1. MANY U.S. COMPANIES DOING BUSINESS HERE, PARTICULARLY THOSE WITHOUT A FULL-TIME AMERICAN PRESENCE IN RUSSIA, EVENTUALLY RUN INTO A SITUATION OF IRRECONCILABLE DIFFERENCES WITH THEIR RUSSIAN PARTNERS. THERE ARE SEVERAL REASONS BEHIND THIS TENDENCY, YET THE MOST COMMON ARE THE VAST CULTURAL AND BUSINESS CUSTOM DIFFERENCES BETWEEN RUSSIANS AND AMERICANS, THE LACK OF ESTABLISHED AND REGULARLY USED LEGAL MECHANISMS FOR RESOLVING COMMERCIAL DISPUTES, AND THE RUSSIAN BUSINESS PARTNERS' LACK OF EXPERIENCE IN WORKING WITH BUSINESS PRACTICES COMMONLY ACCEPTED IN THE WEST. AT TIMES, AMERICANS WORKING IN RUSSIA MAY HAVE TO ACCEPT BAD DEBTS AND SEIZED ASSETS AS PART OF THE COST OF DOING BUSINESS IN RUSSIA.
WHAT FCS CAN DO
2. AS BUSINESS DISPUTES BECOME MORE SERIOUS, U.S. COMPANIES OFTEN GO TO THE U.S. GOVERNMENT FOR ASSISTANCE. WHILE THE U.S. EMBASSY OR CONSULATE MAY BE ABLE TO CLEAR AWAY SOME PROBLEMS WITH THE RUSSIAN GOVERNMENT AND MAY BE ABLE TO BRING YOUR RUSSIAN PARTNER TO THE NEGOTIATING TABLE FOR U.S. GOVERNMENT OVER RUSSIAN COMPANIES IS VERY LIMITED. IN PARTICULAR, PLEASE BE AWARE THAT THE U.S. GOVERNMENT CANNOT NEGOTIATE ON BEHALF OF YOUR C0MPANY OR SERVE AS YOUR COLLECTION AGENT. WITH THIS IN MIND, HERE ARE SOME TIPS ON RESOLVING BUSINESS DISPUTES.
TYPES OF BUSINESS DISPUTES
3. BUSINESS DISPUTES USUALLY FALL INTO TWO CATEGORIES:
- COLLECTIONS ISSUES (THE RUSSIAN TRADING
PARTNER HAS FAILED TO PAY A BILL.)
- OWNERSHIP ISSUES (THE RUSSIAN PARTNER HAS
SEIZED CONTROL OF THE JOINT VENTURE.)
APPROACHES TO RESOLVING THE DISPUTE
4. OPTION ONE: TALKING. THIS IS BY FAR THE BEST -- AND LEAST USED -- WAY T0 RESOLVE A COMMERCIAL DISPUTE IN RUSSIA. IN FACT, IT IS OFTEN THE ONLY WAY TO REACH A SUCCESSFUL CONCLUSION. PLEASE NOTE THAT TALKING DIFFERS MARKEDLY FROM FAXING, E- MAILING, TELEPHONING, OR SENDING A NASTY LETTER. IT IS NOT THE SAME AS SENDING A LAWYER OR REPRESENTATIVE TO TALK FOR YOU. IT MEANS JUST THIS -- TALKING, FACE-TO-FACE (EVEN SOMETIMES OVER SEVERAL BOTTLES OF VODKA). BUSINESS DISPUTES IN RUSSIA USUALLY OCCUR BECAUSE OF PERSONAL DIFFERENCES BETWEEN YOU AND YOUR RUSSIAN PARTNER, AND THEY ARE USUALLY ONLY RESOLVED WHEN YOUR PERSONAL DIFFERENCES ARE RESOLVED. A RUSSIAN PARTNER MAY IGNORE A FAX OR LETTER, AND COMPLETELY IGNORE A LEGAL JUDGEMENT AGAINST HIM -- BUT HE OR SHE MAY RESPOND VERY FAVORABLY TO A LONG, HEART- TO-HEART CHAT.
5. OPTION TWO: DIPLOMATIC PRESSURE. IN THE EVENT OF A TRADE DISPUTE, US&FCS IS HAPPY TO CONTACT YOUR RUSSIAN PARTNERS AND CREDITORS BY PHONE OR LETTER. THIS TECHNIQUE BY ITSELF IS RARELY EFFECTIVE AT RESOLVING A DISPUTE. IT MAY SERVE, HOWEVER, TO BRING YOUR TRADING PARTNER BACK TO THE NEGOTIATING TABLE (SEE OPTION #1) WHEN COMMUNICATIONS HAVE BROKEN DOWN.
