VKontakte is the most famous social network in Russia and the largest in Europe, which today belongs to the Mail.Ru Group. In terms of popularity, the site is the first in Belarus, second in Russia, Ukraine and Kazakhstan, 22nd in the world. This project was launched on October 10, 2006. Its founders were: Pavel Valerievich Durov, Nikolai Durov and Dmitry Semiryazhko.
Initially, the resource was positioned as a social network intended for graduates of Russian universities and students. A little later, it began to be called a fast, aesthetic and modern way of communicating online. The daily audience of the site, according to data as of January 2014, is approximately 60 million people. Since 2014, the general director of the company is Boris Dobrodeev. Today this organization is very popular and rich, and many are wondering how much VKontakte costs .
How much does a social network cost?
The value of the VK company is estimated at $2.9 billion. Its full owner is Mail.Ru Group. On September 16, 2014, the deal to sell 48.01 percent of the social network for $1.47 billion was finally closed. The shares were acquired from Palagon Limited and Blesmir Development Limited. As a result, Mail.Ru Group was able to completely consolidate the social network.
The total cost of acquiring the resource was $2.07 billion, based on the amount paid in 2007 for a 52 percent stake.
Mail.Ru, the UCP Foundation, and ex-CEO of the social network Pavel Durov agreed that with the completion of the transaction, all mutual claims and disagreements regarding issues of management and ownership will be terminated. The new owner of the social network is also the owner of the My World and Odnoklassniki networks. They are controlled by businessman Alisher Usmanov.
How to get a piece of the digital music pie?
Unfortunately, not all of this money goes to musicians. Some of it ends up with streaming platforms (Boom, Apple.Music, Yandex.Music, Spotify, Deezer, etc.), some with labels and aggregators (Multiza, Freshtunes, OneRPM, etc.). A smaller portion goes to the musician.
Olga Seryabkina, photo from Instagram @seryabkina
At the same time, hitmakers earn very well: according to super.ru (source), Alexander Revva received about 15 million rubles for the hit “Hooked”, Olga Seryabkina receives royalties for streaming in the amount of 6 million rubles every quarter (3 months) (in on average 2 million rubles per month). Solid! Motivates.
Here, aspiring musicians are faced with another sad news: the majority of musicians’ income from streaming is distributed among the stars, who generate millions of plays for the platforms. Others earn much less: for most artists, income from touring and merch sales significantly exceeds digital sales.
The principle of making money from streaming itself is simple: the more people listen to you, the more you earn. Specific numbers depend on the platform: Apple Music , YouTube.Music and Spotify pay more, Boom , Deezer and Yandex.Music pay less. The exact amounts vary not only from service to service, but also from the listening format: whether it was a premium user or a free one (in this case, the musician receives income from advertising), in which country the lover of your work is located, etc.
Social network revenue
year 2009 . The social network managed to earn 1.094 billion rubles, which is almost 7 times more than it received for the same period last year.
2010 . Revenue amounted to 1.36 billion rubles.
2011 . They managed to earn 3.28 billion rubles, and the net profit was 516 million rubles.
year 2012 . Revenue amounted to 4.82 billion rubles, and net profit – 50 million rubles. The drop in profitability was caused by large investments in the organization's infrastructure and management.
year 2013 . The social network had revenue of 3.825 billion rubles, but experienced a loss of 137 million rubles.
year 2014 . The social network managed to earn 2.971 billion rubles in the nine months of 2014, that is, revenue increased by approximately 9 percent per year.
How to pay for VKontakte advertising
The advertisement can be paid for in any convenient way (terminal, electronic money, card), the service is launched if there is an amount of 100 rubles or more in the advertising budget, and the increase in the number of advertisements directly depends on the replenishment of the account (1 advertisement = 100 rubles).
In order to successfully develop advertising activities on VKontakte, it is better for an entrepreneur to delve into all the intricacies of the process on his own. It is important to have start-up capital and an analytical mind, with which you can determine a clear relationship between clicks on your ad and the receipt of orders with temporary and regional activity. An entrepreneur planning to launch 10–20 ads at once (quite a lot for the first time) is not recommended to start with an investment of less than 1000–2000 rubles.
All types of advertising and advertising campaigns use a single advertising budget, from which the cost of ad impressions and ad clicks is calculated.
You can pay for advertising on VKontakte as follows:
To pay for a VK advertising campaign, follow steps 1-4.
- Click on the “Advertising” inscription in the lower left corner of your personal page.
- In the window that opens, click on the inscription “Budget”. After clicking, the same window opens if you want to use advertising services for the first time.
- Next, select the payment type.
Individuals and legal entities have their own payment methods available.
Then we begin to pay for the service in a convenient way.
All popular payment methods are available.
How the price of the social network has changed
Initially, in 2006, Pavel Durov had only $30,000 in initial investment, which was provided to him by Vyacheslav Mirilashvili, his school friend. The next investor in the social network was Lev Leviev, who studied with Mirilashvili at school in Israel. The new project began to develop quickly, Pavel Durov’s brother and other programmers joined its development.
The new social network was rapidly developing and gaining popularity.
