Did 1999 bring any good news to the ad industry?
Financially, it sure didn't. Industry insiders are unanimous in voicing their concern over meager ad budgets and the ad industry's lax development in 1999.
'The 1998 crash of the Russian rouble crossed every T in the advertising industry in 1999,' said Alexander Pavlovsky, managing director at GGK Ukraine. 'Many small-sized ad agencies were shut down while the profits of network ad agencies were diminished. In general, the volume of work in the ad industry dropped sharply.'
'It was a very challenging year on the financial side,' concurred Martin Alles, operations manager at Ogilvy & Mather.
Ukraine's political environment, made tense by the presidential elections in the fall, prevented entrepreneurs from opening new agencies and kept established agencies from making bold expansions.
'The development of the ad industry depends, in part, upon Ukrainian politicians' acts within a few months and their ability to attract foreign investors to the country,' Alles said. 'Like any business, the ad industry needs political and economic stability to flourish.'
Nearly across-the-board cuts in company ad budgets were perhaps most responsible for the tough times at ad agencies in 1999. Reduced ad budgets, in turn, were driven by reduced customer purchasing power.
'The Ukrainian customer became more selective [in 1999],' Pavlovsky said. 'Even white-collar workers with high-level incomes now take a more cautious approach to spending their money.'
Throughout the year, advertisers spent most their time just trying to hold onto existing clients. When agencies did go after new clients, they largely shifted their attention away from multinationals and turned to local clients.
'The struggle for the local client was in full swing in 1999,' said Nataliya Libet, financial director at Carat Ukraine.
'Advertisers focused on maintaining their current customers and preserving the place in the market they had carved out over the previous years,' Pavlovsky said.
The tight market drove a marked shift in the types of advertising being done in in 1999. Companies sought out new ways to reach a suddenly more thrifty consumer base. Direct mail, below-the-line advertising and direct marketing became more popular in 1999.
'Almost every day, I found a couple of messages in my mailbox,' Libet said.
On the other hand, as Pavlovsky noted, the Internet failed to gain ground as a popluar advertising medium.
'It is too early to speak about the Internet usage at a large scale in Ukraine.'
On the bright side, measurement of TV ratings became much more accurate in 1999.
'Instead of having a respondent keep a dairy of his TV watching preferences, marketing group [AGB Ukraine] installs a people-meter in the TV-set to record when and what a certain person watches.'
The global trend toward company mergers also affected Ukraine. Leo Burnett and the MacManus group, two U.S.-based ad agencies, merged. In Ukraine, Artware Company Advertising was absorbed by international group Euro RSCG Europe to form Euro RSCG Ukraine. And Moscow-based Actis Systems bought out two Ukrainian Web design studios, Armitage's Studio and Krypton Graphics.
In late November, the State Committee for the Protection of Consumers Rights organized the first national competition for distribution of social advertising by media outlets. Ads were aimed at encouraging people to quit smoking and drinking.
Nominations for best ads were made in five categories. The winners: Fakty (newspaper category), Consumer and Market (magazine category), Inter (TV channel), Nove Radio (radio station). There were two winners in the outdoor category: the team of Big Board billboard company and Priisk advertising agency; and Ukrainian Advertising Ltd.