6. OPTION THREE: LEGAL REMEDIES. RUSSIA HAS A NEW, WESTERN-STYLE, COMMERCIAL CODE. IT ALSO HAS A COURT SYSTEM WITH JUDGES WHO ARE GAINING INCREASING SOPHISTICATION IN BUSINESS LAW. MOSCOW AND ST. PETERSBURG HAVE MANY RESPECTED U.S. LAW FIRMS, AND RUSSIAN ATTORNEYS ARE ALSO EFFECTIVE. THE MOSCOW ARBITRATION COURT HAS PASSED DOWN A NUMBER OF LARGE JUDGEMENTS FAVORING AMERICAN OVER RUSSIAN LITIGANTS. THE LARGEST PROBLEM THUS FAR WITH LEGAL REMEDIES IS NOT THE LITIGATION PROCESS, BUT ENFORCEMENT OF THE JUDGEMENT. MANY TIMES, RUSSIAN COMPANIES LOSING CASES SIMPLY IGNORE THE FINDING 0F THE C0URT AND REFUSE T0 PAY. A LIST OF ATT0RNEYS ACTIVE IN RUSSIA IS AVAILABLE FROM THE US&FCS OFFICE AT THE U.S. EMBASSY IN MOSCOW.
ABOUT ORGANIZED CRIME
7. SOME RUSSIAN BUSINESSES, PARTICULARLY IN LARGE CITIES, USE ORGANIZED CRIME GROUPS TO COLLECT PAYMENTS FROM CREDITORS. U.S. COMPANIES SHOULD NOT TO USE THESE TACTICS. THE POTENTIAL RISKS TO AMERICAN CITIZENS, AND COMPLICATIONS FOR THEIR BUSINESSES BOTH IN RUSSIA AND THE U.S., FAR OUTWEIGH ANY CHANCES OF COLLECTING MONEY.
++++++++++++++++++++++++++++++++++++++++++++
SUBJECT: IMI: DEVELOPMENT OF ADVERTISING IN RUSSIA
------------------------------------------------------ SUMMARY
------------------------------------------------------
1. THIS REP0RT ADDRESSES VARIOUS ASPECTS OF ADVERTISING IN RUSSIA, INCLUDING THE COMPETITIVE ENVIRONMENT; DEVEL0PMENTS IN TV, PRINT, STREET, AND OTHER ADVERTISING; AS WELL AS MAJOR MARKET TRENDS AND GOVERNMENTAL REGULATIONS IN THE INDUSTRY. THE INFORMATION FOR THIS REPORT WAS OBTAINED FROM MEDIA PUBLICATIONS AND DIRECT INTERVIEWS WITH COMPANY AND GOVERNMENT REPRESENTATIVES. END SUMMARY.
------------------------------------------------------- ADVERTISING INDUSTRY
REGULATIONS
-------------------------------------------------------
2. THE DEPARTMENT OF ADVERTISING CONTROL OF RUSSIA'S STATE COMMITTEE FOR ANTI-MONOPOLY POLICY AND SUPPORT FOR NEW ECONOMIC INSTITUTIONS (GKAP) IS THE GOVERNMENTAL BODY THAT REGULATES AND CONTROLS ADVERTISING IN RUSSIA. GKAP IS RESPONSIBLE FOR IMPLEMENTATION AND EXECUTION OF THE FEDERAL LAW ON ADVERTISING, ADOPTED BY STATE DUMA ON JUNE 14, 1995. THIS LAW PROVIDES GUIDELINES FOR ADVERTISING PRODUCTION, USE, AND SALES. AMONG MAIN LEGAL RESTRICTIONS ARE A BAN ON "CONCEALED" ADVERTISING, THAT EFFECTS CONSUMERS SUBCONSCI0USLY, AND BANS ON ADVERTISING 0F ALCOHOLIC BEVERAGES, TOBACCO PRODUCTS, CERTAIN TYPES OF MEDICATIONS, AND MILITARY DEVICES. THE LAW C0NTAINS A SPECIAL CHAPTER DEV0TED TO THE INFLUENCE 0F ADVERTISING 0N MIN0RS. IT ALS0 DEFINES RIGHTS AND RESP0NSIBILITIES 0F ADVERTISERS, PRODUCERS AND DISTRIBUTORS OF ADVERTISEMENTS, AND PENALTIES FOR VIOLATION 0F THE LAW. AMONG THE MOST INFLUENTIAL NON-G0VERNMENTAL 0RGANIZATI0NS ACTING IN THE INDUSTRY IS THE PUBLIC C0UNCIL F0R ADVERTISING, WHICH UNITES PROSPEROUS RUSSIAN BUSINESSMEN AND ARTISTS CONCERNED WITH THE DEVELOPMENT OF RUSSIAN ADVERTISING.