2007 . Already in July 2007, Mail.ru Group acquired 24.99% of the social network. And the social network itself is valued at $65.226 million.
2008 . The capitalization of the social network is also growing rapidly, and is already estimated at $780 million.
year 2009 . The social network is valued at $1.1 billion.
2010 . The social network's valuation was $1.5 billion.
2011 . The social network is valued at $1.7 billion.
year 2012 . The social network's valuation was $2 billion.
year 2013 . Forbes at the beginning of 2013 valued the social network at $2.2 billion.
year 2014 . The current price of the social network is $2.9 billion.
A little trick for setting advertising prices in a group
You can cheat a little and measure the demand for advertising in your VK group. Instead of writing your price, you can ask potential advertisers how much they are willing to pay.
Or you can initially indicate a slightly inflated price and then bargain; this is a standard technique for all sellers. But don’t overprice it, otherwise you’ll scare everyone away. Also, be sure to maintain relationships with your advertisers.
Periodically ask how they are doing, whether there is any benefit from advertising in your group. This will help you understand whether you are asking a lot for advertising or, on the contrary, not enough.
If advertisers are happy, then you can slightly increase the price for new advertisers; let the old advertisers keep the same price. If, on the contrary, they say that advertising in your group is of little use, then, on the contrary, reduce the price and develop the group. Offer discounts for placing a set of advertisements.
I also highly recommend going through similar groups and seeing how much they ask for advertising. This way you can derive the average price per subscriber unit.
Where is money made?
1. Advertising on a social network . It is one of the main sources of income. Advertisers are attracted by the huge traffic to the resource. The ability to customize and highlight the target audience plays an effective and important role. Targeted advertising brings in very large advertising revenue. Banner and contextual advertising also demonstrate effective results. 2. Online games and other applications . The most popular applications on the social network are games. Such games are specially designed so that you can play for free, but in order to achieve high levels of play it was necessary to constantly buy all kinds of virtual goods. Otherwise, there is simply no progress in the game.
3. Commercial and private advertisements and so on . This method of making a profit today is just beginning to gain momentum.
4. Additional services . Users and companies are offered various additional services, for which a certain fee is naturally charged.
5. Paid services . At the moment, most users do not approve of this policy. However, times are changing, and the social network is gradually introducing such services.
6. Sale of licensed content . Already at the beginning of 2015, vkontakte plans to complete the process of content legalization. It is planned that users will be charged a certain fee for viewing and listening to content, or certain advertising will be included when viewing. The social network wants users of the service to hardly notice the changes, so that they are as comfortable as possible. Accordingly, the social network will take a certain percentage from the sale of content.
How much does VKontek advertising cost?
The write-off of funds for promoting the service is as follows:
- For ad impressions.
- Payment for transitions.
In the first case, the price for 1000 impressions is from 0.7 Russian rubles, and in the second - from 2 rubles per click on a link, but an advertising campaign for some groups of goods (services) should begin with the recommended prices indicated in the column on the right.
The minimum cost per thousand impressions of an ad in the left column of the menu can start from 1.2 rubles
Another important point in promoting VKontakte is the analysis of your own advertising. It is important to learn how to select the optimal prices for publishing advertisements (for each group of goods and services) in the region, group and time interval you need. In different areas and geographical locations, the differences can be significant.
Taking these factors into account, it is advisable to start paying for the service with minimum prices or close to them, and then gradually increase them to find a balance between user activity and the cost of advertising itself.
The minimum cost per click on an advertisement depends on the topic and settings.
What was Durov's salary?
According to the employment contract, Pavel Durov received 26.4 thousand rubles a month at the beginning of 2007, but already in 2008 his salary was increased to 345 thousand rubles.
In January 2010 , after Mail.Ru Group became 40% owner of VKontakte LLC, a new employment contract was signed with Pavel, which reflected a monthly salary of 552 thousand rubles. This salary increase was justified - the project showed good financial results. Then Durov’s salary began to grow much faster, while there was no connection to the financial performance of the social network he headed.
- Since May 2010, the salary has doubled, it amounted to 1.1 million rubles per month.
- In 2011, the figure was 2.3 million rubles per month.
- In 2012, the salary was 3.5 million rubles per month.
- In March 2013 , the salary reached 5.76 million rubles per month.
How to save your budget on VK advertising
VKontakte targeting (ultra-precise ad targeting) is one of the features of the advertising mechanism. Unlike conventional contextual advertising, which is aimed at widespread distribution among users without a specific focus, targeting has a clearly defined audience that the entrepreneur needs.
The main targeting parameters are geographic and demographic references of the ad, interests, education, user positions and much more. Targeting allows you to significantly save financial investments by initially screening out unnecessary categories of people, i.e. if an entrepreneur sells microscopes, then he will not advertise them to builders.
In Dreams Why VKontakte will not cost $10 billion
More than a week has passed since the announcement of the deal to acquire 48 percent of VKontakte shares by the UCP fund. However, they don’t stop discussing the deal on the Internet - there were too many mysteries surrounding this story. One of the still unsolved mysteries is how much customers valued the social network. Or - to ask a more general question - how much can you earn on a site with 200 million registered users?
