Carat Ukraine has reopened an office in Kyiv after four years' absence, and vows to be among the country's top 5 agencies by the end of 2003.
its doors in the capital with the brash declaration that by the end of 2003, it will rank among the nation’s five largest agencies.
After Carat, the media division of Britain’s Aegis Group, withdrew from Ukraine in 1998, it managed some of its Ukrainian business for clients including Philips, Merloni and Libress from its office in Moscow. Other work was delegated to Kyiv’s AITI Advertising.
Carat Ukraine CEO Serguei Mateev said that putting the agency on a fast track to dominance would require the retrieval of accounts sent to AITI, the retention of existing clients and the cultivation of new customer relationships.
Mateev said that the new Kyiv office has a staff of 15 in place, and there are plans to add an additional en employees by the end of next year.
The Bulgarian national said that his firm decided to re‑enter Ukraine because the advertising business is seeing rapid growth.
In a Sept. 30 interview published in Eastern Economist, Alexander Ruzicka, who heads Carat’s Central Europe operations from Wiesbaden, Germany, said that “a lot of our clients have stated that Ukraine is one of the key development areas.”
Mateev agrees, saying that the nation’s economic growth over the last two years has spurred client demand for enhanced service in Ukraine.
He said that researchers estimate that Ukraine’s advertising market is worth $120 million this year, and may grow to $180 million next year. He said that the nation’s ad revenues are presently at their highest level since independence, and that the television and outdoor advertising segments are leading the growth.
Statistics from the All‑Ukrainian Advertising Coalition credit television advertising with snapping up 60 percent of the cash spent on advertising in the country. Outdoor advertising accounts for between 16 percent and 20 percent of the market.
Mateev said that the greatest growth is expected in television advertising – where rate increases of about 30 percent are expected next year – and print advertising. Print occupies about 20 percent of the market today. Mateev said that competition might actually force rates down as new publications emerge. He said that unlike Russia, where there are numerous similar periodicals vying for advertisers’ attention, Ukraine still has few magazines in the various special‑interest segments, like men’s magazines and automotive magazines. The notable exception has been womens’ magazines, he said, with several new titles launched recently.
While others in the industry share Mateev’s view that the advertising revenues are poised for unprecedented growth, not all believe that there is much room for a feisty new competitor.
Tatiana Popova, managing director of Media Expert, a media buying and planning agency, agrees that the Ukrainian advertising market would continue to expand.
“Taking into consideration the current slowdown in economic growth in Western Europe and North America, many foreign businessmen are focusing on the growing markets of Eastern Europe and Ukraine in particular,” she said.
But All‑Ukrainian Advertising Coalition Chairman Maksim Lazebnyk said that over the past two years, the market for national advertising campaigns has become more or less predictable.
With roughly 1,200 advertising companies fighting for a slice of the country’s ad pie, competition is tight between regional and national ad agencies, he said.
“The lion’s share of companies’ national media budgets is divided between the four major players: D’Arcy, Provid/BBDO, Video International and Lowe Lintas Adventa,” Lazebnik said.
According to a report on open‑rate advertising expenditures prepared by AGB Ukraine, the nation’s biggest advertisers, including Procter and Gamble, Unilever and Nestle, already have client relationships with the four heavyweight agencies.
“DMB&B Holding, which includes D’Arcy, Arc Thompson, Media Vest and Starcom, serves seven of the country’s 20 biggest advertisers,” said Vadym Pustotyn, D’Arcy’s strategic planning and business development director.
Nevertheless, Mateev said that Carat Ukraine would immediately be classed among the nation’s top 10 agencies due to its volume.
He also said his firm had won new clients in the United States thanks to a proprietary software package the company developed to track and evaluate advertising revenues.
“In Ukraine, it can be done much easier,” he said.
Mateev said that Carat held meetings with current and potential clients in September to introduce the new office and present ideas.
“Negotiations are underway,” Mateev said. “Many companies are planning their budgets for next year and say they are impressed with our ideas.”
Carat is among the 10 world’s largest advertising agencies, with $14.7 billion in sales during 2001. Among the agency’s worldwide clients are Renault, Heineken, Coca Cola, Wrigley’s, Adidas, BMW, Nokia, Philips, Beiersdorf, Henkel, Ferrero, Merloni and Danone Group. The agency services about 360 brands.