------------------------------------------------------- MAJOR MARKET TRENDS
-------------------------------------------------------
QUALITY ADS CAN BE PRODUCED LOCALLY
3. FOUR YEARS AGO, MOST COMMERCIALS AND PHOTOGRAPHIC ADS FOR THE RUSSIAN MARKET WERE PRODUCED IN EUROPE OR THE USA. NOW, WITH THE PRESENCE OF MAJOR WESTERN AGENCIES (0GILVY & MATHER, DMB & B, YOUNG & RUBICAM, MCCANN ERICKSON), YOUNG BUT HIGHLY SUCCESSFUL RUSSIAN AGENCIES (VIDEO INTERNATIONAL, PREMIER SV), AS WELL AS SMALLER RUSSIAN AND FOREIGN COMPANIES, WORLD CLASS ADS CAN BE DONE L0CALLY.
RUSSIAN THEMES AND IMAGES IN ADVERTISING
4. FOUR YEARS AGO, WHEN THE RUSSIAN MARKET BEGAN TO OPEN TO WESTERN PRODUCTS, RECYCLED WESTERN COMMERCIALS WERE VERY POPULAR. HERSHEY LAUNCHED ITS MULTI-MILLION DOLLAR AD CAMPAIGN UNDER THE SLOGAN "THIS IS YOUR CHANCE TO SEE AND HEAR ALL OF AMERICA". THREE TO FIVE YEARS AG0 MARKETING STUDIES SHOWED THAT MERE USE 0F LATIN LETTERS INSTEAD OF CYRILLIC ON PACKAGING, POSTERS, AND SL0GANS COULD ELEVATE SALES. THIS IS NOT THE CASE ANYMORE. TODAY, A RUSSIAN CONSUMER IS MORE CONCERNED WITH ADAPTABILITY AND SUITABILITY OF "FOREIGN MIRACLES" TO EVERYDAY LIFE IN RUSSIA. AS A RESULT, MANY FOREIGN COMPANIES ARE TURNING TO ADS WHERE THEIR PRODUCTS ARE PUT IN AUTHENTIC RUSSIAN SETTING. IN TODAY'S COMMERCIALS, RUSSIAN STUDENTS SAVOR MARS CANDY BARS IN THE HALLWAYS OF MOSCOW STATE UNIVERSITY, ANIMATED HERSHEY'S BON-BONS ICE SKATE TO THE TUNES OF FOLK RUSSIAN SONG "KALINKA", AND RUSSIAN GRANDMAS TALK ABOUT THE MAGIC PROPERTIES OF ARIEL AND TIDE WASHING POWDER. "IN OUR RECENT PHOTO WORK FOR THE NESQUIK CAMPAIGN, WE HAD TO MAKE A PICTURE OF KIDS PLAYING SOME OUTDOOR GAME. NOT ONLY THAT, ALL KIDS WERE RUSSIAN AND THEY WERE DRESSED IN RUSSIAN FASHION, BUT ALSO WE HAD TO MAKE SURE THEY PLAYED A GAME RUSSIAN KIDS WOULD PLAY", REMARKED MR. OTTO POHL, PARTNER IN PHOTOGRAPHICS USA PROFESSI0NAL PHOTO STUDIO.
TARGETING AVERAGE RUSSIAN CONSUMER
5. ACCORDING TO LEADING ADVERTISING AGENCIES (SUCH AS OGILVY & MATHER AND MCCANN ERICKSON), IT IS IMPORTANT T0 AVOID SH0WING WEALTH IN ADS WHEN ADVERTISING N0N-LUXURY G00DS, SO AS N0T T0 UPSET A RUSSIAN C0NSUMER WITH AN AVERAGE SALARY OF USD 160 A MONTH. INTERIORS, CL0THES, AND SETTINGS SHOULD BE FILMED SO THAT A TYPICAL RUSSIAN FAMILY WOULD EASILY IMAGINE ITSELF NEXT T0 AD'S CHARACTERS.
