Ukrainian Media Market Recovers Gradually Despite War
Russia’s full-scale invasion in Ukraine has impacted economies on a world scale. The European markets felt significant pressure in 2022 due to the soaring inflation which in some countries like Estonia reached up to 30%. In Ukraine, that factor was restrained to peaks of 26.6% until December 2022 and has been declining since, dropping to 17.9% in April in annual terms.
After a good start in the first two months of 2022, the Ukrainian ad market came to a complete stop between late February and May, and companies started to regularly allocate money for advertising only in the fall. Thus, in 2022 the market reached only 37% of the volumes for 2021. Since the start of 2023, advertising activity has been more pronounced, with the digital segment attracting almost two times more money than the other segments, and some agencies expect that about half of the money that was lost last year will be recovered by the market already this year. Georgi R. Chakarov and Svitlana Kalinina, Managing Partner at Kwendi Media Audit, discussed in detail the events that took place last year in Ukraine and the prospects for 2023 and beyond.
After a good start in the first two months of 2022, the Ukrainian ad market came to a complete stop between late February and May, and companies started to regularly allocate money for advertising only in the fall. Thus, in 2022 the market reached only 37% of the volumes for 2021. Since the start of 2023, advertising activity has been more pronounced, with the digital segment attracting almost two times more money than the other segments, and some agencies expect that about half of the money that was lost last year will be recovered by the market already this year. Georgi R. Chakarov and Svitlana Kalinina, Managing Partner at Kwendi Media Audit, discussed in detail the events that took place last year in Ukraine and the prospects for 2023 and beyond.
Svitlana Kalinina, Managing Partner of Kwendi Me- dia Audit
Svitlana, Kwendi is a regional leader in media investment analysis and media audit in Eastern Europe and Central Asia. Could you tell us more about your activities in the region and especially in Ukraine?
Kwendi Media Audit was founded in Kyiv, Ukraine in 2006 as an independent media advisory. Since then we’ve been providing unbiased, data-driven expertise on different types of media investment.
During 17 years of continuous growth we have had more than 100 clients. Many of them have been working with us for more than 10 years and not only in Ukraine. Together with our clients we have expanded our scope, covering major Central Asian and Eastern European markets.
The Kwendi TV Data Pool in Ukraine represents c.40% of the total TV Market inventory (only actual ratings and fulfilled budgets are included in the database). We also have sufficient TV pools in other markets where we operate. We service our direct clients, as well as top international media audit networks, including Ebiquity and ECI. We started a strategic partnership with Stars Poland in 2022.
But mostly, I am proud of our team – 15 specialists, all senior staff with successful track record in media and marketing, core team working with us for more than ten years.
What was the initial effect of the Russian invasion in Ukraine?
At first, it was a shock for all of us. It was hard to believe that this was indeed happening in real life. The war has ruined the normal life of each and everyone in our country. Of course, the physical safety of our people and helping our defenders has always remained our main priority up till today.
All advertising in any kind of media was stopped. The main TV channels joined forces to provide the “News Marathon” - a united channel to deliver vital, fact-checked, up-to-date information from one trustworthy source to Ukrainian people. TV advertising was completely stopped for 3 months at least.
What do the figures for the full year 2022 show? Which segments were hurt the most by the war?
The whole media market fell several times. Offline media were hurt the most with national TV advertising disappearing altogether until the end of May. The digital market suffered less than other media – due to targeting possibilities and low barriers to entry, it rebounded quicker than others.
Last year saw a major change on the TV market with the closure of Me- dia Group Ukraine. What has been the effect of this on the market in general and on the other big media groups, in particular?
This event had almost no impact on the advertising market. Channel Ukraina was part of the ad-free “News Marathon” at the moment the deci- sion to close it was taken. The Ukrainian TV market has always been extremely competitive. Other big media groups SLM and 1+1 provide enough TV channels for any task for varied target audiences.
Official figures show that some channels saw their revenue decrease by 3-5 times last year. Do you expect that more channels will be forced to shut due to financial problems? During all previous crises, TV channels were not shut down despite dramatic decreases in ad revenues. This is not just a business, but also mostly a political decision by its media owners.
There are already signs of recovery on the ad market. Which segments are growing the most right now and how has the advertising pie changed?
In the end of May 2022, when the direct threat to the Ukrainian capital Kyiv was reduced, the sales houses restarted advertising sales on channels outside of the “News Marathon” (the main TV channels, engaged in it remain ad-free up to this day). The TV measurement did not operate, and sales were made “spot by spot”. The advertising volume was restoring steadily, and by October 2022 there even was a moment went the sold-out slots were almost at 100%.
