2017/2 ; Daily consumption of Internet and TV

7. 3 TYPES OF AUDIENCE: DIFFERENT GENERATIONS = DIFFERENT MEDIA HABITS
7
Under 25 y.o.
2,74 mio
91% in Internet
25-37 y.o.
4,12 mio
86% in Internet
Older than 37 y.o.
7,2 mio
55% in Internet
* Under 25 years old - 12-24
Older than 37 years - 38-65
Source: TNS Ukraine, all 12-65, cities 50K+,
MMI 2017/1+2017/2

8. SMARTPHONES
PENETRATION KEEPS
GROWING: +9% (43%)
63%(+10%)
57%(+7%)
29%(+9%)
Source: TNS Ukraine, all 12-65, cities 50K+,
MMI 2016/1+2016/2-2017/1+2017/2
8

9. 3G SHOWS EVEN
FASTER GROWTH: 11%,
EACH 3RD UKRAINIAN
HAS MOBILE INTERNET
ACCESS
43%(+12%)
38%(+14%)
17%(+9%)
Source: TNS Ukraine, all 12-65, cities 50K+,
MMI 2016/1+2016/2-2017/1+2017/2
9

10. IN AVERAGE
UKRAINIANS HAVE 1,4
INTERNET ACCESS
POINTS
2,9
2,3
1,0
Source: Consumerbarometr 2017, TA: 16-24, 25-34, 35+ years old, Ukraine 10

11. YOUTH IS MOBILE CENTRIC
11– Source: Consumerbarometr 2017, TA: 16-24, 25-34, 35+ years old,
Ukraine, Smartphone users
Search
Social
Networks
Product
infoVideo
GamesPurchases
PREFER TO DO WITH A SMARTPHONE:
Social
Networks
Video
Search
PC-centric
consumption

12. 12
FOR YOUTH MOBILE IS A UNIVERSAL LIFE-TOOL
New on-the-go connections for
more relevant content
Location based
marketingSocial Impact
New way to generate and
amplify moments of sharing
Personal relevance
New opportunities to build more
meaningful contacts

13. 25-37 SEEM TO FOLLOW YOUNG TRENDSETTERS
13
Digitally-native audience:
• Set the trends,
• Create content
• Mobile-centric
Digitally educated audience:
• Adopt trends
• Multiscreen
• Appreciate useful and actual
content
Digital is second media
• Don’t create content but use it
• Prefer PC
• Digital is already trustworthy
information source
PIONEERS
INNOVATORS
MAINSTREAM CONSERVATIVE IN MEDIA
CONSUMPTION
Under 25 y.o.
2,74 mio
25-37 y.o.
4,12 mio
Older than 37 y.o.
7,2 mio
Source: TNS Ukraine, all 12-65, cities 50K+,
MMI 2017/1+2017/2

14. MOBILE CHANGES MEDIA
CONSUMPTION

15. MOBILE IS ONE OF THE KEY DRIVERS OF MARKET GROWTH
AND HAS ALREADY BEEN ESTIMATED AT 425 MILLION UAH
48%
16%
4%
23%
9%
2018
Share of budgets for digital tools
Other Digital
Video
Sponsorship
Banner ad
Search
Share of Mobile in each tool budget
55%
50%
20%
35%2016 vs 2017:
Investments in Mobile grew by
70%
Source: forecast all-Ukrainian advertising coalition 15

16. 16
PASSIVE CONTENT BROWSING IS ACCOMPANIED BY AN ACTIVE MOBILE BROWSING
PASSIVE VS ACTIVE
MOBILE
TV/PC
First
screen
Second
screen
70%
of TV audience in prime
time is diverted to
other devices
Source: research by TNS Ukraine

17. APPLICATIONS ARE
THE MAIN DRIVER FOR
SMARTPHONE USAGE
80%
of time in smartphone
Source: research by TNS Ukraine, Сmeter 2017
Smartphone users
17