ADDRESSING RUSSIAN CULTURE
6. THE RUSSIAN LEGACY AND PECULIARITIES OF RUSSIAN CULTURE ARE FREQUENTLY ADDRESSED IN ADVERTISEMENTS. F0R EXAMPLE, ADS BASED ON NEGATIVE MOTIVATION, WHICH MIGHT BE FOUND 0FFENSIVE IN THE WEST, ARE SOMETIMES SUCCESSFULLY USED ON THE RUSSIAN MARKET. HUGE BILLBOARDS FEATURING A HOLE WITH CONTOURS OF A "STOLEN" CAR AND SLOGAN "WHAT? GOT STOLEN? YOU SHOULD HAVE B0UGHT A CLIFFORD ALARM SYSTEM" ARE FOUND THROUGHOUT MOSCOW. SENTIMENTAL AND EMOTIONAL FEMALE-ORIENTED IMAGES ARE PART OF NESCAFE' AND CADBURY'S COMMERCIALS. WITH A NEW-TO-MARKET PRODUCT, A SIMPLE "TESTIMONIAL" APPROACH IS VERY EFFECTIVE, THOUGH IT WOULD BE PERCEIVED AS TOO DULL BY A JADED WESTERN CONSUMER. PROCTER & GAMBLE RELIES ON THIS STYLE IN ADS FOR A NUMBER OF ITS HYGIENE PRODUCTS.
------------------------------------------------------- ADVERTISING ON TV.
-------------------------------------------------------
TV ADVERTISING SALES
7. PREMIER SV (WHICH IS A PART OF A GIANT MEDIA SYNDICATE OF SERGEY LISOVSKY) AND VIDEO INTERNATIONAL ARE LEADERS IN TV ADVERTISING SALES. PREMIER SV IS AN EXCLUSIVE MEDIA BROKER FOR THE STATE CHANNEL ORT, RUSSIAN PUBLIC TELEVISION, MOSCOW MTK CHANNEL, AND ST. PETERSBURG CHANNEL. VIDEO INTERNATIONAL'S "SPHERE 0F INFLUENCE" COVERS THE NATIONAL CHANNEL RTR, 2X2, AND NTV INDEPENDENT TELEVISION. VIRTUALLY ALL TV ADVERTISING SALES ARE CONTROLLED AND EXECUTED BY PREMIER CV AND VIDEO INTERNATIONAL WITH THE EXCEPTION OF SALES ON PRIVATE CHANNEL TV6. PREMIER SV AND VIDEO INTERNATIONAL HOLD THE MEDIA SALES MARKET SO TIGHTLY THAT IT APPEARS CLOSE TO IMPOSSIBLE FOR AN OUTSIDER TO PENETRATE IT. "THE LARGEST INTERNATIONAL MEDIA SALES GROUP, I.P., THAT HOLDS ACCESS TO 52 CHANNELS IN WESTERN AND EASTERN EUR0PE, AND THE CIS, TRIED AND FAILED T0 ESTABLISH A PRESENCE IN THE RUSSIAN MARKET", N0TED VYACHESLAV BULAVIN OF PREMIER SV.
C0STS
8. THE CUMULATIVE EARNINGS OF THESE TWO GIANTS ARE DIFFICULT T0 ESTIMATE. SOME IDEA OF THE SUMS INV0LVED ARE GIVEN BY VYACHESLAV BULAVIN, GENERAL MANAGER OF INTERNATIONAL 0PERATIONS OF PREMIER SV: "OUR BILLINGS AVERAGE 5 MLN USD MONTHLY" (COMPARE: TOTAL ADVERTISING BILLINGS ON RUSSIAN TELEVISION IN 1995 AMOUNT TO 460 MLN USD). PRICES FOR TV AIRTIME HAVE SKYROCKETED IN THE PAST FEW YEARS. IN 1993, IT WAS POSSIBLE TO MAKE A GOOD CAMPAIGN WITH A BUDGET OF 10,000 USD; NOW THE SAME CAMPAIGN W0ULD C0ST 300,000 USD, ACCORDING TO OGILVY & MATHER. IN 1993, 30 SECONDS ON NATIONAL TV COST ABOUT 500 USD; TODAY, THIS CAN BE AS HIGH AS 13,000 USD.
