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Ad agencies, papers yearn for improved business climate

Slovakia's advertising and media market is slowly increasing in volume, but media experts warn that the figures are no reason for celebration. The volume of advertisements increased in first six months of 1998, they said, and should continue to drift slowly upwards. But the market still lags far behind that of the country's neighbours, and suffers from a poor political and economic climate.
"Some clients waited to invest in Slovakia because of the political climate and the market situation," said Peter Paška, commercial director at the Omnimedia ad agency. "Elections this year played a particular role in the volume of advertisements. But our client contacts did not have to be broken or decreased."


Waiting for a miracle. Slovak magazines and newspapers say the business environment must improve before ad sales climb.
Collage by Slovak Spectator

Slovakia's advertising and media market is slowly increasing in volume, but media experts warn that the figures are no reason for celebration. The volume of advertisements increased in first six months of 1998, they said, and should continue to drift slowly upwards. But the market still lags far behind that of the country's neighbours, and suffers from a poor political and economic climate.

"Some clients waited to invest in Slovakia because of the political climate and the market situation," said Peter Paška, commercial director at the Omnimedia ad agency. "Elections this year played a particular role in the volume of advertisements. But our client contacts did not have to be broken or decreased."

The latest figures for 1998 on the ad market have not been published yet, mostly because ad companies work on a business cycle that goes from January to August and then September to December. While 1997 was a record year in advertising in Slovakia, most advertisers say that 1998 has been a quiet year.

Roman Neczli, media manager at Mark/BBDO ad agency said their client volume was steady, and said that a new wave of advertisers might be just around the corner. "The decision of foreign companies to invest in Slovakia depends on the political situation. They expect a very steady climate," he said.

But Eva Babitzová, a media and advertising specialist with the economic weekly paper Trend, agreed that elections had affected developments on the advertising market in a particular way. "Many giant companies did not wait for election results, but instead planned to start their [fall] campaigns in October 1998 instead of September 1998," she said.

"They did not want to get mixed up with the pre-election [political] campaign, because they feared they might not attract enough attention from consumers," said Babitzová.

However, Babitzová argued that the elections had been an exception, and said that the ad campaigns of large companies were not normally sensitive to the political situation in general.

"Companies invest in Slovakia because of their marketing strategies and business activities," she explained. "They may decide to try and find a place [on the market] for their brand." The client contracts signed by big companies with Slovak ad agencies, thus, had little to do with the local political environment. "Their decisions have nothing in common with the situation on the media and advertising market," Babitzová concluded.

Business environment

Omnimedia's Paška said he felt that beyond political risk factors, the Slovak media market was developing strongly. "Thanks to [private TV station] Markíza, the volume of advertisements on the television market has become very important. I expect to see the arrival of new clients in Slovakia who may already have been in the Czech media market."

Babitzová conceded that the trend of advertising volume was on the upswing, but said it was still far from satisfactory. "The Slovak advertising market is not developed enough to catch up with its neighbours, not even with western European countries," she said. "We may see the volume of advertisements increase 30 to 40% this year, but that's not necessarily a sign of aggressive and successful market development, because advertising still does not have the same share on GDP that it does in other countries."

But Paška demurred again, saying that apart from Slovakia's strong television advertising market, print media were seeing their share of development as well. "The advertising budget for television is larger in relative terms than in other countries. But if we talk about print media, the weekly press is a popular place to advertise. [The weekly news magazine] Plus 7 dní has high volume of advertising because of its focus. It includes various topics about politics and so on."

According the Amer Nielsen Research group, Plus 7 dní increased the volume of its advertisements by 150.4% year-on-year in July 1998. Reported advertising volume at Trend and the business weekly magazine Profit increased as well, but not as dramatically as at Plus 7 dní.

Trend claims its figures rose 8.62% year-on-year in July, even though Amer recorded a 27.2% drop. "Most of our advertisers are foreign companies, or companies with foreign capital participation. We met with a reserved attitude on the part of our clients. They left their foot on the brake," said Elena Klimešová, Director of Trend Holding s.r.o.. Klimešová said that Trend disputed the Amer figures and would seek a retraction.

Profit officials claimed that advertising volume was generally down as well (Amer gave them a meager 8% y-o-y in July). "We can see a yearly increase in advertising numbers, but it's not what we were hoping for," said Vladimír Holík, product manager at Profit. "This year's elections may give a boost to the market. I think we can finally breathe out."

"After elections we expect to see a reasonable increase in advertising volume," said Juraj Pucher, sales director at Plus 7 dní. "It all depends on content, and readership goes along with it. Our 180,000 copies [sold] demonstrate it as well."

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