This month’s topic: Rapid activity growth: beer category on the threshold of impending restrictions; mobile providers category - from 3G launch happiness.

TV MARKET. JUNE 2015

TOP categories • 13% activity decrease comparing to the same period

of last year;

• Following categories showed a significant growth: Communications, Trade and Computer Appliances;

• Pharma hold leadership position on TV;

• Cosmetics and Household Chemicals– – are the categories with the greatest decrease of activity compared to the same period of last year due to decline in investments by major international companies;

• Confectionary–decrease of activity due to decline in investments by big manufacturers, such as Ferrero, Mars and Wrigley, what is connected with boycott of Russian commodity.

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WGRP All 18-54 50k+

Jan-June’14

Jan-June’15 +/-

Pharma 166 874 171 143 3% Alcohol 142 078 90 543 -36% Products 61 305 64 694 6% Non-alcoholic beverages 52 967 55 331 4% Communications 32 482 46 728 44% Trade 26 956 46 289 72% Hygiene 46 725 30 148 -35% Confectionary 43 705 23 953 -45% Transport 19 871 16 974 -15% Cosmetics 33 837 16 715 -51% Finance 15 140 16 712 10% Household Chemicals 30 923 13 864 -55% Perfumes 10 039 9 284 -8% Household Appliances 7 692 7 710 0% Computer Appliances 2 915 5 185 78%

Source: Nielsen Ukraine, All 18-54 50К+, excluding social/political ad, entertainment and Mass Media

Trade: Rozetka.ua and Lamoda.ua are still

category drivers; products and household appliances also increased

Communication: Mobile providers continue active support of 3G Internet services

CHANGES IN TOP CATEGORIES. JUNE 2015

3 • Source: Nielsen Ukraine, All 18-54 50К+, excluding social/political ad, entertainment and Mass Media

Significant increase in January-June 2015 showed following categories:

+72% +44%

TV MARKET. JUNE 2015

TOP advertisers

• Beer companies ABI InBev and Carlsberg Group assumed the leadership, using season and last opportunity to talk about themselves without restrictions;

• Kyivstar and MTS – active promotion of 3G Internet services;

• Major international companies such as Kraft Foods, P&G, Reckitt Benckiser etc., continue investments reduction;

• Rozetka.ua – a local player with the most active

growth (in 13 times from 2014);

• Pepsico – a new player in the TOP 15 advertisers thanks to seasonal support of their Pepsi brand.

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WGRP All 18-54 50k+

Jan-June'14

Jan-June'15 +/-

Nestle & L'Oreal 38 440 40 306 5%

AB InBev 15 307 21 463 40%

Carlsberg Group 12 392 20 790 68%

Unilever 14 929 17 989 20%

Novartis 18 862 17 799 -6%

Farmak 16 849 17 351 3%

Mondeliz Ukraine (Kraft Foods) 19 409 17 269 -11%

MTS GSM 10 807 15 052 39%

Kyivstar GSM 10 279 13 497 31%

Rozetka.ua 968 13 232 1267%

P&G 28 878 12 540 -57%

Reckitt Benckiser 16 613 12 006 -28%

Sanofi-Aventis 8 615 11 828 37%

Pepsico 10 298 11 494 12%

Ukrtatnafta 14 513 11 305 -22%

TOTAL 742 167 646 307 -13%

Source: Nielsen Ukraine, All 18-54 50К+, excluding social/political ad, entertainment and Mass Media Local players

CHANGES IN TOP CATEGORIES. JUNE 2015

5 • Source: Nielsen Ukraine, All 18-54 50К+, excluding social/political ad, entertainment and Mass Media

Alcohol category reduced falling speed in comparison to the last months (-49% in April and -40% in May) due to:

Beer brands high activity placement in the cause of: 1. Seasonality;

2. Intensification of placement before Law about restriction of alcohol advertising entries into force.

Leading players: AB InBev (+40%), Carlsberg Group (+68%)

-36%

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5

10

15

20

25

30

35

40

45

40 42 44 46 48 50 52 2 4 6 8 10 12 14 16 18 20 22 24 26

Thousands, EqGRP 2015 2014

WEEKLY TV ACTIVITY. JANUARY-JUNE 2015

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In June TV activity remains lower than in the same period of last year, herewith fully represents general situation weekly.