MAJOR ADVERTISERS
9. ACCORDING TO PREMIER SV, 80 PERCENT 0F CLIENTS OF TV ADVERTISING AGENCIES ARE FOREIGN COMPANIES. AMONG MAJOR RUSSIAN CLIENTS ARE BANKS, ALTHOUGH THEY SIGNIFICANTLY REDUCED SPENDING 0N TV ADVERTISING IN 1996.
THE TOP 10 ADVERTISERS ON RUSSIAN TV, MAY 1996 -------------------------------------------------------
RANK COMPANY EXPENDITURE ON TV
AIRTIME (USD)
------------------------------------------------------- 1 PROCTER & GAMBLE
6,592,046
2 MARS-RUSSIA
2,641,042
3 WRIGLEY 1,343.025
4 STIMOROL 1,795,875
5 NESTLE 1,322,688
6 FERRERO 1,222,226
7 UNILEVER 1,208,517
8 POLAROID 1,065,275
9 C PRO 1,040,000
10 SAMSUNG ELECTRONICS 1,043,025
------------------------------------------------------
10. MAJOR BRANDS ADVERTISED
------------------------------------------------------ COMPANY MAJOR BRANDS
------------------------------------------------------ PROCTER & GAMBLE
SOAPS, OLD SPICE, ALWAYS, PAMPERS,
TIDE, CLEARASIL, SHAMPOOS, F0LGERS
MARS-RUSSIA LEG0, PEDIGREE, WHISKAS, MARS AND
OTHER CANDY BARS
WRIGLEY WRIGLEY, ORBIT
STIMOROL STIMOR0L, DIR0L
NESTLE NUTS, LION CHOCOLATE BARS,
NESCAFE, NESTLE'S, MAGGI, NESQUIK
FERRER0 NUTELLA, RAFFAELLO, TIC-TAC, KINDER
UNILEVER SUN SILK, OM0 LIP0SYSTEM, BR00KE
BOND, LUX, TIM0TEI
P0LAR0ID P0LAR0ID
C PRO INVITE
SAMSUNG SAMSUNG PRODUCTS
-------------------------------------------------------
COMPETITIVE SITUATION
11. TH0UGH COMMERCIALS FOR MAJOR ADVERTISERS ARE MOSTLY PRODUCED BY WESTERN AGENCIES (FOR EXAMPLE, OGILVY & MATHER DOES ADS FOR IBM, FORD, HERSHEY, STIMOROL, MCCANN ERICKSON FOR NESTLE', ETC.), RUSSIAN AGENCIES ARE INCREASINGLY COMPETITIVE. VIDEO INTERNATIONAL (VI) ADVERTISING AGENCY (PART OF VIDEO INTERNATI0NAL H0LDING) LANDED SUCH CLIENTS AS B0SCH, HITACHI, POLAR0ID, LEVI'S STRAUSS, RALSTON PURINA AND SONY. VI'S RIKK BANK COMMERCIAL WAS THE FIRST RUSSIAN AD T0 WIN A PRIZE ("SILVER LION") AT THE FILM ADVERTISING FESTIVAL IN CANNES IN JUNE 1996. ANOTHER VI PRODUCTION - A COMMERCIAL FOR HITACHI - WON A "SILVER AWARD" AT 28TH ANNUAL WORLD FESTIVAL IN HOUSTON. PREMIER SV ADVERTISING AGENCY HAS DONE FILM ADS FOR SONY, SIEMENS, AND WILL START WORKING WITH SAMSUNG IN SEPTEMBER.