18. Source: Сmeter 2017/11
TA: 16-55, Smartphone users
MESSENGERS AND SOCIAL NETWORKS HAVE PENETRATED ALMOST
ALL SMARTPHONES IN UKRAINE
Viber and YouTube
are the permanent leaders.
But each TA has relevant applications
exactly for them
95% 85%
TOP-5 application categories
Browser 98%
Messengers 97%
Social Networks 89%
E-commerce 67%
Banking 64%
18

19. Source: Сmeter 2017/11
TA: Smartphone users
INSTAGRAM AND INNOVATIVE MESSENGERS
ARE A NEW WAY OF COMMUNICATION BETWEEN YOUNG PEOPLE
74%
44%
Now on the same level
with Facebook and
Vkontakte
Ousted Skype from
the TOP-10
On average they use fewer
applications
47%
47%
Entered the TOP-10 and
compared with Facebook
Messenger
Most active users
5 TOP applications are
used as actively as by
other TA groups
19

20. 20
MOBILE FORMATS GIVE NEW OPPORTUNITIES FOR QUALITY CONTACT WITH TA
Motion / manipulation
sensitivity
3D
recognition
Voice
control

21. VIDEO DRAWS ATTENTION

22. VIDEO IS THE MOST POPULAR FORMAT
22Source: CISCO forecast, Infographics Filmora
82%
of all consumed content on the Internet will
be in video formats by 2020
90%
of shared content in 2017 happened on
video
of consumers would prefer to watch live video from the brand,
than to read its post80%

23. 48%
16%
4%
23%
9%
2018
Share of budgets for digital tools
Other Digital
Video
Sponsorship
Banner ad
Search
INVESTMENTS VOLUME IN ONLINE VIDEO IS ALREADY EQUATED TO TV SPONSORSHIP
+82%
vs 2017
Source: forecast all-Ukrainian advertising coalition
Video volume in 2018 is estimated at
1300 mio UAH
Digital video base now includes YouTube and
mobile traffic. It gave a technical growth by 82%
23

24. 24
95%
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
jan feb mar apr may jun jul aug sep oct nov dec
Video sold-out
2015 2016 2017
VIDEO INVENTORY IS LIMITED AND THE DEMAND FOR IT IS NOT. WE EXPECT 30% INFLATION *
Source: razom digital expertise, internal data of sales houses 2015-2017, https://kwendi.net/news/193
* For licensed video inflation will be even higher– 52%

25. 3 OUT OF 5 USERS
CAN BE REACHED BY
VIDEO ADVERTISING
Source: TNS Ukraine, all 12-65, cities 50K+,
MMI 2017/1 + 2017/2, Internet users
69%
64%
56%
25

26. SCREEN, PLATFORM AND FORMAT SHOULD BE CONSIDERED
DURING VIDEO PLANNING
Ultra-short
bumper ad
Short-form
On demand
Long-form
On demand
Short-form
Broadcast
Vertical video
is in priority for mobile-
viewing
26

27. 27
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
In bed in the
morning
Early morning During
breakfast
Late morning Afternoon
before lunch
time
At lunch time Afternoon Early evening During dinner Late in the
evening
In bed in the
evening
Video from smartphone during the day
25- 25-34 35+
MOBILE VIDEO WATCHING DOES NOT DECREASE DURING ALL DAY.
ON-THE-GO CONNECTION IS SUFFICIENT
58%
Online Millenials watch videos
on smartphones at least as
often as on a PC
Source: consumerbarometer 2017, TA: 16-34, Internet users;
Cmeter Research 2017, TA: all 12-65, watch online video

28. VIDEO IN FACEBOOK IS IMPORTANT COMPONENT OF DIGITAL STRATEGY IN 2018
28
Live video.
Audience spends 3 times more time watching
Live video than standard video
Video posts have 135% more organic
reach than photo posts
Subtitles help to watch Facebook video
when the sound is off and increase the
viewing time by an average of 12%.
Source: Facebook research, Mediative 2017

29. BOOM OF VIDEO BLOGGING: REACH OF YOUTUBE-CHANNELS
IS COMPARABLE TO THE TOP UANET SITES
29
UKRAINIAN VIEWERS INTERESTS:
Cartoons
Vlogger’s content
Streams, passing games
Shows and TV content
VIDEOZHARA IS A NEW FEST FOR VLGGERS
AND THEIR FANS:
2016-2017 statistics
Source: socialblade 2017/11, AIR data