Source: Nielsen Ukraine, All 18-54 50К+, excluding social/political ad, entertainment and Mass Media

CHANGES IN LEGISLATION

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From June 1, 2015 beer in Ukraine equates to alcoholic beverages. Advertising implements due to rules, operating for strong alcoholic beverages.

CHANGES IN LEGISLATION

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TV and Radio (Direct) Forbidden from 06:00 to 23:00.

In permitted time preview trailers should be accompanied with

warning about harm of alcohol in volume no less than 15% of

advertising. Non-alcoholic beer advertising falls

under restrictions too.

TV Sponsorship Forbidden: label demonstration/

It’s simulations with package image, using of any parts identity

to TV trailer. Permitted: label demonstration on glass surface without product

characteristics and package image, It’s parts, which can generate associations with

product/manufacture.

Internet Permitted with warning:

«Excessive alcohol consumption is dangerous

for your health» in all advertising formats.

OOH Forbidden in any appearance

Permitted : advertising in subway due to Sponsorship

agreement with logotype image and word: Sponsor…” .

CHANGES IN LEGISLATION

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On June 6, entered into force the Law about television advertising volume reduction to 15% in hour from airtime The Law stipulate advertising restriction on TV by 15% during every astronomical hour.

Advertising on radio shouldn’t overdraw 20% during astronomical hour.

Due to operating standard, advertising on TV can’t overdraw 20%, in the course of electoral process – 15%; on radio 20% and 25% accordingly.

64% 66% 72%

88% 93%

0%

20%

40%

60%

80%

100%

21 22 23 24 25

1+1 Group

Alliance

In all channels

CHANGES IN LEGISLATION

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Law influence on advertising unit of channels sold-out: Sold Out

After entering into force the Law advertising units of channels sold out sharply increased. Due to forecasts, in fall sold out for channels, especially big, will be maximum

Transition week: Start of Law action

from Saturday

CHANGES IN LEGISLATION

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Law about transparency of media property was enacted by Verkhovna Rada. Under the changes, names of electronic media, TV and radio broadcasting owners become open.

The Law obligates channel owners inform about their property for the licensing in National Council.

Also, it suggests to prohibit launch and activity of radio organization, participants of which are juridical individuals, registered in offshore zone and respective private individuals, and those who have no Ukrainian citizenship.

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3G in Ukraine

STRUGGLE FOR LEADERSHIP

Each Ukrainian mobile provider of ‘Big Three’ uses his own development and 3G services adoption strategy to differentiate from competitors.

We made a general assessment of every player, based on actions and advertising messages.

ІНТЕРТЕЛЕКОМ

STRUGGLE FOR 3G LEADERSHIP: KYIVSTAR

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Kyivstar: quality strategy vs launch speed Mobile provider’s actions in 3G network development are determined, as never. Company director make a stress in his Facebook page on full network coverage.

Kyivstar’s approach to country coverage is quite original: it was first to launch 3G network in the whole town Brovary - Kyiv satellite, not megalopolis. Now Kyivstar is absolute leader in quantity of people covered where 3G is testing.

It should be noted successful moment for rebranding, which is even more strengthened through advertisement presence in informational space.

Kyivstar constantly uses new approaches to conquer client’s loyalty. For example, in popular Alfa Jazz Fest company provided an opportunity to listen music novelties, using 3G for free for their clients.

STRUGGLE FOR 3G LEADERSHIP : МТS

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МТS : speed strategy – “faster, than light” MTS is first who launched 3G network thanks to roaming agreement with Trimob. They still haven’t their own network and subscribers should switch between networks where Trimob coverage is absent. Their own network launch is planned around fall. It’s explained by that fact that hurry can discredit service and quality coverage will not be provided. As apposed to competitors, MTS made a stress on 3G services provision in internal network (indoor solution), in comparison with large shopping and entertainment centers WI-FI. It’s available in speed up to 42 Mb/s in 22 large Kyiv malls and Kharkov subway.

To maintain leadership, MTS launched advertising campaign, where famous boxer Oleksandr Usyk carries out an experiment that shows Internet speed which is “faster, than light”.