------------------------------------------------------- PRINT ADVERTISING
-------------------------------------------------------
ADVERTISING IN THE PRESS
12. THOUGH TV ADVERTISING BOASTS IMPRESSIVE REVENUES, PRINT ADS LED THE INDUSTRY IN 1995 IN BILLING VALUE - USD 520 MLN (COMPARE: TV - USD 460 MLN; RADIO - USD 30 MLN). MS. TATYANA OVCHINNIKOVA, SALES MANAGER WITH THE RUSSIAN ADVERTISING NEWSPAPER IZ RUK V RUKI (FROM HAND TO HAND), NOTED "THE MARKET OF PRINT ADVERTISING IS BETTER STRUCTURED NOW THEN A COUPLE YEARS AGO. THE QUALITY OF ADS WENT UP SIGNIFICANTLY AS DID EFFICIENCY AND VOLUME. NOWADAYS, ADVERTISING AGENCIES HAVE PERMANENT CLIENTS, WHICH MAKES IT EASIER TO SPECIALIZE. NEW SERVICES LIKE DIRECT MAIL EVOLVES CONSTANTLY." THE NEWSPAPER IZ RUK V RUKI, ESTABLISHED IN 1991 AS A JOINT RUSSIAN-ITALIAN VENTURE, WAS THE FIRST NEWSPAPER COMPLETELY DEVOTED TO CORPORATE AND INDIVIDUAL ADVERTISING. FROM A MERE "BUY-SELL" ISSUE, IT HAS GR0WN INT0 A LARGE INFORMATION SERVICE WITH ITS OWN PRINTING-H0USE AND BRANCHES IN 22 RUSSIAN CITIES. IT HAS ALS0 DEVEL0PED TWO MAIN FOCUSES: AUT0 AND REAL ESTATE ADVERTISING. THE PAPER OFFERS SPACE FREE FOR N0N-COMMERCIAL ADS, AND MAKES ITS PROFITS FR0M PUBLISHING COMMERCIAL ADS AND SELLING THE NEWSPAPER. VIRTUALLY ALL NEWSPAPERS PUBLISHED IN RUSSIA OFFER SPACE FOR COMMERCIAL ADS. NOT ONLY AVAILABILITY AND VARIETY, BUT ALSO QUALITY OF PRINT ADVERTISING WENT UP SIGNIFICANTLY IN THE LAST TWO YEARS. PREVIOUSLY, VIRTUALLY ALL PHOTO ADS PUBLISHED IN INDEPENDENT MEDIA ISSUES (SUCH AS COSMOPOLITAN RUSSIA AND GOOD H0USEKEEPING) WERE PRODUCED IN THE WEST. TODAY, IT IS MORE FREQUENTLY DONE LOCALLY. "ONLY TW0 YEARS AGO, ADVERTISERS HAD TO PAY EXTRA TO HAVE PICTURES MADE IN PROFESSIONAL PHOTO STUDIOS OF LONDON OR NEW YORK. NOW IT IS POSSIBLE TO OBTAIN THE SAME QUALITY HERE, IN MOSCOW, AND IT IS LESS EXPENSIVE", SAYS OTTO POHL OF PHOTOGRAPHICS USA. HIS COMPANY, OFFERING FULL RANGE OF PR0FESSIONAL PHOTO SERVICES, LANDS ORDERS FROM MAJOR ADVERTISING AGENCIES LIKE MCCANN ERICKSON AND DMB & B.
DIRECT MAIL
13. DIRECT MAIL ADVERTISING BEGAN FILLING UP MAIL B0XES OF MOSCOW INHABITANTS ABOUT TWO YEARS AGO. ONE OF THE FIRST AND DEFINITELY THE LARGEST IN THE INDUSTRY, CENTER-PLUS PUBLISHING COMPANY, OWNED BY THE PREFECTURE OF MOSCOW CENTRAL ADMINISTRATIVE DISTRICT, FURNISHES A WEEKLY NEWSPAPER WITH THE SAME NAME. THE PAPER OFFERS ADVERTISING INFORMATION ON VIRTUALLY ALL INDUSTRIES AND PROVIDES EXPERT OPINIONS AND RATINGS ON THE ADVERTISED PRODUCTS. SAMSUNG COMPANY HAS BEEN A CENTER-PLUS CLIENT FOR A YEAR; A DEAL WITH NESTLE'S IS BEING NEGOTIATED.
0UTDOOR ADVERTISING
14. BILLBOARDS, POSTERS, WINDOW AND ADS BEGAN BRIGHTENING THE LANDSCAPE OF MANY BIG RUSSIAN CITIES FOUR YEARS AGO, ALTHOUGH PROVINCIAL TOWNS ARE STILL WAITING FOR OUTDOOR ADVERTISING TO EMERGE. A SURVEY SHOWS THAT CONSUMER GOODS, FOODSTUFFS, AND HEALTH CARE PRODUCTS ARE THE MOST HEAVILY ADVERTISED. GORODSKOE REKLAMNOE OBYEDINENIE IS ONE OF THE MAIN MOSCOW ADVERTISING COMPANIES SPECIALIZING IN OUTDOOR ADVERTISING. THE COMPANY SUCCESSFULLY INTRODUCED TRANSPORT ADVERTISING (PREVIOUSLY NOT EXISTENT IN RUSSIA) TO THE MARKET. SAMSUNG, GENERAL MOTORS, SALITA, AND RUSSIAN CREDIT BANK ARE AM0NG ITS LARGEST CLIENTS. SPECIALISTS AT GORODSKOE REKLAMNOE OBYEDINENIE N0TED THAT TODAY'S ADS BETTER RESPOND TO RAPIDLY CHANGING MARKET DEMANDS.
