Ukrainian Internet

Market Review
INTERNET PROFILE
Steady growth of UA zone

Data source: “HostMaster”, 2008

Up to 50% of sites are still business and service (portals)
oriented

Web sites profile

4% 2% 2%
6% Business
27%
10% Internet portals/Services
Leisure and Entertainment
E-commerce, E-shops
Tourism
Science/Education
Auto

12% Real Estate

21% Mass Media
16%

Data source: “Meta.ua” catalog, 2008

Ukr.net – the biggest and growing portal
In January daily audience of Ukr.net exceeded 400.000

December 2008 – January 2009

December 2008 – January 2009

Data source: bigmir

Daily audience
Active
New
Core

Data source: bigmir

INTERNET PENETRATION AND AUDIENCE
Internet usage – 41% or up to 7 mln

“Do you personally use the

Internet?” All cities 50K+ (3 000 cities)

Internet user Do not use

• Population of the Ukrainian
cities 50K+ is 16 005K
people 41%
(age 14-65)
59%
• 6 637K Internet Users
(vs. 10 032K Internet users by Bigmir-Internet on-
line measurement, 2008)

Data source: GFK off-line measurement, 2008

Internet market potential – plus 12% or 1.9 mio

• Optimistic forecast is 1.9

All cities 50K+ (3 000 cities)
mio users growth for the
Internet user

Do not use, but are going to half of the year

Do not use and aren't going to

• 40% (under 25) and 7%

41%
47% (50+ age) are going to use
the Internet

12%

Data source: GFK, 2008

Up to 80% of users surf Internet several times a week

The usage frequency

(all cities 50K+)
5%
8%

10% Once or several times a day

44%
Several times a week

Once a week

Several times a month

33% Once a month or less

Data source: GFK, 2008

Broadband Internet > 1 mio users

Household broadband penetration, % Broadband users, mln

5
4,2

0,92 1,05

2007 2008

Data source: iKS Consulting

Internet access points & average time

Home 77.84% 1:39:22

Work 49.21% 2:09:53

School/Institute 6.42% 1:16:14

Internet café 7.84% 1:29:43

Friends/Relatives 8.60% 2:09:53

Other 3.98% 1:39:22

Internet Access points Average time per user

Data source: Gemius, 2008

PC users’ Internet access points

PC usage:
At some other
At home At job/ study place Do not use
100%

Do not use
90%

80%
At some other place
70%
Internet usage:

Among those
At friends/ relatives 60% who do not use
PC 2% do surf
50% Internet
somehow!
At Internet café 40%

30%
At job/ study
20%

At home 10%

0%

Data source: TNS Ukraine 2008/ 2+3

All people 12-65, cities 50 000+, N=10 002
Mobile subscribers’ Internet access points

Internet access points

100%
Do not use
90%

80%
life:) users are At other place
most active in
70%
Net!

60% At friends/ relatives

50%

At Internet café
40%

30%
At work/ study
20%

10%
At home
0%
All Life:) МТС Киевстар Beeline

Mobile subscribers

Data source: TNS Ukraine 2008/ 2+3

All people 12-65, cities 50 000+, N=10 002
Internet access at home: new quality of contact

Internet access points

At home At work/ study At Internet café At other place Do not use

60

50
Number of those
who have access at
40 Break point: since 2005 home doubled in the
number of users who have last two years!
access at home exceeded
those who have access at
30
%

work/ study

20

10

0
Q1 '04

Q2 '04

Q3 '04

Q4 '04

Q1 '05

Q2 '05

Q3 '05

Q4 '05

Q1 '06

Q2 '06

Q3 '06

Q4 '06

Q2 '07

Q3 '07

Q4 '07

Q1 '08

Q2 '08

Q3 '08
Q1 '07

Data source: TNS Ukraine 2004-2008

All people 12-65, cities 50 000+, N=10 002
There are ~870K of active Internet users (with access at
home AND at work) in Ukraine

