The decline came during another eventful year for the world's ninth most populous country. Domestically, the news agenda was dominated by a series of disasters: the tragic explosion at the Sayano-Shushenskaya hydroelectric power plant, and the Moscow-Saint Petersburg train crash last month.
The impact of the credit crunch has led to the government taking a more active role in several sectors - quelling social unrest at a key cement factory, and propping up the domestic automotive industry.
‘The way the government's PR department managed the crisis was a remarkable example of a job well done, with little panic and timely government statements,' says Arkady Matkovsky, head of PR at telecoms giant TTK.
However, Matkovsky warns that the 2008 war with Georgia continues to define the country's international comms efforts to a large extent. ‘Our Ministry of Foreign Affairs failed to explain to the international media what this military operation was all about,' says Matkovsky - calling the operation a ‘disaster on the international stage'.
The lowdown
Until this year, the worth of Russia's PR market had been characterised by rapid development - surging 30 per cent in 2008 to approximately US$2.5bn. The Russian Communications Consultancies Association (Akos) estimates a figure of $2bn in 2009 - thanks to major declines in automotive, construction and b2b.
Elena Fadeeva, chairwoman of Akos and general director of Fleishman-Hillard Vanguard, points out the Russian market is somewhat unusual in the high proportion of PR activity that is handled in-house - approximately 60 per cent.
Influence
Key business media outlets, says Matkovsky, are daily newspapers Kommersant and Vedomosti, a joint venture with the Financial Times and the Wall Street Journal. According to media agency PHD, newspapers are not highly read and are in slow decline, driven by a highly fragmented tabloid landscape.
A proliferating magazine landscape, adds the agency, has seen the launch of such titles as Men's Fitness, Empire, Tatler and Viva in 2008.
TV remains largely state-controlled, led by Channel One and Rossiya.
‘Media such as web-based TV, video on demand and pay-TV are on the rise, but broadband cable penetration is still low, so they have little impact on the overall media environment,' says Matkovsky. ‘Foreign TV broadcasters have little or no presence in Russia.'
According to Nataliya Popovych, president of Weber Shandwick affiliate PRP Group, the internet has already overtaken TV as a more influential source of information. PHD names key portals as Yandex.ru, Mail.ru and Rambler.ru.
Social media are also becoming increasingly established. Popovych refers to new social networking sites lookatme.ru and theoryandpractice.ru as ‘trendy', while Russia's answer to Facebook - Vkontakte - already counts approximately 40 million users.
Russia counts about 80,000 Twitter users, meanwhile, but Popovych notes they are unusually active - ‘an average Russian Twitter user tweets daily'.
The impact of bloggers cannot be underestimated. Fadeeva points out that the country's most popular blogger - Rustem Adagamov - has been invited to cover President Medvedev. ‘It works very well for the Russian online audience, because it presents an everyman view of how government operates,' she explains.
Medvedev himself engages regularly via his own video blog, even publishing an early draft of his Address to the Nation online to solicit feedback from the blogosphere. ‘The internet is becoming more and more influential,' says Matkovsky. ‘It brings together the most passionate and politically active part of the public, and provides complete freedom of speech.'
Agencies
Accurate agency sizes are difficult to measure, but Fadeeva names several that dominate the market - including local players such as AGT, Ima Group, Insiders and Kros.
International players are present via joint venture or affiliate deals with local agencies. Joint ventures include Fleishman Hillard Vanguard and RIM Porter Novelli. Affiliate deals are more popular, led by Maslov PR (Ketchum), Mikhailov & Partners (Burson-Marsteller), PRP (Weber Shandwick), Imageland (Edelman) and SPN (Ogilvy PR).
According to Akos, key growth areas within PR agencies include business-to-consumer, corporate comms, crisis management, CSR and digital PR. After several years of steady growth, salaries declined during the first half of 2009 before stabilising in recent months. Several small agencies closed shop this year, while larger players cut headcount by as much as 30 to 40 per cent.
‘Overall, from the agency market perspective, the strong became stronger and the weak became weaker,' says Fadeeva.
Matkovsky, meanwhile, feels agencies need to evolve beyond an ‘underpaid and pressurised' environment. ‘The atmosphere in a typical PR agency can be a little like that of a sweatshop,' says Matkovsky. ‘Recent graduates tend to join agencies and work hard for a year or two. They are then headhunted and go to work for bigger corporations.'
Bellwether brands
Energy giant Gazprom, says Matkovsky, ‘has become synonymous with the Russian economy'. Another key energy player is Rosneft, alongside MNC ExxonMobil.
Matkovsky also singles out mobile telco Beeline for a superior PR operation, and notes that ‘thanks to a well chosen PR strategy by Roman Abramovich, Chelsea FC is a Russian brand these days.'
The public sector also spends serious money on comms - rolling out a raft of initiatives this year on everything from family values to industrial modernisation.
Politics
Lobbying has begun to play a ‘hugely significant' role in Russia, says Matkovsky, but remains completely unregulated. Increasing government involvement in the pharma sector, for example, has made public affairs expertise in this arena particularly valuable.
‘Most companies tend to hire in-house staff in order to get a better grip on their public affairs activities,' says Matkovsky.
Key stats
Population: 142 million
GDP: $12K per capita (52nd in the world)
Unemployment: 10 per cent
Languages: Russian is official. Twenty-seven others are co-official.
Religions: Russian Orthodox dominates, followed by a sizeable Muslim minority.
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