30. ADVERTISING SHOULD BE
SMART

31. Source: Yankelovich 2007, Hubspot Research 2016, PageFair Mobile Adblocking
Report 2016, eMarketer April 2016
AD NOISE
Urban consumers are exposed to
over 5000 ad messages per day
AD BLOCKS
At least 419 million people are
blocking ads on the mobile web
because they find ads annoying
(64%) and disruptive (54%)
ADSEDGED OUT
Ad-free premium offers are on
the rise with 75 million Netflix
subscribers in 130 countries
31
THE ROUTE TO THE AUDIENCE IS MORE COMPLICATED

32. IT’S IS NOT A SECRET THAT THE AUDIENCE IS EAGER TO SKIP ADVERTISING
32
7,45,5
for 15-sec. videos for 30-sec. videos
Average # of seconds prior to skip
65%
35%
Completion lvl
Skipped Completed
Source: MAGNA/ (Mobile/PC)

33. 30%
21% 6%
14%
16%
25%
North
America
Europe Dev Asia
Latin
America
MEA Em Asia
18%
World Ukraine
21%
Source: Ad Blocking report
EACH 5TH USER IN UKRAINE HAS AD BLOCK
AND THIS FIGURE WILL GROW
33

34. Impact of Skipped Ads on Brand Recall
BUT AUDIENCE REMEMBERS THE BRAND EVEN WHEN SKIPPING AD
34
+10%
+22%
+45%
+72%
UNAIDED BRAND RECALL AIDED BRAND RECALL
Skipped Completed
Source: MAGNA/ (Mobile/PC)

35. A 6 SECOND AD ON ITS OWN HAS IMPRESSIVE VALUE COMPARED TO A SKIPPED AD
35
+22%
0%
+5%
+47%
+12% +11%
Aided Brand Recall Brand Favorability Purchase Intent
Impact of 6 Second Ads on Brand Metrics
Skipped Ad
6 Sec Non-Skippable Ad
On average 6 second
ads tend to be more
cost efficient in auction
than traditional
skippable video or long-
form ads
00:06 SEC
Source: MAGNA/ (Mobile/PC)

36. Such formats have a high image effect and positively influence on brand perception
WOW-FORMATS HAVE NOT YET REALIZED THEIR POTENTIAL
36
http://weboshowcase.com/#richmedia/963/WoW-preroll/Zoomby_ru/Solpadeine-wow-rollhttp://weboshowcase.com/#richmedia/1298/HPTO/Persgroep/Mastercard-Safety-Security-HPTO-Parool
References

37. “By 2020, on average, people will
communicate more with bots than with their
spouse”
CHAT-BOT IS AN UP-TO-DATE AND BRAND-USED TOOL. THIS IS NOT AN INNOVATION ANY MORE
37Source: Gartner, Seedstars CEE Summit 2017
“20 bots are launched in the world daily”
Bots are becoming smarter and able to replace the human resource
in various spheres of life.

38. 38
Voice search is the natural evolution of a text search
The technology has existed for more than a decade, but only now it has developed enough for
commercial use.
THE DEVELOPMENT OF AI OPENS UP NEW OPPORTUNITIES FOR BRANDS
Bots are tested in the Ukrainian business:
The voice bot Alla served 3 million calls to the contact center of Alfa
Bank for the last year..
And here voice-bots are very cute arguing with each other  https://www.youtube.com/watch?time_continue=1&v=d1CRGkDgrrQ
Source: Mediative, TNS 2017,
alfabank.ua/ru/about/press/na-sajti-alfa-banku-ukrayina-zapusheni-novi-onlajn-kanali-dl-2205
CМeter plans to start measuring
bots in Ukraine starting 2018

39. www.rzm.com.ua
LET’S
CELEBRATE
FUTURE
Mila Krutchenko
CDO razom communications
@:
Mila.Krutchenko@rzm.com.ua
m: 098-458-6630