At home AND At work/

At home
at work/ study study
1 846 350
871 100 774 380

Bubble size corresponds the number of users

Data source: TNS Ukraine 2008/ 2+3. All people 12-65, cities 50 000+, N=10 002
Active Internet users are young

Age
20
18
16
14 Affinity > 140
12
10
120 > Affinity > 139
%

8 100 > Affinity > 119

6
4 Affinity < 100
2
0
26-30

41-45

51-55
36-40

61-65
12-15

16-20

21-25

31-35

46-50

56-60

Audience: Internet users at home and at work, N=493

Data source: TNS Ukraine 2008/ 2+3

Base: All people 12-65, cities 50 000+, N=10 002
Active Internet users have higher income

Monthly income per family member

30

25

20 Affinity > 140

15 120 > Affinity > 139
%

10 100 > Affinity > 119

5 Affinity < 100
0
6000+ 4000- 2500- 1500- 900- 500-899 < 500
UAH 5999 3999 2499 1499 UAH UAH
UAH UAH UAH UAH

Audience: Internet users at home and at work, N=493

Data source: TNS Ukraine 2008/ 2+3

Base: All people 12-65, cities 50 000+, N=10 002
Active Internet users live in Kyiv

City size
35

30

25 Affinity > 140

20 120 > Affinity > 139
%

15 100 > Affinity > 119

10 Affinity < 100
5

0
Kyiv 500K+ 100-500K 50-100K

Audience: Internet users at home and at work, N=493

Data source: TNS Ukraine 2008/ 2+3

Base: All people 12-65, cities 50 000+, N=10 002
Daily & weekly reach & average time

Weekly audience 4 801 572

Internet users – number of
unique users, who have 24h audience 1 918 144

viewed the web page more 24h workday audience 2 163 386

than once a month 24h day-off audience 1 427 661

Monthly page views 1 795 633 496

10 031 778 internet users

(vs. 6 637K Internet Users by GFK off-line Average time spent on site 3,48 min
measurement, 2008)

Average depth of site viewing 3,05 pages

Data source: Bigmir on-line measurement, 2008

Internet audience geography

Kyiv 58,94%
Odessa 6,57%
Dnipropetrovs'k 5,53%
Donetsk 5,10%
Kharkiv 4,48%
Lviv 3,78%
Krym 2,71%
Zaporizhia 2,47%
Poltava 1,35%
Mykolaiv 1,15%
Luhansk 1,11%
Cherkasy 1,03%
Khmelnitsky 0,70%
Rivne 0,64%
Sumy 0,59%
Vinnytsia 0,57%
Ternopil 0,55%
Ivano-Frankivsk 0,51%
Kirovograd 0,45%
Kherson 0,44%
Kyiv Other cities
Chernihiv 0,43%
Zakarpattya 0,34%
Zhitomyr 0,19%
Chernivtsi 0,18%
Lutsk 0,16%

Data source: Bigmir on-line measurement, 2008

Audience age split & penetration

All cities 50K+

Cities 50K+,
Age Users number
Do not use Use population

14 – 19 1 277 756 1 844 744

14 - 19 31% 69%
20 – 24 1 374 967 2 060 222
20 - 24 33% 67%
25 – 29 981 459 1 755 167
25 - 29 44% 56%
30 – 39 1 516 436 3 107 447
30 - 39 51% 49%
40 – 49 1 000 023 3 226 196
40 - 49 69% 31%
50 – 59 434 748 2 992 635
50 - 50 86% 15%
60 – 65 52 227 1 068 660
60 - 65 95% 5%
TOTAL: 6 637 616 16 005 070

Corresponding numbers

Data source: GFK, 2008

Internet audience gender

Male Female

43%

57%

Data source: Gemius, 2008

Internet audience occupation

student 30%

worker 2%

manager 13%

specialist 31%

top manager 14%

Data source: Gemius, 2008

Income – skewed to higher income

• High income – enough money for food,

5%
18% clothes, footwear, expensive purchases. Needs
to put by or borrow to buy a car or a flat.
Any time can do any necessary purchasing.
65%
• Average income – enough money for food,
66% necessary clothes, footwear. Needs to put by or
borrow to by good suit, good cell phone,
vacuum cleaner.
26% Needs to put by or borrow to buy an expansive
8% things (TV or freezer).

