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Telecoms dominate advertising markets

DESPITE the release of figures showing massive growth in the Slovak advertising market, industry players and monitors are trying to play down suggestions of a boom in the sector.
Reports by monitoring firms ACNielsen and Taylor Nelson Sofres have put growth in the advertising market for 2001 at between 35 and 60 per cent.
According to a study by ACNielsen released in late January the market grew by more than a third last year, fuelled by massive growth in the telecoms sector.

DESPITE the release of figures showing massive growth in the Slovak advertising market, industry players and monitors are trying to play down suggestions of a boom in the sector.

Reports by monitoring firms ACNielsen and Taylor Nelson Sofres have put growth in the advertising market for 2001 at between 35 and 60 per cent.

According to a study by ACNielsen released in late January the market grew by more than a third last year, fuelled by massive growth in the telecoms sector.

Businesses forked out more than Sk11.5 billion in 2001 as telecoms operators ran extensive campaigns offering new services and insurance firms prepared for the end of a monopoly on third-party auto cover. Total money spent on advertising in 2000 stood at Sk8.4 billion, the monitoring firm said.

Another survey by Taylor Nelson Sofres put the 2001 sum at Sk12.64 billion, up 60 per cent year-on-year.

However, researchers from ACNielsen are warning that suggestions in Slovak media that there has been such an enormous growth in the market are unfounded.

The addition of new radio and TV stations to its monitoring had been partly behind the dramatic rise in figures, said the company's Branislav Gec. The study also did not take into account any discounts that could have been offered to clients, and figures had been calculated on official media advertising prices from various media outlets, he added.

"The real figure is probably around Sk8 billion and growth at about 15 to maybe 17 per cent. While it would be fantastic if there was growth of 35 per cent, that's just not realistic. Reality is quite different," said Gec.

Like many monitoring firms, media managers at companies had also estimated growth at about 15 per cent.

"It would be very surprising to have growth of more than a third. It would be amazing," said Marek Jakubovie, media manager at Universal McCann.

Healthy growth in the advertising market had been predicted for 2001. Austerity packages in 1999 and 2000 had hit household and firms' expenditures, but economic growth and rising household income were expected to drive market growth last year.

The repayment of government bonds to citizens last year gave households more disposable income while GDP growth in the first three quarters of 2001 stood at 3.1 per cent, up on the 2 per cent growth in the same period of 2000.

But while 35 per cent growth may not have been reached the actual growth of the market last year outstripped that in markets in neighbouring states, Taylor Nelson Sofres said.

Latest research by the group puts growth of the market in the Czech Republic at only 4.5 per cent last year.

The dominance of telecoms firms in advertising last year also continued. According to ACNielsen's figures, of the top 10 firms ranked by money spent on advertising the first three were the dominant telecoms operators: Globtel, Eurotel and fixed-line monopoly Slovenské telekomunikácie (ST).

Globtel splashed out nearly Sk467 million, Sk27 million more than mobile phone rival Eurotel and Sk100 million more than ST.

"This has been the same situation for the last three years and is connected with a tremendous boom in telecoms and the internet. Also, as companies approach the end of a monopoly they usually spend a lot more money on their image," said Jakubovie.

Former state insurer Slovenská poisťovňa, now owned by German insurance giant Allianz, moved into the top 10 for the first time last year.

It ranked seventh with a total of Sk264 million spent on advertising as it attempted to retain customers in the run-up to the loss of its monopoly on third-party car insurance this January.

ST will lose its fixed-line monopoly on January 1 next year.

Growth in the market, alongside continued heavy spending on advertising by telecoms firms, is expected to continue next year.

"Every year there is growth and this coming year shouldn't be an exception. Each year we see the market expand by between 8 and 10 per cent and I would predict that this year won't be much of a change," said ACNielsen's Gec.

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