Dmytro Dutchyn, Director, Sales and Marketing, SPACE MEDIA, sales house distributing advertising in Inter Media Group TV channels
The advertising disappearance from TV air since the beginning of the war, deterioration of the TV viewing measuring system’s quality, partial restoration of TV advertising, the record-breaking drop in the advertisers’ budgets, creation of an artificial shortage of TV ad resources are among the major shocks heavily affecting Ukraine’s TV ad market by now.
Alongside this, however, the TV advertising, supposed to be an effective tool for the fast recovery of Ukraine’s business, is becoming an unaffordable luxury.
RESET
Since the war broke out, the ad market collapsed – the TV channels of major TV groups switched to uninterrupted news and information telecast. In April, some of the broadcasters of each of the four media groups left the information marathon and commercials reappeared in the air of these channels as the most effective and fast tool of support to television, advertisers’ business and the national recovery at large. The four media groups returned the total of upto 20 channels to the ad market *.
The first impediment that the market had to face was the absence of a 100 percent representative** system of TV viewing measurement. The second part of TV research essential for the credible analysis – TV events monitoring – failed to recover since the war starts due to the unpreparedness of the customer, i.e. the Industrial TV Committee, to pay for this service. That is why, whereas prior to the war, an advertiser would pay for the number of a viewer’s contacts with a commercial, during the war the sales on the TV market are based on the number of spots aired***.
THE MARKET SHRINKAGE
Before the war, the total number of brands simultaneously aired in nationwide advertising campaigns on a weekly basis varied between 200 and 250. These days, this figure is twice or even 2.5 times lower and counts some 100 brands. We hope for the return to the market of brands advertised previously, though unfortunately this return is being impeded by artificially set restrictions.
ARTIFICIAL SHORTAGE OF AD RESOURCE
The volumes of advertising appearances are clearly regulated by the law – no more than 9 minutes in each hour. After the departure from the TV market of Ukraine Media Group, only 14 broadcasters became available for advertising placements which belong to the remaining media groups – Starlight Media, 1+1 Media and Inter Media Group, plus several other channels. Notably, the overall volume of ad resource that is now available across all of these channels is 1.5 times lower than the aggregate market supply before the war.
However, for the major part of advertisers, the ad resource volume appears to be limited artificially to even a greater extent. It is an outcome of the stance taken by sales houses of 1+1 Media and SLM groups referring to themselves as Premium TV. Starting from July 2022, they have posed a condition to advertisers: you can only have placements on our 9 broadcasters (as of October, the total of them has risen to 11 after two more independent channels joined the pool) which will make you eligible for a discount. Should you choose to get paced elsewhere others stations (e.g. the channels belonging to Inter Media Group), the discount will be lifted which will raise your price within a 14% to 186% percent range depending on the share of ads spots number aired on other channels.
This development has brought about a significant imbalance on the market: the sold-out rate on 1+1 Media and Starlight Media channels peaks at the level of about 80-90 %**** of the legally prescribed quota. It is fair to expect that once this index reaches 100 %, an auction principle will be activated whereby those who pay more will acquire the airtime. For the Ukrainian business suffering from the unprecedentedly painful drop in the purchasing capacity it creates a paradox: the Ukrainian producers trying to slowly reanimate their businesses will be unable to compete with relatively successful advertisers.
Alongside this, the sold-out rate on Inter Media Group channels is recorded at a 10%-20% index while the economy appears to be unable to employ this unutilized advertising capacity because of the stance of the two market players.
Premium TV Channels: SLM (Novy, STB, М1, М2, OTSE TV), 1+1 Media (2+2, ТЕТ, PlusPlus, Bigudi), independent channels (Sontse, Channel 24 as of October 1, 2022) IMG Channels: NTN, EnterFilm, К1, Mega, Pixel. Other Channels: Pryamyi, Channel 5, Espresso and Sontse, Channel 24 prior to October 1, 2022
MARKET SITUATION UNHEALTHY
Many of our partners are very disappointed with the behavior of Premium TV as Inter Media Group has its unique loyal audience while what Premium TV does is nothing but a practice of imposing fines for an access to this audience. At the same time, the access to Inter Media Group’s viewers determines the sales growth. In reality, companies are forced to pay penalties for restoring their businesses – you want to grow faster, you have to pay more. It represents a major paradox of the market’s current condition: instead of fueling its evolution, currently existing model imposes constraints on it.
It should be noted though that during the two first months of advertising sales reemergence (May – June or weeks from 17 through 26), Premium TV’s price was not contingent on whether or not advertisers would place their commercials on channels that do not belong to this sales-house. By this token, all media groups of Ukraine and independent broadcasters managed to jointly enhance the ad market and to allow advertisers to communicate with the entire available audience. Two months later however, starting from July 2022, Premium TV radically changed their approach to pricing. 
TV AD MARKET NEEDS FREE COMPETITION
A key to changing the situation is the restoration of the regular healthy competition and the lifting of factors artificially creating the ad resource shortage. We realize that the toolbox expansion and the setting of fair ad prices is a priority task being vital for the national economy. It is a matter of protection of and support to advertisers – Ukrainian businesses and their employees – millions of citizens. It is also a matter of Ukraine’s television industry advancement. At this time, it is one of the key consolidation factors enabling each viewer to feel of being engaged in the current events and to make their contribution into the victory of the Ukraine.
In this context, Inter Media Group stands as a reliable partner for the entire market. As far as I know from Inter Media Group representatives, both the short-term and long-term strategies of the Group’s development are aimed at the expansion of its in-house production and broadcasting at large to meet the contemporary challenges. Inter Media Group serves interests of viewers, advertisers and the whole of Ukraine’s economy.
NOTES
* Three major media groups continue broadcasting the national information marathon on the following TV channels: – Inter Media Group: Inter, К2, Zoom; – 1+1 Media: 1+1, Unian TV; – SLM: ICTV.
** Due to a massive citizens’ migration, after the war began the factor of representativity had disappeared from the pre-war single, representative, reliable and independent measurement performed on a contract with the Industrial TV Committee of Ukraine: it is impossible to correctly represent of panel respondents’ current TV viewing to the total current population viewing. The lack of further migration analysis disables proper understanding of details of ongoing and irregular movements of citizens – sometimes back and forth, both within the country and outwards. However inasmuch as the TV peoplemeter panel, counting 2,800 households, was formed in accordance with a separately derived from establishment survey typologies matrix pertinent of all Ukrainian households, during the war time it allows to trace certain trends of citizens migration in naturally changing panel: both with reference to households as a whole and to their individual members which predominantly applies to children, women and conscription-age men. Using a client’s software allowing to compare the unweighted (raw) viewing of panelists with the viewing weighted against pre-war general universes (with no account for migration), one may fairly accurately embrace the wartime TV viewing.
*** Noteworthy, that in order to better assess the advertising value, all market players tend to convert the cost of one spot into the cost of one percentage point of a target audience rating based on existing measuring, representative not for all 100%.
**** Data obtained as a result of a regular inhouse TV air monitoring by our company Space Media. The monitoring of independent channels was launched as of the 33rd week.
