Romanias advertising market may record lower 2008 growth

In January 2008, the advertising agencies announced a growth target of the local advertising market of minimum 30%, but three months before the end of 2008 the representatives of the industry say the growth will not exceed 20%. Even these figures rely more on the increase in the tariffs paid by the clients for advertising space, mainly on TV, and less on the increase in the budgets of multinationals.
„After many years of spectacular growth in the sales of almost any category, it seems that the local market could not absorb equally big increases. Thus, in the case of most international companies, which have marketing budgets in close connection with the level of sales, the failure to meet the forecast growth has led to a decrease in the advertising budgets”, says Claudia Ion, Sales & Research Director at the TV station Kanal D.
Tiberiu Mercurian, marketing manager in the Laundry and Home Care department of Henkel Romania, sys the first months of 2008 witnessed the decline in the national currency and a rise in the oil price, with impact on the production expenditures.
„Added to these was an exaggerated rise in the tariffs charged by the media providers, especially on TV, much above the rise in the revenues of the industrial companies. The natural result was the re-evaluation of the planned investments”, says Mercurian. On the other hand, Thierry Millet, commercial manager at Orange Romania, considers the telecom sector, in general, was not affected by the world economic crisis and therefore the advertising budget of the company is growing according to plan.
The representatives of Unilever South Central Europe say they increased the budget in real terms versus 2007, establishing it depending on the context in the Romanian market, namely the growth opportunities offered by the FMCG market and the developments on the advertising market.
Carmen Chipuc, managing director at Starcom MediaVest Group, says there is room for growth on the market, even if at a lower pace, especially since Romania is still far away from the sums spent on advertising on other markets.
„Let us not forget the communication budgets are not just a form of confidence in the market but also a condition for the development of companies, and Romania continues to be one of the few markets with growing sales. In this context, it is hard to believe the advertising budgets will be lower. Maybe we will no longer witness the spectacular growth in the past years”, Chipuc underscores.
Next year, the market may witness a lower increase in the advertising tariffs. „I am firmly convinced the effects of the international economic crisis will be felt also next year. In this context, I believe the market could grow by maximum 12%. As to prices, the median increase stood at 30%-35%, and next year the big stations will increase prices below 20%”, says Laurentiu Ionete, general manager at ClirMedia.
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