Today.Az » Business » Prospects of advertising market
14 April 2015 [09:36] - Today.Az
/By AzerNews - Vusala Abbasova/
In the century of scientific and technical progresses, advertising has become an integral part of our daily lives. The concept of advertising was very likely born simultaneously with the concept of trade in human society.
Advertising, it is to no one's surprise, becoming one of the fastest growing industries in the world, bringing in huge profits for advertising corporations.
Azerbaijan saw progress in its advertising market over the past few years, although it still has a room to grow.
Today, due to the fall of world oil prices and the devaluation of the manat there is a recession in the country's advertising market which, according to experts, will continue in the future.
"Azerbaijan's advertising market has been influenced by the drop of oil prices just as other sectors have been affected," said Vugar Bayramov, the chairman of the Center for Economic and Social Development.
Comparing the domestic advertising market with neighboring Russia is impossible. Even Georgia's advertising market volumes were slightly higher than in Azerbaijan. Eighty percent of all advertising in our country accounts for the electronic media and television, 10 percent for radio and the remaining 10 percent accounted for the print media.
There was a time when a large proportion of all advertising came from newspapers, but the newspaper media has been reduced around the world and in this sense our country is not an exception, and therefore advertising blends in electronic media, for all sorts of portals.
"We predict that the volume of the advertising market in Azerbaijan will be reduced by about two times in the current year, respectively, to half the spending on advertising, Bayramov said in an interview to echo.az. This is connected with the global decline in oil prices and a reduction in revenues of various companies - potential advertisers."
"The advertising market in Azerbaijan was equal to 80 million manat in 2014, while this year the figure has halved in the worst case, and at best will drop to 70 million manat, but in any case, we will deal with the reduction of the advertising market," said the expert from Center for Economic and Social Development.
"I should note that the highest volume of the advertising market we observed was in 2008, when the money which was invested in it amounted to 103 million manat, " Bayramov said.
Meanwhile, analysts of reputable advertising agency Zenith Optimedia at the end of 2014, before the devaluation of the manat predicted that the market for advertising services in Azerbaijan in 2015 will be about $113-$114 million.
At the same time, specialists Zenith Optimedia say, budgets of advertising agencies in Azerbaijan are minor, as virtually all international customers are limited to adaptations in the country.
Significant obstacle that hinders the development of the advertising industry should be considered local advertisers, since for the most part they are not willing to increase their budget in return for a good creative.
On the other hand, there are modern media carriers in the country which open up new opportunities for advertisers to reach narrow target audiences and promote brands.
One of the problems in the media market is the crisis of content in local TV channels. Because of the ban on showing foreign serials, share of television advertising declined slightly. Thus, the share of TV advertising on the market fell from 73 percent to 72 percent over the last year. Despite this, according to forecasts in 2015, the value of net volume of a segment of TV advertising will reach 74.4 million compared to 68.3 million in 2014.
TV advertising was considered an engine of growth in the media market over the last ten years, its volume increased by 2.5 times over this period.
However, the rapid growth of online advertising is most impressive. Its indicators have increased nine times since 2007 - from 200,000 to 1.8 million.
The main news provider for such consumers is already the Internet and social networks, instead of newscasts on the national TV channels.
The role of the Internet can not be overestimated in future changes of media environment of Azerbaijan. More than a million of social network users, like Facebook, Twitter and other turned into active participants of the exchange reports and advertising information. While the share of the segment of Internet advertising is just under 2 percent excluding the budgets of social media in the total net volume. It will grow by about 77 percent due to rising prices and media Internet advertising in Azerbaijan during 2014 - 2016.
Zenith Optimedia's research shows the lowest rate of growth of the advertising market in Azerbaijan was observed in 2005 and 2013.
The highest percentage growth rates was registered in 2004 (62.9 percent), 2006 (41.9 percent) and 2008 (32 percent). The average rate will stabilized at around 13 percent in 2015-2016.
Overall global spending on advertising will increase by 4.4 percent. Initially, the group Zenith Optimedia expected a rise of 4.9 percent, but economic instability in Russia and Ukraine has negatively influenced the situation, as well as slowing growth in China.
The global advertising market is expected to grow by 5.3 percent in 2016 due to the summer Olympic Games and the US presidential election.