It was a time of optimistic forecasts before the systematic bombing of big cities and periodic blackouts started. Then came the hard winter with a threat of a complete blackout across the whole of Ukraine.
The pharmaceutical category constituted the biggest share of the advertising "pie" at around 70%. The next big categories to come back were telecom and retail. In 2023 the TV measurements were restored, and the number of advertisers has been increasing with every month. However, the comeback of Big FMCG is quite gradual and cautious. These advertisers are looking for brand- new ways of communication strategies.
The key point is that the media market will never return to the pre-war situation, it must be renewed and restructured. The market players must join forces and deliver quality service in order to speed up the return of advertisers
Were the recently launched channels by SLM and 1+1 able to attract the interest of advertisers?
Primary SLM and 1+1-owned TV channels are still engaged in the ad- free “News Marathon”. The owners launched substitute TV channels with commercial content and ad inventory. The main reason for this launch is the recovery of the advertising market. Definitely advertisers include these TV channel in their TV budgets.
It is clear that without a proper audience measurement system the TV market will not be able to function normally. What is the current situation with people meters research in Ukraine? Is the currently provided audience data reliable?
The TV Panel was stopped in March 2022. In January 2023 it was turned on again, enabling ratings-based ad sales. The restored TV panel is now covering a smaller number of households in less regions and functions properly only for wider audiences, allowing less fragmentation and segmentation than before.
According to the “new panel”, certain channels lost a lot of viewers, while others either kept or in- creased them. However, there have been a few changes in the schedule and aired content and OTT viewing data shows a quite different picture. How do you explain this?
After February 24, 2022, Ukraine has undergone dramatic changes – in terms of population size, place of residence, size of household, and of course, media consumption and type of TV signal reception. These changes are also different for different regions. The new panel itself didn’t bring dramatic changes to TV channels configuration except the “News Marathon”. Also the key change the new panel showed is significant growth of Other TV viewership, which includes OTT, VOD, YouTube, etc. This trend was present before but now it has dramatically accelerated.
What changes do you expect to see on the market in order to make it more competitive and profitable? Is Digital the future for Ukraine?
The digital future is now in Ukraine. For example, 80% of Ukrainians prefer to receive news from the Telegram channels. But Digital is not an enemy of TV. A lot of TV content is spread via digital channels. A lot of advertisers would happily buy not just linear TV, but also online advertising in digitally distributed TV content. The main advantages of digital are its targeting possibilities, flexibility, and lower barrier to entry.
What changes could be expected on the media market? Will Ukraine be able to attract the interest of for- eign investors? What is your best-case scenario?
Ukraine wins and receives security guarantees. Ukrainian people come back home. The Ukrainian economy is healing, restoring, and re-growing. Foreign and domestic investment flows in. More international companies and brands are coming to Ukraine, and the best Ukrainian brands are becoming known and popular abroad. Ukrainian people live in their own land, in safety and prosperity. The Ukrainian advertising and media market is rising, and media channels’ ad revenues enabling free and independent operations of these channels.
Glory to Ukraine, and Glory to all Nations, who have bravely and selflessly supported Ukraine! Glory to the Heroes!
Kwendi Media Audit was founded in Kyiv, Ukraine in 2006 as an independent media advisory. Since then we’ve been providing unbiased, data-driven expertise on different types of media investment.
During 17 years of continuous growth we have had more than 100 clients. Many of them have been working with us for more than 10 years and not only in Ukraine. Together with our clients we have expanded our scope, covering major Central Asian and Eastern European markets.
The Kwendi TV Data Pool in Ukraine represents c.40% of the total TV Market inventory (only actual ratings and fulfilled budgets are included in the database). We also have sufficient TV pools in other markets where we operate. We service our direct clients, as well as top international media audit networks, including Ebiquity and ECI. We started a strategic partnership with Stars Poland in 2022.
But mostly, I am proud of our team – 15 specialists, all senior staff with successful track record in media and marketing, core team working with us for more than ten years.
What was the initial effect of the Russian invasion in Ukraine?
At first, it was a shock for all of us. It was hard to believe that this was indeed happening in real life. The war has ruined the normal life of each and everyone in our country. Of course, the physical safety of our people and helping our defenders has always remained our main priority up till today.
All advertising in any kind of media was stopped. The main TV channels joined forces to provide the “News Marathon” - a united channel to deliver vital, fact-checked, up-to-date information from one trustworthy source to Ukrainian people. TV advertising was completely stopped for 3 months at least.
