The regional market for online advertising and sites. And how are you?

Published on August 29, 2013

The regional market for online advertising and sites. And how are you?

    My company has been working in Penza for several years - we are engaged in online advertising and website building. The quality of most Internet sites in the region leaves much to be desired, despite the fact that some web-studios are already more than 10 years old (I mean the age of the market), and the number of developers is several tens.

    For reference - Penza has existed for almost 350 years, the population of the region is about 1,400,000 people, transport, infrastructure, etc. - at a fairly high level and it is hardly possible to call the region a backward region.

    Given the Internet penetration of about 50% (according to the POF at the beginning of 2013), the question arose, why is everything so sad in the field of website development and online advertising?

    In August 2013, we conducted a small study of the Penza market for online advertising and website building. The purpose of the study is to understand at what stage the online advertising market in our region is and what are the prospects for its development. Unfortunately, we do not have data for previous years. Neither by the number of sites nor even by the number of enterprises.

    I wonder how things are in other regions? Friends, share your experiences and opinions. I apologize for the clumsy diagrams.


    Why are Penza sites bad?


    Despite the fact that according to the Public Opinion Foundation at the end of 2012, every second in the Volga region constantly uses the Internet, there are not many sites in Penza that reflect the essence of the company due to high-quality materials, photos, design.

    We rated sites by the following criteria:
    • Relevance of information and working contacts, feedback forms. For example, sites with news “last year” or incorrectly indicated phones were weeded out.
    • Conformity of design, content and technical part to the expectations of customers and the requirements of promotion on the Internet
      For example, sites with someone else’s advertising banners on free domains and resources with unambiguously substandard content (photos taken by the “soap box”, texts that cannot be read even by a person with 100% vision) were sent “for scrap”.

    Of the 8,000 companies that we found in online directories and printed catalogs, 1,400 have sites (it is worth considering that one company may have 2-3 resources). About 300 sites are worthily represented on the Internet.

    That is, we can say that only 21% of Penza sites are suitable for promotion, 79% are worthless. The number of Penza companies ready for integrated promotion of goods and services on the Internet was only 3.7%.

    About 500 more companies have storefronts and mini-sites on banner sites popular in the region (bazarpnz.ru, e58.ru, tiu.ru and other services, some also have full-fledged versions of sites).

    These companies may well use additionally some types of online advertising (for example, contextual) to get an additional audience.

    Portraits of various artists


    According to the results of a survey and analysis of the print press, radio, TV and the outdoor, we found that Penza entrepreneurs prefer to use traditional advertising methods more often, which are sometimes much more expensive than Internet technologies. As a result, a budget is allocated to the site according to the residual principle. Apparently this is a consequence of the fact that there are not so many radio and TV channels, glossy magazines in Penza, and about 80 developers. It is easy to find the cheapest solution. But, as a rule, they are used by those who act according to the "presence strategy on the Internet." Misunderstanding the principles of working with the Internet leads to a zero result. As a result, entrepreneurs are disappointed and assure themselves that the Internet is not working and high-quality sites are not needed.

    The key to successful promotion is communication with your customers on all platforms where your audience is, in order to understand which of them are most effective in each case. The quality of traditional advertising in Penza is still much higher than on the regional Internet, but sometimes higher and its cost compared to promotion on the Web. You can verify this by going to the advertising section on the website of any regional media.

    The average cost of advertising on the radio in Penza is about 300 rubles for a 15 second video and 700 rubles for a 60 second video. On TV - from 3,000 to 80,000 rubles, depending on the length and number of times the clip is repeated (15,000 rubles for 6 exits, 80,000 for 21 exits of the 20-second clip). Placing a banner on an advertising structure in Penza averages 17,000 per month. Placement in magazines - from 10,000 to 40,000 per page.

