What is the most cost-effective way to purchase media in Russia?

When planning an advertising campaign, advertisers, regardless of their location, often find themselves confronted with the decision of selecting a supplier. They must determine whether to utilize the services of sales houses or opt for a media buying agency. The question then arises: which approach will be most advantageous?

In an attempt to maintain complete objectivity and impartiality, I will refrain from favoring any particular advertising business representatives. Instead, I will rely solely on concrete facts to draw my conclusions, which are outlined below.

It is crucial to recognize that partnering with a sales house does not always guarantee the most favorable pricing. Allow me to elaborate on the reasons behind this. For instance, when a sales house engages in TV advertising, they typically have separate departments for customer support and collaboration with media agencies. A specific price, known as the “transaction price,” is set for media placement—let’s assume it’s $100,000—charged by the sales house to the media agency. As per the regulations, the agency is expected to sell the “deal” to the client without altering the price, while receiving a commission from the sales house ranging from 10% to 15%. If the client chooses to work directly with the sales house, they will be offered the same conditions—$100,000, which includes a service fee of 10% to 15% for the personnel employed in the relevant department of the sales house. However, it is important to note that the media agency might seek to secure a higher commission, so it becomes your responsibility to identify a fair supplier.

The second notable characteristic of the Russian media market is its distinct approach towards “newcomers.” Based on my observations, new brands and advertising providers in Russia are initially offered costly advertising placement terms. This allows room for negotiation and the potential to lower the price if the advertising provider engages in bargaining. Bargaining is indeed a customary practice in Russia. However, it is important to note that effective bargaining typically applies to extended periods of advertisement placement or significant GRP (Gross Rating Points) requirements. In cases where a new brand approaches a media agency and lacks the ability to engage in objective bargaining due to minimal media purchases, the reputation of the media agency can influence the conditions. As a general rule, if the agency enjoys a positive reputation with the sales house, the transaction price is often reduced.

The decision between a sales house and a media agency ultimately relies on your unique circumstances and the scale of your business. As a general guideline, if your goals are ambitious, collaborating with a media agency tends to be more advantageous. Conversely, if your objectives are modest, working with a sales house may prove beneficial.

Are you tasked with launching a campaign solely through a single media channel? In such a scenario, the optimal choice would be to collaborate with a sales house. However, if your campaign requires a comprehensive and nationwide presence across multiple media platforms, engaging a media buying agency can not only save time but also alleviate stress and expenses.

When developing a campaign strategy, you are bound to encounter challenges related to insufficient information or difficulties in managing it effectively. The vastness of Russia exacerbates this issue, as each region and city possesses distinct local characteristics that are both challenging and crucial to consider. While sales houses can provide some assistance in achieving advertising effectiveness, it’s important to acknowledge that they can never be completely impartial when selecting a media channel, as their goals may differ from yours. Your objective is to identify the most suitable channel that effectively reaches your target audience while considering factors such as product relevance, ratings, and pricing. Conversely, an exclusive seller is primarily motivated to promote their own resources rather than those of others. Therefore, relying solely on a single sales house isolates your business from other potentially interesting and useful information.

They possess the competence to make informed decisions regarding the vendors to purchase from and possess extensive knowledge about the carriers.

For a comprehensive understanding of media buying in Russia and to gain insights on effective practices, I recommend reading the full version of the White Paper titled “HOW DOES THE MEDIA-BUYING MARKET IN RUSSIA WORK? A media buyers’ quick guide for effective work in Russia.”