Ad spending in Russia grows with economy

International Herald Tribune / Bloomberg news wrote on August 15th 2007:

MOSCOW: Advertising spending in Russia surged to a record $4.1 billion in the first half, a report released Tuesday found, as companies fought for market share in an expanding economy.

Spending jumped 24 percent to 105 billion rubles, or $4.1 billion, from 84.5 billion rubles a year earlier, the Association of Communication Agencies in Russia said in a presentation. Television commercials accounted for half of the total.

"Growth in the first half was impressive," said Sergei Piskarev, president of the association. "No surprise - the country becomes wealthier, incomes are on the rise. We expect an even higher growth in the second quarter."

The top advertisers in the period were Procter & Gamble, the American company whose products include Pantene shampoo; Unilever, the European maker of Axe deodorant and Knorr soup; and Mars, the chocolate maker, according to TNS Gallup AdFact.

Rates for nationwide television commercials have surged 40 percent since last July, when limits were imposed on the amount of time networks could air ads, according to the association. That in turn has driven up rates for radio, billboard, newspaper and Internet ads.

Spending on television ads rose 27 percent to 52.1 billion rubles; print ads advanced 21 percent to 24.8 billion rubles; outdoor advertisement climbed 16 percent to 19.4 billion rubles; radio spending rose 24 percent to 5.8 billion rubles, and Internet spending jumped 52 percent to 2 billion rubles, according to the communications association. Other types of ad spending totaled about 1 billion rubles.

The outdoor segment, which was hit by a ban on cigarette advertising this year, was compensated by a growing demand from wireless operators, banks and beer producers, said Andrei Berezkin, head of Espar-Analitik, an industry researcher. Spending by brewers increased 40 percent this year, and retailers increased their ad budgets by 66 percent, he said.

The Russian advertising market may reach 230 billion rubles by the end of this year, with TV adds accounting for half of all spending, said Sergei Veselov, deputy head of analytics department at Video International, the largest Russian ad seller.

Video International expects advertising spending to grow to $13 billion in 2012 with television bringing in about 55 percent, Veselov said.