    A worthy site can be made from 50,000 rubles, to ensure effective promotion - from 10-12 thousand rubles a month.
    As we said, having spent on advertising in traditional media, companies do not feel the need to pay a lot for advertising on the Internet. Although the purchasing power and activity of Internet users is on average higher than that of the audience of traditional advertising. Given the lower cost and the ability to transparently evaluate the results of advertising campaigns, the Internet, as a channel for selling its goods and services, remains at least underestimated.

    Interestingly, most of the sites unsuitable for promoting their goods and services were sites of companies that advertise in print media and on TV. This is very strange, given the quality videos, photographs, layout and texts written by editors and journalists, as well as the fact that the cost of the goods offered is clearly not in the economy segment. A product or service, shown in the best light on the pages of magazines and television, turned out to be completely unpresentable on the Internet. It is simply impossible to continue communication with a potential buyer using advertising materials so different in quality. After reading an attractive article, and after seeing the site, the potential customer loses all desire to go to the advertised store or salon.

    What do customers say?


    We sent out a questionnaire of 10 questions by mail to 3,000 Penza companies. Unfortunately, the number of completed questionnaires turned out to be much less than we expected, so we summed up the results only where the amount of data obtained is adequate for unambiguous conclusions.

    The quality and average cost of developing Penza sites

    In Penza, sites with a cost of 20,000 rubles or less still prevail. As an alternative, the services of mini-sites and storefronts are used.

    Price tags for professional websites of leading web studios start at an average of 50,000 rubles (in most cases, this is a catalog of goods and information about the company). For this amount, the customer receives: development of technical specifications, individual design, information management system on the site, filling the resource with customer materials.

    The survey results show that most of the sites that are made for Penza customers are still carried out by freelancers who are responsible for the entire development process. Unfortunately, in modern conditions it is impossible to be the best in everything. You either develop as a designer, or as a programmer or copywriter. This once again confirms the results of our parallel study of the sites of Penza companies, the quality of most of which is poor.

    Slice by field of activity of companies

    By the number of sites and the availability of the most expensive resources, the leading sectors are services (only 11% do not have their own site) and production (12% do not have their own site).



    Promoting and Tracking Online Advertising Performance

    Only 18% of respondents track the effectiveness of advertising in terms of return on investment. This suggests that most companies do not have an understanding of how effective advertising campaigns are, whether more or less money needs to be invested, and how effective the site is as a result. In fact, it turns out work for the sake of work, not for the sake of the result.

    The following diagrams show that less than half of those polled carry out a full analysis of advertising effectiveness. This is especially true for companies operating for Penza consumers.



    We get a vicious circle: companies do not track feedback with customers, which means they don’t know who they are and how to change their site for them, what advertising methods really work and what investment needs to be made to make advertising effective.

    Preference for integrated promotion and analytics is given to companies that have already changed several website options.

    Those who work with the first and second versions of sites mainly use search engine promotion and track only positions in search engines. Unfortunately, this approach does not provide any information for analyzing either the volume of the audience that comes to the site, nor the concept of its quality. About tracking profits is not even necessary.



    Disappointing conclusions


    If you project the survey data on 300 sites that are ready for comprehensive promotion (and it involves working closely with the analytics of the audience of the sites being promoted), then the potential number of companies that can really firmly occupy their niche on the Internet and adjust the advertising strategy as they work is only 150 -160 of more than 8,000 enterprises operating in Penza and the region.

    Unfortunately, the online advertising market and the level of sites in the Penza region remain at the level of the early 2000s and are developing very slowly. Despite the large number of enterprises in the region and a sufficient number of web studios and advertising agencies, customers prefer low-cost solutions in the field of Internet and more expensive in traditional advertising. This leads to a mismatch of the image of the enterprise in the minds of consumers with what actually exists. A company can offer a really good product or service, but show it on the Internet so that no one wants to deal with them.

    * Sources for the analysis of companies and sites were Penza’s online directories (e58.ru and others), a free print press (“Expensive Pleasure”, “SD”, Penza Business Magazine, etc.), and a portfolio of Penza web studios.