Unique Characteristics and Prospects of Armenia’s Online Advertising Market

Anna Barseghyan


E-marketing company IP Marketing [RU], specializing in online marketing and promotion, also has an Internet Sales House, which is the exclusive retailer of advertising for its clients.

IP Marketing founder Arsen Sultanyan finds that though Armenia’s online advertising market has a small budget, it is steadily developing and will undergo significant changes in the coming years. 

What are the unique characteristics of Armenia’s online advertising market?

The market is quite small and limited. It can be said that the market was born in 2009, beginning with banner advertising, SEO on a small scale, and social media marketing in Facebook.

The market is now in the development stage.  Today, the online advertising budget is about $1 million USD — 2% of the TV advertising budget. This is not an official figure, but our company’s expert assessment. There’s no clear figure also for [the number of] internet users.

According to the National Statistical Service of the Republic of Armenia, in 2012, there were 1 million 914 thousand internet subscribers, but this doesn’t tell us the precise number of users, since one member in a family is an internet subscriber, while all members use it. In addition, there are users who subscribe to both broadband and mobile internet. 

When we develop a strategy for a client, we simply analyze a website’s audience, based on logic and analytical thought. There are also no online audience measurement tools [being used in the Armenian market]. We are now working in that direction, negotiating with foreign companies on audience metrics tools, which will make it possible to measure a website’s audience, including the education level, sex, age, and preferences of its members.

This tool is necessary in today’s market, since audience measurement will lead to the effective use of the budget, and consequently, an increase in the budget.

Today, companies often place ads, based on the number of site visits or on its being registered on [the Armenian web resources rating site] Circle.am. At this stage, this is considered normal because any developing sector has its transition period. 

What is the price range of website advertising?

A website can have quite a high number of visits and the monthly price of placing an ad can be 350,000 to 500,000 AMD [about $852 – $1,217 USD].

If we approach the matter professionally, we have to measure advertising online per 1000 impressions; consequently, the price has to correspond to the price set for 1000 impressions.

On news websites and especially on social networking sites, the fee for advertising is relatively low. In general, only thematic sites have a high price for 1000 impressions, but that price is justified because the advertiser immediately finds its target [audience]. 

If a client’s target, let us assume, is women, he can place an ad on a site on which 90% of its visitors are young women and won’t need to place an ad on 4–5 news sites, to reach his target. 

IP Marketing has an Internet Sales House that includes 15 websites. We exclusively sell advertising to those websites on a monthly basis, as that’s what the market wants. I hope that before the end of this year we’ll be guided by the cost per 1000 impressions model and the market will adopt this.

Advertising campaigns on Facebook today are often implemented using dishonest methods — extorting “likes” and deceiving users. How should a competent advertising campaign be carried out?

This is a very painful topic. I am always fighting for the market to be more professional and competent. I strongly look down on those ads that are aimed only at increasing “likes” — without target selection. What is the company going to do with those “likes”? I don’t think even it has the answer to this question. 

This forms a very negative attitude among especially those who are the brand’s or company’s potential consumers (mid- to high-income earners, the highly educated, those who understand quite well the negative aspect of that move).

Promotion on Facebook aims to [further a company’s] image. It ensures a brand’s communication with its current and potential customers. If the communication is carried out using dishonest means, naturally, it leads to a negative attitude toward the brand. But the brand enters the social network for the exact opposite purpose: to make the attitude toward it more positive and to show that it is so close to the consumer that it can answer consumers’ questions immediately and at any moment. 

It’s possible that the client himself doesn’t realize that this is not good for his business, finding himself at the services of an individual or company who advise him to make this move on Facebook. 

A lot of attention has to be paid on content and the advertising target when promoting a brand: on offer must be that which the brand needs and what the potential consumer has to see.

When a potential consumer sees the ad and clicks on the link, she has to land on the corresponding page where her interest will be met. For example, if a supermarket sale is being advertised, the potential consumer has to land on the supermarket’s [Facebook] page and avail of that sale — not click on Kim Kardashian’s photo and land on the supermarket’s page, like it, read about Kim Kardashian and leave. 

What is your opinion on the effectiveness of advertising on Facebook?

First, you have to clearly understand why Facebook advertising is used. 

For brand communications and to convey information about products and services, it’s quite effective. It works poorly for advertising that promotes a brand’s image because there’s no animation, movement, voice, or color. For ‘image advertising,’ using flash banners and video are preferred.

While on websites, a product will be successful in terms of both image and sales if the advertising is properly organized. There are numerous details, to which you have to pay attention, beginning from the color, the size, and content of flash banners, and ending with their position on the website. 

You have to also monitor their effectiveness. There are various tools to measure an ad’s effectiveness. We use the Russian platform ADFOX, of which we are the representative in Armenia.  Through ADFOX, in-depth analyses while the ad is live are possible — how many people saw it, how many people clicked on it… it also allows you to display a different ad for the same product to the same visitors and so on.

What should be the main steps for promotion for news websites? 

If a news site is unable to ensure quality, regardless of how much traffic we bring [to the site], readers will come and [then] go. But if a news site is of good quality, it publishes its own content, works efficiently and so on, we, for example, use different methods, beginning from SEO, especially increasing its ranking on Google, and ending with ensuring activity on Facebook and other social networking sites. 

Activity on Facebook is ensured as follows: we create a page and work to increase [the number of] “likes”; we upload articles on the news outlet’s Facebook page or teach the news outlet’s employees how to properly upload articles. 

What prospects for developing and reforming [Armenia’s] online advertising market do you see in the near future?

I think, placing ads on the mobile versions of websites will develop in the near future; today, the mobile versions of websites in Armenia, in terms of advertising, are empty. 

The more companies that understand that effective advertising can be implemented online and adapt their budget toward online advertising, and the more they understand that online advertising, compared to other types of advertising, is the cheapest and easiest to measure, the faster the online advertising market will grow, websites will begin to have advertising revenues, and consequently, media content will begin to develop. 

Today, we are 2–3 years behind Russia, where much has developed; for example, real-time bidding, which allows clients to place bids (as at an auction) and display ads on several sites.

Real-time bidding for Armenia is a tool for the future, and I hope that in two years, Armenia’s market will be ready for this system.

Interview conducted by Anna Barseghyan

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