STRUGGLE FOR 3G LEADERSHIP : LIFE:)

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life:) “Space speed” After new network launch in Lviv and large-scale subscribers tests in Kyiv, mobile provider life:) has become first, who launched their 3G network in Ukraine. Subscribers can use 3G+ network in 30 big cities. General network is prepared to be launched in test mode in the nearest future.

life:) competes within leaders and shows better results in download speed in Kyiv (provider №1 in data rate) and Lviv. Using preference over competitors, life:) focused on 3G+, where download speed up to 63,3 Mb/s is possible.

Preview trailer with first astronaut of independent Ukraine Leonid Kadeniuk says “Space speed became reality!”

STRUGGLE FOR 3G LEADERSHIP : THE SECOND ECHELON

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Intertelecom, Trimob, PEOPLEnet: positions protection strategy Under “Big Three” pressure this companies are going through hard times.

Intertelecom is still in better, or, at least, safe position. Advantage: large coverage and no necessity of capital investments in network. It launched advertising campaign “Stop waiting for 3G! Use now!”, which shows absurdity of 3G anticipation, when technology has already worked throughout Ukraine.

Trimob is in unstable situation. In spite of media support, work with subscribers and rate schedule, network growth is unnoticeable.

PEOPLEnet is in a difficult situation. Commercial court of Kyiv lodged claim about company’s bankruptcy due to account payable. Company admit debt existence, but consider it as “normal working process”. ІНТЕРТЕЛЕКОМ

trends in media Other

OTHER TRENDS IN MEDIA. ТV

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Crimean Tatar channel ATR resumed broadcasting on June 17 near 20:30 Crimean authorities made out a list of prohibited in peninsula Mass Media, among which is channel ATR. For channel journalists work on mass events in peninsula is prohibited.

In spite of this, Crimean audience have an opportunity to watch ATR, but only via satellite.

In Kyiv TV channel has financial and technical basis and staff, who continue to work.

Together with ATR, children’s channel Lale and radio Meydan resumed broadcasting in Internet and in satellite.

OTHER TRENDS IN MEDIA. ТV

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Channel “Inter” received a broadcasting license On June 30, 2015 channel “Inter” received a license, which gives is an opportunity to continue broadcasting.

Members of National Council adopted unanimously decision about license extension to 7 years.

This decision confirms that TV channel observes standards of current Ukrainian legislation and works in legal framework.

OTHER TRENDS IN MEDIA. ООН

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Billboards will be taken away from roads Bill about billboards placement prohibition within right of way roads of common use out of centers of population was carried.

Illegally set advertisement billboards will be dismantled after the expiration date of permission document.

Inspection established that 3/4 from 6000 advertisement billboards are set with breach of legislation.

Social research showed, that ad diverts 82% of drivers during they drive a car out of urban areas.

OTHER TRENDS IN MEDIA. ООН

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Opportunity to place advertisement in Nova Poshta departments Advantages: wide geography, including 1,5K departments all over Ukraine. Advertising formats: video spots on the Kyiv and Lviv monitors, booklet A5 sampling “from hand to hand”. Interactive media screens on shopping and entertainment center “Ocean Plaza” First interactive campaign was launched with Coca-Cola. Idea: by creating a personalized Coca-Cola can and sharing it in social networks with a hash tag #моякокакола, one could then see it on Ocean plaza video screens. During 8 days campaign 150K people (TA 18+) were reached.

New formats in Outdoor advertising:

OTHER TRENDS IN MEDIA. INTERNET

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Twitter launched automatic video playback Now video records, 6 second Vine videos and GIF-animations could be viewed straight on the feed.

It’s possible to switch off automatic video playback and return to it by click. In case of slow connection service switches into playback mode by click.

Due to new service launch Twitter will collect payment for video, 100% of which were in field of view on user’s device no less than 3 seconds.

OTHER TRENDS IN MEDIA. INTERNET

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YouTube News channel launch YouTube launches news channel Newswire, where user’s videos from the most important events will be placed. Videos will be checked by Storyful editors.

Video hosting would like to raise new media using effectiveness, to overcome main disadvantage - difficulty of information confirmation because only seldom authors inform service about the source.