What do the figures for the full year 2022 show? Which segments were hurt the most by the war?
The whole media market fell several times. Offline media were hurt the most with national TV advertising disappearing altogether until the end of May. The digital market suffered less than other media – due to targeting possibilities and low barriers to entry, it rebounded quicker than others.
Last year saw a major change on the TV market with the closure of Me- dia Group Ukraine. What has been the effect of this on the market in general and on the other big media groups, in particular?
This event had almost no impact on the advertising market. Channel Ukraina was part of the ad-free “News Marathon” at the moment the deci- sion to close it was taken. The Ukrainian TV market has always been extremely competitive. Other big media groups SLM and 1+1 provide enough TV channels for any task for varied target audiences.
Official figures show that some channels saw their revenue decrease by 3-5 times last year. Do you expect that more channels will be forced to shut due to financial problems? During all previous crises, TV channels were not shut down despite dramatic decreases in ad revenues. This is not just a business, but also mostly a political decision by its media owners.
There are already signs of recovery on the ad market. Which segments are growing the most right now and how has the advertising pie changed?
In the end of May 2022, when the direct threat to the Ukrainian capital Kyiv was reduced, the sales houses restarted advertising sales on channels outside of the “News Marathon” (the main TV channels, engaged in it remain ad-free up to this day). The TV measurement did not operate, and sales were made “spot by spot”. The advertising volume was restoring steadily, and by October 2022 there even was a moment went the sold-out slots were almost at 100%.
It was a time of optimistic forecasts before the systematic bombing of big cities and periodic blackouts started. Then came the hard winter with a threat of a complete blackout across the whole of Ukraine.
The pharmaceutical category constituted the biggest share of the advertising "pie" at around 70%. The next big categories to come back were telecom and retail. In 2023 the TV measurements were restored, and the number of advertisers has been increasing with every month. However, the comeback of Big FMCG is quite gradual and cautious. These advertisers are looking for brand- new ways of communication strategies.
The key point is that the media market will never return to the pre-war situation, it must be renewed and restructured. The market players must join forces and deliver quality service in order to speed up the return of advertisers
Were the recently launched channels by SLM and 1+1 able to attract the interest of advertisers?
Primary SLM and 1+1-owned TV channels are still engaged in the ad- free “News Marathon”. The owners launched substitute TV channels with commercial content and ad inventory. The main reason for this launch is the recovery of the advertising market. Definitely advertisers include these TV channel in their TV budgets.
It is clear that without a proper audience measurement system the TV market will not be able to function normally. What is the current situation with people meters research in Ukraine? Is the currently provided audience data reliable?
The TV Panel was stopped in March 2022. In January 2023 it was turned on again, enabling ratings-based ad sales. The restored TV panel is now covering a smaller number of households in less regions and functions properly only for wider audiences, allowing less fragmentation and segmentation than before.
According to the “new panel”, certain channels lost a lot of viewers, while others either kept or in- creased them. However, there have been a few changes in the schedule and aired content and OTT viewing data shows a quite different picture. How do you explain this?
After February 24, 2022, Ukraine has undergone dramatic changes – in terms of population size, place of residence, size of household, and of course, media consumption and type of TV signal reception. These changes are also different for different regions. The new panel itself didn’t bring dramatic changes to TV channels configuration except the “News Marathon”. Also the key change the new panel showed is significant growth of Other TV viewership, which includes OTT, VOD, YouTube, etc. This trend was present before but now it has dramatically accelerated.
What changes do you expect to see on the market in order to make it more competitive and profitable? Is Digital the future for Ukraine?
The digital future is now in Ukraine. For example, 80% of Ukrainians prefer to receive news from the Telegram channels. But Digital is not an enemy of TV. A lot of TV content is spread via digital channels. A lot of advertisers would happily buy not just linear TV, but also online advertising in digitally distributed TV content. The main advantages of digital are its targeting possibilities, flexibility, and lower barrier to entry.
What changes could be expected on the media market? Will Ukraine be able to attract the interest of for- eign investors? What is your best-case scenario?
Ukraine wins and receives security guarantees. Ukrainian people come back home. The Ukrainian economy is healing, restoring, and re-growing. Foreign and domestic investment flows in. More international companies and brands are coming to Ukraine, and the best Ukrainian brands are becoming known and popular abroad. Ukrainian people live in their own land, in safety and prosperity. The Ukrainian advertising and media market is rising, and media channels’ ad revenues enabling free and independent operations of these channels.
Glory to Ukraine, and Glory to all Nations, who have bravely and selflessly supported Ukraine! Glory to the Heroes!