Internet users Non users

• Low income – needs to save money on food
and to put by or borrow to buy clothes,
High income
footwear.
Average income
Low income

Data source: GFK, 2008

INTERNET ADVERTISING MARKET
Internet advertising market investment dynamics

Internet is supposed to be the only media with positive dynamics in 2009

16
$ mln

14

12

10

8
Media advertising
6 Context advertising

0
2003 2004 2005 2006 2007 2008 2009

Data source: net estimate, All-Ukrainian AdCoalition, 2008

Key facts
(experts opinion)
Media peculiarities  A natural multi-task media
 Wide usage of web 2.0 (User Generated Content, Social Networking,
blog and video)
 A very limited number of national content sites with minimal media
cover
 Absence of relevant measurement makes planning of on-line
campaigns a guesswork

Adv peculiarities  The only advertising market, that will grow in 2009
 CPM is a leading model of payment, however CPC is going to be
more common (estimations: CPM=$ 4,3 CPC=$2)
 CPM model still lets publishers to make contact forecast mistake up to
20-30%
 Context advertising is the main anti-crisis on-line tool
 Social networks and interaction is a trend, but needs to be purposely
planned and tracked
 Appearance of Internet sales houses (FISH, TakiTak)
 Two opposite ways of ads selling (market structure conflict)
Ways of ads selling.
Selling and Buying inside one and the same business

conflict
Seller – Portal is loosing
+ • Interested in buying
ads on its own portals
its motivation on
quality of audience
Buyer and content
improvement
(internet-agency №1)

– Priority on
statistic indexes
• Not interested in
Buyer buying ads on
improvement by
engaging not target
(internet-agency №2) competitor portal audience
Ways of ads selling.
Diversity of selling and Buying.

Buyer 2 – Structure makes

(internet-agency
№2) market standard of
objective and
Buyer 1 Buyer 3 effective planning
(internet-agency (internet-agency and buying
№1) №3)
procedures

– Portals are
Seller interested in high
(Ad Portal) quality of the content
Banners will still dominate in 2009
(expert opinion)

2%
8%

20% Banner advertising

Context avertising

SEO and trafic

generation
Sponsorship

70%
INTERNET PLANNING TOOLS
Research tools

Who is our audience:

TNS Ukraine Demography, preferences,
media consumption

Quantitative indexes:
Bigmir.net Which resources (and how often)
are browsed by Ukrainian audience

TA behavior in the Internet:

Gemius Main services and sites,
audience profile
Google Trends – new free-of-charge tool to
analyze Internet trends

• Searches:
• Shows relative frequency of searches of certain words in
relative dynamics by region and period

• Websites:
• Shows relative dynamics of pages visits by region and period

• Main advantage: it is able to show data for Ukraine only split by

regions
Searches: Google Trends could be the source of
insights
Google trends reflects UAH exchange rate fluctuations in 2008 and the
end of credit boom

job exchange rate credit

Data source: Google Trends

Websites: Dynamics of major portals audience

Data source: Google Trends

AITI Internet

All data sources: TNS, BigMir, Gemius

Cutting-edge placement – AdRiver
Exclusive monitoring
All kinds of promotion: banners, rich
media, context, buzz, social networks,
video, games etc.
Exclusive technology of banner advertising market
monitoring

“Market is in the full view”

Structuring of Top sites Unique analysis of

information: activity of:
• Banner location • Particular advertisers
• Advertiser • Brand categories &
sites orientation
Such system allows to
monitor exact brand • Market trends
advertising on exact
banner location
Campaign realization technology

• Flexible targeting possibilities

• Contact frequency control

• Automatic banner replacement depends on effectiveness

• Retargeting in case of banner feedback

• On-line access to current campaign results

• Complete reports of Ad campaign, separate sites, feedback results and

contact frequency

• Behavior analysis of Advertiser site users

Thank you!