YouTube goal – give to professional Mass Media new channel to provide confirmed information and video, made by eyewitnesses.

OTHER TRENDS IN MEDIA. INTERNET

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Teaser advertisement in Skype Starting from June advertisers which focus on mobile audience, have an opportunity to place their ads in Skype mobile application for Android and Windows Phone.

It’s possible to target users who use Skype on smartphones and tablets.

OTHER TRENDS IN MEDIA. INTERNET

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Yandex announced the launch of music listening service Yandex. Radio– new streaming service for listening to music online. Product uses technologies of smart recommendations Disco to create personal playlists. Also service is available in mobile application format.

Yandex. Radio will work at the expense of audio advertising, which will combine audio spot, text announcements and banner. Format is adopted for web and mobile devices.

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OTHER TRENDS IN MEDIA. INTERNET

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Launch of Apple information service On June 8 in Worldwide Apple Developers Conference in San Francisco company Apple announced about their own information service Apple News launch.

Service provide access to current political, economic and culture information from the largest media sources.

Also company launched a new service with improved interactive maps for better directions hints.

OTHER TRENDS IN MEDIA. INTERNET

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New mobile advertising formats from Facebook Popular social network Facebook intends to launch of new mobile advertising formats and possibilities of promotion.

At the moment social network has 1,25 bln of monthly active users, which gain access from smart phones and tablets. 73% of ad income company receive from mobile ads.

Social network announced their plans to work with advertisers within testing, development and improvement of new advertising formats before their launch in service’s mobile platform. Company has already started to communicate with brands and collect feedback.

OTHER TRENDS IN MEDIA. INTERNET

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AntiAdBlocker On June 18 Soursepoin’s “AntiAdBlocker” technology was officially presented . Main idea – to help publishers to not loose costs from AdBlock using among site visitors.

Monetization scheme is still unknown, however It’s considering business model of licensing system: percent from returned income to publisher or from new subscriptions will be gained by developers.

Currently Sourcepoint provide services for free for 20 publishers from top-100 according to ComScore.

OTHER TRENDS IN MEDIA. INTERNET

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Google Music Google Company presented free version of Music service, which works on advertisement model.

Free version will have scaled-down functionality: users wouldn’t be able to choose tracks for listening themselves, instead of this, they’ll get already compiled playlists. Such scheme is realized in Pandora and iTunes Radio.

Besides that, algorithm will automatically pick up and create playlists from tracks, which will be similar to chosen song by user.

OTHER TRENDS IN MEDIA. PRESS

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Newspapers and Magazines vs Digital content Report data in Times of London shows, that traditional printed media often have more attractive and interesting content than digital. In traditional form newspapers and magazines deserve more credit, than it’s given them now.

It’s especially important, as investments in digital media impact on print. In the last year companies’ ad investments in magazines in USA fell by 5,1% comparing to 2013, and in newspapers – by 10%.

UKRAINIAN CASE. PRODUCT & SERVICE

CAMPAIGN: Mood Box, Ping- pong.ua, Ukraine, 2014

PROBLEM: Discontent while waiting for the order, which leads to no satisfaction during the meal itself and further refusal of delivery.

SOLUTION: Turning a box of Thai food into a mood box. Together with the order customer receives random gift from random person, who also ordered a meal. This way client gets an opportunity to continue a chain and sent anything for free to the next person. The only rule is the present’s size, which is defined by special frame.

RESULTS: • >1000 presents were sent during first couple of weeks, more than 25%

from all orders contained a present; • +19% growth of delivery orders in a month; • Increased positive posts and records on Facebook page.

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CAMPAIGN: Split to Unite, Obolon, Ukraine, 2014

PROBLEM: Obolon has lost their market share on the background of developing events in Ukrainian history, namely struggle for country’s territorial integrity.

SOLUTION: Promo-campaign with a patriotic mood. Obolon developed 2 bottles with 2 labels: blue and yellow. 2 bottles together create national Ukrainian flag. Promo-campaign was also supported in social networks.

RESULTS: • consumer response in social networks: posts, photos; • As apposite to beer market decline, Obolon increased sales by 6,7%.

