LONDON: GroupM, the media arm of WPP Group, predicts in the latest of its This Year, Next Year series, that Putin's protectorate will supplant Spain as Europe's fifth-largest advertising economy within the next two years.

GroupM bases its forecast on an estimated 26% growth in Russian media investment this year and 21% in 2008 - not an overly optimistic picture in the view of some observers, who note that the former Soviet titan's massive energy assets will insulate it from any plunge in the global economy.

According to the report, the surge is due to a combination of rapid growth in consumer demand and increasing sophistication in media transparency, neutrality and metrics.

The report draws parallels with China's exponential growth, noting that in addition to consumer enthusiasm, the other main drivers are:

  • Excess demand for TV overspilling onto the internet.

  • Rapid increase in broadband penetration (80% Moscow; 25% national) - with a concomitant benefit for online video.

  • An increase in time spent online, with half of all traffic now classified as "heavy daily users".

  • Internet inventory sold like TV with good metrics and innovation.
The full TYNY: Russia report can be downloaded by clicking here.

Data sourced from GroupM; additional content by WARC staff