Latvian media advertising market has increased by 24 % during the year 2007 reaching 93.94 million lats
Riga, February 27, 2008 - Latvian Advertising Association (LAA) and media, market and public opinion research agency TNS Latvia have gathered the results of the Latvian media advertising market for the year 2007.
The member of the board of LAA, Ingrīda Krīgere-Lāce, informed that in year 2007, the Latvian media advertising market has increased by 24 % in comparison with year 2006 and currently constitutes 93.94 million lats. Media advertising market increase has maintained its development pace in comparison with the previous year, as in respect to year 2005, year 2006 showed an increase of 24.8 %.
The most significant media advertising volume increase could be observed online, constituting 81 %, the second position in increase is taken by the magazine category, which reached the mark of 45 %, and the third – in outdoor advertising – 24 %.
Of the total media advertising volume, the major part is made of TV commercials, taking 34.9 % of the Latvian media market, while newspapers take up 22 %, and magazines – 17.2 % of the total market.
Kaspars Ulsts, the head of LAA JIC voiced an opinion that the total increase of 24 % in media advertising market in Latvia was ensured by entry of new advertisers in the market – 2 %, increase of the existing advertisers’ advertisement volume (cm2, min, number of contacts) – 3 %, and 19 % - media price inflation.
According to the data of LAA and the media, market, and social research agency TNS Latvia, Ginta Krivma, the chairperson of the Board of TNS Latvia explains, that in considering the advertising market increase within the context of the Baltics, we must note that in year 2007, Estonia was the leader in growth, namely by +29 % in comparison with year 2006. However in case of Latvia, the increase was by 24 %, however for Lithuania, the increase has been significantly lower – by +15.6 %. Thus, the Baltic advertising market in general has grown on average by 23 %.
In analysis of this increase according to investments per one resident, Latvia with LVL 41 (EUR 59) is slightly above the average level of the Baltics, since in Lithuania this number reaches EUR 43 per one resident, and in Estonia – EUR 85.
In analysis of the correlation of advertising market against the domestic product, we can see that also here, Latvia is above the average for the Baltics with 0.75 %, while in Lithuania this parameter reaches 0.51 %, but in Estonia – 0.80 %.
In year 2007, traditionally the most advertised industry was mobile communications, and the financial industry took the second place. The third position was occupied by the motor vehicle field, which had stepped up by 1 spot since year 2006. By three positions, from the 7th to the 4th in the top of most advertised is the industry of entertainment events. The 5th – sphere of household products.
The top of most significant advertisers has remained unchanged in comparison with year 2006. Traditionally, the first place goes to Procter&Gamble with Pantene Pro-V, Head & Shoulders, Gillette, Pampers, Blend-a-med as the most advertised brands. The 2nd place – Tele2, and the 3rd place – LMT. The 4th place is occupied by Unilever, which in comparison with year 2006 has stepped up by 6 positions. The 5th advertiser by means of volume, as in year 2006, was Reckitt Benckiser with such most advertised brands as Vanish, Calgonit, Cillit, Calgon, Air Wick.
The firs place of the top of most advertised brands of year 2007 has been preserved similarly to year 2006 by “Zelta Zivtiņa”. It is followed by the biggest newcomer to the top – brand “Maxima”, which from the 11th spot in year 2006 has moved to the 2nd spot last year. The 3rd position is taken by the Tele2 brand, which in year 2006 occupied only the 5th position, while the 4th was unchangeably maintained by – O karte; however the TOP5 of the most advertised brands is concluded by Coca-cola, which in comparison with year 2006 has stepped up by 3 positions.
In the Western Europe in year 2007, a rather modest growth of advertising could be observed in comparison with year 2006. The majority of these countries, excluding Spain, experienced a dissatisfactory GDP growth. Also in the Northern and Eastern Europe, decreasing pace could be observed, except for Finland, where the GDP growth was maintained, and Poland, where the economy exceeded all forecasts.
Aivars Rudzinskis, chairperson of the board of “Lilit” publishing house indicates several reasons for the success in the magazine segment – specific audiences capable of paying, new magazines have appeared, increasing circulation and audience, content quality correspondent to the modern world. A. Rudzinskis emphasises that the key conditions for increase in advertising volume in the media group are innovations in the contents, format, marketing, as well as in sales. Innovations could be observed in clear target group positioning, as well as in correct consideration of pricing policy within the printed media.
Baiba Zūzena, director-general of SIA “TV3” reckons that the TV commercial volume has a stable market leader position of 34.9 % of the total media advertising market. The most significant TV commercial categories are cosmetics and hygiene goods, telecommunications and electronics, business, finance, and real estate. B. Zūzena underlines that currently the key trends in TV commercials are creative and integral solutions, new TV channels, and precisely defined target audiences.
Everita Ušacka, director of SIA “ Clear Channel Latvia ” tells that the outdoor advertising sector in year 2007 has shown good, stable income parameters. In comparison with the previous years, when increase of outdoor advertising was promoted by introduction of new formats (advertising on buses, mobile advertising, advertising on fire walls of buildings, and on construction nets) and by increase of advertising dues; in year 2007, we can observe a pace of increase, which could be compared with the base ratios of the previous year. At the foundation of the increase, mainly, is the increase of demand for outdoor advertising, and the price increase could be considered only as a secondary factor. For instance, Clear Channel advertising placement capacity in year 2007 has reached 87 %. An important factor is the growing proportion of outdoor advertising is the growing proportion of the total media market “pie”: in year 2005, it was only 5.5 %, and in year 2007 – it is already 8.6 %. In comparison with the average ratios of the European countries, outdoor advertising in Latvia is above average.
LAA president Andris Blaka forecasted that in year 2008, the increase in media advertising market will be above 20 %. The Latvian media advertising market is attractive to foreign investors due to its development pace. Latvia holds a wide variety of untraditional advertising development.
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