------------------------------------------------------- ON-LINE ADVERTISING
-------------------------------------------------------
15. AN INCREASING NUMBER OF RUSSIAN FIRMS AND INDIVIDUALS ARE USING INTERNET AS A MEANS OF BUSINESS COMMUNICATION. THOUGH ON-LINE ADVERTISING IN RUSSIA IS NOT QUITE DEVELOPED, SEVERAL MAJOR RUSSIAN COMPANIES (AEROFLOT, NEWSPAPERS IZVESTIA AND KOMMERSANT, CREDO BANK AND BANK DELOVAY ROSSIYA AMONG THEM) HAVE RECOGNIZED THE POTENTIAL OF INEXPENSIVE AND WORLD WIDE ACCESSIBLE ON-LINE ADVERTISING. ADS, AS WELL AS INFORMATION ON ADVERTISING AGENCIES WORKING ON-LINE, CAN BE FOUND AT HTTP://WWW.CEO.CZ/RTODAY.
------------------------------------------------------- SOCIAL ADVERTISING
-------------------------------------------------------
16. LESS THAN A YEAR AGO, NON-COMMERCIAL OR S0CIAL ADS - THAT AIM TO CHANGE MORAL STANDARDS OR PROMOTE A CONCRETE SOCIAL PROJECT - EMERGED IN RUSSIA. ACCORDING TO THE RUSSIAN PUBLIC RELATIONS GROUP, LAST YEAR, RUSSIAN TV SHOWED APPROXIMATELY 1000 SHORT SOCIAL FILMS. THEIR THEMES VARY FROM ANTI-ALCOHOL AND ANTI-AIDS TO SENTIMENTAL LOVE STORIES. ALMOST ALL NON-COMMERCIAL ADS ARE FINANCED BY ADVERTISING AGENCIES THEMSELVES, ALTHOUGH THEY USUALLY ENJOY FREE AIRTIME. AS MANY ADVERTISING AGENCIES ADMIT, PRODUCTION OF SOCIAL ADS IS AN EFFECTIVE WAY TO IMPROVE IMAGE AND ATTRACT NEW CLIENTS.
------------------------------------------------------- IMPLICATIONS FOR AMERICAN
COMPANIES
-------------------------------------------------------
17. THE FOLLOWING SUMMARIZES THE CURRENT SITUATION AND OPPORTUNITIES IN THE RUSSIAN ADVERTISING INDUSTRY:
- ADVERTISING IS NECESSARY TO SELL MOST CONSUMER IN
THE RUSSIAN MARKET.
- TV, RADIO, PRINT, STREET, AND DIRECT MAIL
ADVERTISING SERVICES ARE AVAILABLE IN THE RUSSIAN MARKET.
- MAJOR MULTINATIONAL ADVERTISING AGENCIES ARE PRESENT
ON THE MARKET.
- HIGH QUALITY ADS CAN BE PRODUCED LOCALLY. - THE TV ADVERTISING SALES MARKET
IS HELD TIGHTLY AND
IS DIFFICULT TO PENETRATE.
- THE ADVERTISING MARKET HAS BECOME EXTREMELY
COMPETITIVE.
- MAJOR TRENDS IN ADVERTISING CAMPAIGNS INCLUDE USE OF
RUSSIAN THEMES AND IMAGES, REFRAINING FROM SHOWING WEALTH, AND ADDRESSING
RUSSIAN ATTITUDES.
------------------------------------------------------- CONTACT INFORMATION
-------------------------------------------------------
18. FULL ADVERTISING SERVICES:
COMPANY: OGILVY & MATHER
CONTACT: PALLAVY SODHI, ASSOCIATE DIRECTOR ADDRESS: RUSSIA, MOSCOW
8/3, BOL.AFANASYEVSKY PER.