UCP refuses to name the amount paid for almost half of VKontakte; however, the media willingly do this for him. Hopes&Fears wrote that the deal was worth $2.8 billion, Forbes wrote that it was $2.2 billion, although the social network’s shareholders initially valued the asset at $3.1 billion.
It is not so important which of these three figures is correct; what is important is that VKontakte, by all estimates, is worth more than two billion dollars. This is an outstanding result both against the background of the real economy (Aeroflot is valued cheaper on the market according to quotes from the Moscow Exchange) and against the background of Internet assets (the entire Yandex, a world-famous search engine, is worth $7.9 billion).
Finally, this is a phenomenal result if we compare the value of VKontakte with its financial indicators. One can only guess how the social network has performed in this regard in recent quarters (VKontakte is not required to report in detail, since its shares are not traded on the stock exchange), but it is known that the social network’s revenue in 2011 amounted to 3.29 billion rubles, and in 2012 this figure increased by 44 percent. That is, over the last year, VKontakte brought in 4.7 billion rubles in revenue. Even if we assume that at some point all the company's revenue will go exclusively to shareholders (that is, the social network's expenses will be reduced to zero), investors will have to wait ten years for their investments to pay off.
It may seem that compared to foreign social networks (LinkedIn, with a comparable number of users, is valued at 20.7 billion, Facebook at 62 billion), VKontakte is not worth very much. However, a valuation of $2-3 billion seems fair for VKontakte, a network secondary to its competitors and aimed only at Russian-speaking users. So fair that UCP’s widely publicized intention to increase the network’s capitalization to $10 billion in five to ten years looks utopian.
Here are a few reasons why this will never happen:
VKontakte is an extremely risky asset
. And the point here is not that Pavel Durov may soon be imprisoned in connection with a collision with a policeman. The fact is that so far the structure of the company’s shareholders looks potentially conflicting: two large shareholders who are in a relationship of the “everything is complicated” type (we really don’t know how complicated), plus the “pendulum” Durov, who has the opportunity to adjoin either one then another to make specific decisions. In addition, Durov is also the general director of VKontakte, which means he is able to destroy the company from the inside - especially if he does not like the policies of other shareholders. The main asset of VKontakte is not an office with computers, not servers, or even 200 million registered users. The main asset is the developers who managed to make VKontakte, according to a number of indicators, the most convenient social network in the world. Durov nurtures them in every possible way, pays them crazy amounts of money. It’s not hard to imagine that they will follow him, if something happens. Destroying VKontakte from the inside is one of the options that Durov probably keeps in his eccentric mind.
VKontakte is a reputationally flawed asset
. If UCP really wants to lead VKontakte to an IPO, then it will have to explain to potential investors how illegal content appears on the network - and whether the social network is going to fight it. Mail.ru, when it went public, more or less succeeded, but at that time VKontakte was only one of the group’s assets, in which it did not have a controlling stake. If UCP abandons pirated content, the Russian social network will lose one of its competitive advantages.
“VKontakte” is an Internet asset
. Of the major Internet companies that have gone public in recent years, only a few can boast of rising stock prices. Groupon, Facebook, Yandex and many others have shares trading below the offering price: it turned out that it was still somehow possible to find initial buyers for the securities of Internet giants, but then their shares began to fall in price. In the wake of Facebook's IPO, which resulted in multibillion-dollar losses for investors, Internet companies are viewed with much more suspicion than before. There is a good chance that in ten years the Internet boom will completely die down, and some other bubble will appear in the market instead.
VKontakte has exhausted its growth potential
. The Russian social network already has 200 million users - a little more, and VKontakte will receive the absolute majority of the Russian-speaking population of the planet. This means that increasing capitalization lies in monetizing content. VKontakte is undersold compared to Facebook, and theoretically this has potential, but in reality, the absence of intrusive advertising is perceived by many as a competitive advantage of the social network. As soon as it starts to be heavily sold, users from VKontakte can move to other sites.
How much does a VKontakte group cost?
The first thing you need to consider is the number of living subscribers in the group.
Live subscribers mean people who joined the group of their own free will. 1. The cost of a live subscriber in an entertainment/informational group is 1.5-3 rubles
.
2. The cost of a live subscriber in a commercial group is 3-5 rubles
. The price is higher because promoting a VKontakte (commercial) group is much more expensive.
- If the group of the first type has 100,000 subscribers, then its price will be 150,000 - 300,000 rubles
; - If the group of the second type has 100,000 subscribers, then its price will be 300,000 - 500,000 rubles
;
It is also worth considering the number of bots, offers and blocked users in the group. They are recruited to increase the number of subscribers. They themselves are of no benefit and can only cause harm to the group. A large number of such individuals can significantly reduce the price of the group.
- If the group of the first type has 100,000 subscribers and 30% of them are bots, offers and (or) blocked subscribers, then its price will be 30% less than the estimated price: 105,000 - 210,000 rubles
; - If the group of the second type has 100,000 subscribers and 30% of them are bots, offers and (or) blocked subscribers, then its price will be 40% less than the estimated price: 180,000 - 300,000 rubles
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