Is VK social network for the new owners a treasure or a distressed asset?

Victoria Pavlova

VK went to structures very close to the authorities. The subject of the transaction was MF Technologies (MFT), which owns 57.3% of VK's voting shares. 45% of the ITF went to SOGAZ, the largest beneficiary of which is Yuri Kovalchuk (created the National Media Group, which includes Channel One, REN TV, Channel Five and others, headed by Bank Rossiya), another 45% went to Gazprom Bank, which transferred the shares to its subsidiary Gazprom Media, and the remaining 10% belong to Rostec. The amount of the entire transaction has not been disclosed, but judging by the cost of selling its stake by Sberbank, only one part of 45% can be estimated at a figure from 6.5 to 16 billion rubles. The money is very large anyway. “Novye Izvestia” tried to find out what the new owners will actually get - “the goose that lays the golden eggs” or “a suitcase without a handle”.

At first glance, VK's performance is very good. It is the leader among all social networks in Russia. The monthly audience of the social network has grown by 10.7% over the past 10 years, sometimes with links to Mediascope in some publications indicate that 71.8% of Russians visit this social network at least once a month! What are the advanced pensioners nowadays, of whom there are more than 42 million people in Russia ... That is, the audience of VK is several times larger than that of Instagram, Facebook or Tik Tok. It's just that professionals who are engaged in advertising on social networks and conducting media campaigns have a not so optimistic view of the prospects for VK.

The competition in digital is now more intense than ever. New niches appear regularly, which are occupied by new players. Among the competitors of VK are not only Odnoklassniki (have the same owners as VK) and Facebook, but also Instagram, Tik Tok and even the Telegram messenger. And the development trends of competitors do not speak in favor of VK.

Until 2014, while VKontakte was headed by its founder Pavel Durov, the social network was at the forefront of progress and looked like an island of freedom in the eyes of users. Even the protests of 2011-2012 owe much to this social network. But then everything changed dramatically: state control over the filling of the site became much tougher. And this applies not only to pirated films with music and 18+ content, but also to simple posts. VK has become synonymous with cooperation with law enforcement agencies. It is as easy as shelling pears to find yourself behind bars after some repost. Other social networks also collect as much personal data as possible. Facebook even convinces people to voluntarily allow spying on them (for iPhone owners, in which the collection of personal data by social networks is prohibited by default), and, if necessary, leaks all information to law enforcement agencies. But it does it much more delicately than VK. Facebook has a special section for law enforcement agencies, which describes who and on what basis can obtain information about the user. According to Zuckerberg, this requires court requests, drawn up in accordance with an international convention. At least users have a feeling that the social network will not disclose all the data simply upon request, for example, of an employee of the "E" center of the Ministry of Internal Affairs of the Russian Federation. The people feel a completely natural desire to feel at least some kind of security and migrate to foreign social networks. All this negatively affected the real live audience of VK. Why use this platform if there is another "island of freedom" - Telegram? Alisa Denisova, Marketing Director of Raddy, also notes the changes that have taken place.

- With the departure of Pavel Durov, VK has changed and clearly not for the better, in my opinion. Yes, many tools have appeared for marketing, it has become more convenient for business. But at the same time, the atmosphere was lost, which attracted people and motivated them to use the network in a more multifaceted way.

After Durov left, the evolution of VK slowed down. As a result, the social network turned out to be among those catching up with a large lag. Andrey Ermoshkin, commercial director of the digital agency Interium, notes that VK is just starting to look for itself.

- If we turn to the latest ratings and research, we can conclude that Instagram and even more so TikTok are very serious competition for traditional sites. This is because VKontakte is only looking for itself and is trying to introduce new formats into the work of the social network. And Instagram has already established itself as the world's modern social network, which has many opportunities for advertising. Most of the Internet users are present here.

For more than 7 years after Durov left, he has been looking for everything and will never find it. It won't even bring the wall back. Meanwhile, Instagram celebrated its eleventh birthday and Tik Tok recently celebrated its 5th birthday.

Independent research shows that VK's audience engagement is not at all as good as the Mediascope, owned by the state-owned VTsIOM, shows. An analysis of VK user profiles showed that only 44% of all existing accounts were active at least once in the last 2 years, and only 46% of them are logged in daily. But, which is even more important for a business project (the largest social network in Russia, bought for many billions of rubles, is no longer a hobby), VK is more popular in small cities with a population of up to 100 thousand people, and residents of megalopolises, in which the solvent audience, much less active. Muscovites are the least interested in VK.

And the theory is confirmed by practice: the bias towards the regions is noted by the product manager of the virtual marketer "Max" David Agiyan.

- The most active and solvent audience are Facebook and Instagram. VK shows less user engagement compared to Instagram and Facebook. Advertising in VK will be more effective in narrow segments and small cities due to the unpopularity of alternative sites.

Andrey Yermoshkin also draws attention to the imperfection of social network tools for entrepreneurs, which complicates their work:

- Of course, the most effective platform today is Instagram combined with Facebook and its capabilities. It is quite convenient here to promote products through targeting and, in principle, interact with the audience through your brand account.

Olga Malysheva, PR-specialist at the Kros communication agency, says that working in social networks is not the same as just posting an ad. For the successful promotion of a product or service, it is necessary to create meanings that will be close to the audience. And there are tools for this:

- The most solvent audience on Instagram and Facebook when it comes to selling goods and services. Telegram and Youtube sell meanings well, that is, they distribute information necessary for some purpose. Selling meanings is also a very important story for a media manager, and a mini-marketing research can always be done from a stream of comments.

So it turns out that the audience like VK is large, there are many registered users, but there is a minimum of sense from this. Moreover, many users, as Alisa Denisova assures, are useless bots:

- VK, despite its cumbersome ecosystem, is not so popular in advertising campaigns and no longer breaks records in terms of metrics and indicators. The reasons for this are logical: a bloated audience with millions of "dead" accounts and bots, audience specificity. Many, more precisely the majority, perceive VKontakte as a place to listen to music, view memes and communicate with friends. The percentage of activity among users in terms of sales is low. The most effective ad campaigns are conducted on Facebook and Instagram. In terms of coverage, VK demonstrates the best indicator with less efficiency.

Quantity is not synonymous with quality. It turns out that VK with its bloated audience, pumped by bots and inactive accounts, is slowing down its development. According to Megafon, VK lost its leadership in terms of traffic volume in Russia in 2021: after the launch of short videos of Reels, Instagram came out on top (35.5%). VK generates only 28% of social media traffic. Tik Tok is running out: traffic has more than doubled in a year. The social network provides 24% of traffic across Russia. And Tik Tok is no longer only schoolchildren, the 18-34 age group accounts for 54% of the audience. Telegram is also moving forward. It is not used as a media player and full-length films are not watched, so the traffic in it is small, but for 77% of buzzers, 65% of millennials and 63% of Generation X, it is the most popular messenger.

VK is now increasingly (especially after the appointment of Vladimir Kiriyenko as head) becomes an instrument for controlling the mood of the masses and identifying undesirable elements. More precisely, it becomes a tool for creating the appearance of control. The cleansing of the social network from politically active citizens has created a double negative effect. First, it led to the fact that business tools were in the role of an insignificant appendage, which is not enough for successful development. Secondly, there is no one to control. The people just fled to other networks. The new management of VK now has to choose between further winding up indicators to create an image of a successful social network and real work to create new products that will interest the people. But it will be very difficult to regain people's trust.