BTL Advertisers Lack Budgets
IMS Group shed 30 percent on the London Stock Exchange Thursday on insufficient business development reported by the company. IMS Group is one of the leaders of BTL-market of Russia, and its Russian revenues are projected 15 percent less than expected due to the alcohol crisis and a new Act on Advertising that recently took effect in the country.
Cannaccord Adams bank that works with IMS Group released its outlook simultaneously with the company’s statement. According to the bank's analysts, IMS will generate only $66.2-million from sales in Russia and CIS this year, i.e. 15 percent less than expected $78.2 million. The profit outlook fell 13 percent to $24.2 million from $27.7 million.
IMS Group has mentioned a few factors hindering the business. In Russia, for instance, it is the alcohol crisis. Producers shelved promotion on the lack of wine and spirits in the stores. IMS key clients – Diageo and Soyuz-Victan – have frozen their BTL budgets, Cannaccord Adams analysts said.
The budgets of various agencies built up thanks to the alcohol clients shed by 30 percent to 70 percent, said Vadim Kulikov, general director of Vitrina A Group. Before the crisis, the alcohol producers accounted for up to 10 percent of the BTL turnover, which fetched $1.35 billion past year.
The second backlash roots in the new Act on Advertising, which took effect in Russia on July 1, 2006. It materially curtailed the ad time on TV, having driven up prices by at least 20 percent. As a result, a few advertisers have sacrificed some portion of the BTL activities in favor of the TV presence.
www.kommersant.com
All the Article in Russian as of Aug. 25, 2006
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