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Advertiser Spending Slowing
A survey performed by OMD Media Direction for Kommersant has examined the budgets of Russia's largest advertisers in 2006 and found that expenditures on ads by those companies has not kept up with the expansion of the advertising market, which grew by 29 percent last year, according to the Association of Communications Agencies of Russia. The statistics show the results of the new law “On Advertising,” which reduced advertising on television by a quarter. OMD Media Direction used data from TNS Gallup AdFact for advertising in the press and ESPAR Analitik for outdoor advertising. The advertisers mentioned declined to comment on their budgets.
Growth in ad spending among Russia's Top 10 advertisers was generally 16-26 percent, that is, less than the overall average of 29 percent. Sharp rises in advertising spending by Procter & Gamble and Baltica Beverage Holding last year were accompanied by consolidation of the companies. P&G's 2006 ad budget reflected its 2005 acquisition of Gillette. According to OMD Media Direction research director Sergey Artemov, the Gillette advertising budget in Russia in 2005 was $30-35 million. Those expenses combined with other P&G products gave the company a 42-percent higher ad budget in 2006. The 76-percent growth of Baltica expenses took place after Baltica consolidated its assets – the Vienna, Yarpivo and Pikra breweries.
The main reason for the increase in ad spending that was recorded was inflation. According to the Video International group, TV ad prices rose 40 percent in 2006, making it the first year rates have ever risen by more than 25 percent. The quantity of gross rating points (units representing the number of viewers watching a block of advertising) purchased by six out of the ten largest advertisers in Russia last year decreased in comparison with 2005.
Analysts observe that marketing conditions acted in conjunct with the new advertising law to determine ad budgets. A spokesman for Cheil Communications, which handles Russian advertising for Samsung, the only top-ten company to reduce its ad budget last year, said that advertising was curtailed because the household appliance market in Russia has stagnated.
ww.kommersant.com
All the Article in Russian as of Mar. 27, 2007
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