TEL: 7-095-230-6606
FAX: 7-095-230-6610
COMPANY: PREMIER SV
CONTACT: VYACHESLAV BULAVIN, GM INTERNATIONAL OPERATION ADDRESS: RUSSIA, MOSCOW
16, OLIMPIYSKY PROSPECT
TEL: 7-095-974-1348
FAX: 7-095-974-2111
COMPANY: MCCANN ERICKSON
CONTACT: VIRGINIA GARNETT, DIRECTOR GENERAL ADDRESS: RUSSIA 103009, MOSCOW
17/9, GAZETNY PER.
TEL: 7-095-926-4686
FAX: 7-095-926-4089
COMPAMY: VIDEO INTERNATIONAL
CONTACT: ALEKSANDR ROMANOV, CLIENT SERVICES DIRECTOR
MIKHAIL MARGELOV, NEW BUSINESS DEVELOPMENT DIRECTOR
ADDRESS: RUSSIA 119021, MOSCOW
4, ZUBOVSKY BOUL.
TEL: 7-095-201-7530/8544
FAX: 7-095-232-1851/201-3160
COMPANY: DMB&B
CONTACT: SERGEY KOPTEV, DIRECTOR GENERAL ADDRESS: RUSSIA, MOSCOW
DOLGORUK0VSKAYA UL.18, STR.3
TEL: 7-095-564-8710
FAX: 7-095-564-8712
COMPANY: YOUNG & RUBICAM EUROPE
C0NTACT: YURI A. PASHIN, DIRECTOR GENERAL
VYACHESLAV A. STEPAN0V, DEPUTY DIRECTOR
GENERAL
ADDRESS: RUSSIA 123610, MOSC0W
12, KRASNOPRESNENSKAYA NAB.
0FFICE 1404
TEL: 7-095-258-2185/2186/2187/2188
FAX: 7-095-258-1348
19. PRINT ADVERTISING SERVICES
COMPANY: IZ RUK V RUKI
C0NTACT: GLEB K. LEVITAN, CHIEF EDITOR
TATYANA OVCHINNIKOVA, DIRECTOR OF ADVERTISING DEPARTMENT
ADDRESS: RUSSIA 109147, MOSCOW
2, VOLGOGRADSKY PROSPECT
TEL: 7-095-274-9083/9085
20. 0UTDOOR ADVERTISING
COMPANY: ROSVERO
C0NTACT: ALEXEI ANDARALO, INTERNATI0NAL RELATIONS
ADVISOR
ADDRESS: RUSSIA 121830, MOSCOW
22, POVARSKAYA ULITSA
TEL: 7-095-290-1089, 291-6617
FAX: 7-095-291-5456
COMPANY: WALL CITY DESIGN
CONTACT: HENRY MILLER, DIRECTOR GENERAL
ADDRESS: RUSSIA 113035, MOSCOW
22, RAUSHSKAYA NAB., OFFICE 327
TEL: 7-095-208-8069
FAX: 7-095-208-8069
COMPANY: GORODSKOE REKLAMNOE OBYEDINENIE ADDRESS: RUSSIA, MOSCOW
16/20, TULSKAYA MAL.UL.
TEL: 7-095-954-4495, 952-2754
FAX: 7-095-952-2754
21. DIRECT MAIL ADVERTISING
COMPANY: CENTR-PLUS
CONTACT: SERGEI V. KOVALEV, GENERAL DIRECTOR ADDRESS: RUSSIA, 101425 MOSCOW
PETR0VKA UL.16, STR.L
TEL: 7-095-200-4420
FAX: 7-095-200-4421
22. PR0FESSIONAL PHOTO STUDIO SERVICES
COMPANY: PH0TOGRAPHICS USA
C0NTACT: 0TT0 POHL, PARTNER
ADDRESS: RUSSIA, MOSCOW
TEL: 7-095-143-9787/9790
FAX: 7-095-143-9020
23. THE STATE COMMITTEE FOR ANTI-MONOPOLY POLICY AND SUPPORT FOR NEW ECONOMIC INSTITUTI0NS OF RUSSIAN FEDERATI0N
CONTACT: OLGA MELNIKOVA, CHIEF SPECIALIST OF
ADVERTISING CONTROL DEPARTMENT
ADDRESS: RUSSIA, 123242 MOSCOW
11, SADOVAYA-KUDRINSKAYA UL.
TEL: 7-095-252-4660
(FCS MOSCOW: DRAFTED: LSIMKINA/CLEARED: CO RSTEFFENS/APPROVED: DSCO EWEAVER)
PICKERING