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UKRAINIAN CASE. DESIGN/ PACKAGE

CAMPAIGN: Better on foot, ECCO, Latvia, 2015

PROBLEM: At the beginning of 2015 Riga City Council and the biggest enterprise, which provides city transportations by public transport, doubled ticket price. This provoked extreme dissatisfaction among citizens.

TASK: Launch a new season collection for ECCO

SOLUTION: Exploit the situation and put up quite provocative advertising on city transport – tramway. Slogan «BETTER ON FOOT» has double meaning – shoes quality and comfort on foots and convenience to go on foot, as alternative to trip by public transport.

RESULTS:

• Immediate ad distribution in social networks and news sites;

• +21% sales growth for first 4 advertising weeks.

WORLD CASE. TRANSPORT

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CAMPAIGN: Read my Lips, Maybelline, Russia, 2014

GOAL: Loud launch of famous lip balm Baby Lips from Maybelline.

PROBLEM : Women use lip balm only in winter, plus such products are usually sold only in pharmacy.

IDEA: Convey audience that healthy lips are fashionable.

SOLUTION : On-line test on site babylips.maybelline.com. After successfully passing the test, girls could receive balm as a prize. Test essence was to guess right 5 words, which were inaudibly voiced in video. Idea enhanced by various digital tools: Instagram, Youtube, social networks, blogs, promo sites, banner advertising.

RESULTS: • 500 К photos in Instagram with hash tag #babylips; • 2,9 М website visits and efforts to take the On-line test; • 150 К downloaded videos; • +200% growth of Maybelline community in Vkontakte.

WORLD CASE. DIGITAL

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CAMPAIGN: Read a Tree, online e-book store Elefant, Romania, 2015

SITUATION: 75% of woods all over the world were cut or corrupted by people. A third of them were destroyed for paper manufacturing.

GOAL: convince people to read e-books instead of paper.

SOLUTION: Mobile application, which helped user to scan a special ad on the tree and receive e-book for free. Also user could share this event in FB, Instagram and Twitter, thus, attract followers.

RESULTS: • 40 К of trees were scanned in 3 weeks; • 200 downloaded books per day during month of campaign; • Campaign raised media attention, which spread message and together

with fast-growing distribution in social networks, generated Earned media worth 1,6 M Euro.

WORLD CASE. INTERACTIVE

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Digital Media TV Social media

First paid advert was aired on July 1 in 1941 when on US TV a ten seconds video by watch company «Bulova Watch Company» was shown. For advertiser the cost was only 9 dollars, including production.

From this moment ad placement confidently occupied its place on TV and helped a lot of companies to succeed.

In this month issue we continue to surprise you with interesting facts from advertising world, and will tell you some curious and amusing case studies.

Enjoy!

Interesting page

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Fact #2 From 1925 to 1934 Eiffel Tower

was a huge advertising medium. It was rented by Andre Citroen,

founder of Citroën concern, who set in tower 125 thousands of

light bulbs.

Fact #1 When in 1933 Dirac was

awarded by Nobel prize in physics, he wanted to refuse it because he did not aim to turn

it into self-advert. But Rutherford persuaded him to

accept the award, as “Refusal of Novel prize is much bigger

advertising”.

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Fact #4 The most expensive

advertising in the world cost Chanel 33M dollars, 3M of them were paid to Nicole

Kidman for filming in video spot.

Fact #3 Alka-Seltzer significantly

increased sales due to wise marketing solution: at the same time two pills instead of one pill

were demonstrated in the ad.

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INTERESTING PAGE. ADVERTISING CURIOSITIES

Advertising failure happened in the USA, when during a social anti drug project for American schoolchildren were given pencils with inscription: “I’m too cool to do drugs!”.

With time pencils grinded down and in their stubs remained appeal to action: “..do drugs!”

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INTERESTING PAGE. ADVERTISING CURIOSITIES

And here’s what happened with American analgesic advertising in Saudi Arabia: The ad was following: 3 posters left to right – in first lady with skewed face, in second – lady, who drinks pharmacy and in third – happy and satisfied lady.

The only problem was that in Saudi Arabia read right to left.

AND FINALLY….

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A lot of researchers affirm that advertisement is the most significant and influential form of art on Earth.

See you in the next issue!