Russian advertising is big, bold and creative

Michael Hedges April 15, 2008

It’s routine now to report another multi € million deal or year of double digit growth for Russia’s advertising business. And, too, there are the legendary Moscow billboards (almost) the size of football fields. Russia is a big country, something all Russians feel, and its’ advertising creatives reflect it all.

Carat estimated Russia’s ad market to grow 46% this year, in a report released a month ago (March 17). GroupM predicted in January that Russia would contribute 6% of the total new ad spending this year. ZenithOptimedia forecast Russian ad spending would be ranked sixth in the world by 2011, growing 92% to US$ 8.3 billion.

Russian online advertising in the first half of 2007 was US$ 151 million, miniscule compared with the estimate of US$ 4.1 billion for total ad spending. MindShare estimated the 2007 online ad spending in Russia at US$ 369 million.

Advertising in Russia is also expensive. Video International and NTV Media, the largest media buying houses, keep raising rates. New rules coming into effect this year restrict the amount of allowed ad minutes per day. As a result rates have risen 237% since 2005. Tobacco ads are already banned from radio and TV, legislation was introduced earlier this month to extend than ban to all media, bringing Russia in line with the World Health Organization's Framework Convention on Tobacco Control.  

Russians love their television, watching dozens of channels as much as 5 to 14 hours per day, according to some reports.

With money pouring into Russian media to push Russian consumers ever harder crafting the message is becoming very creative. Sales houses like VI may get attention for controlling where the spending goes and all the major international ad networks are represented in Russia but hundreds of creative shops have opened in the last decade. The Russian ad industry is big and getting bigger.

Ask ten Russian media people to name the most creative agencies and one name comes up over and over: IQ Marketing. In business since 2001 the agency has a claim to fame in Russian advertising above all others. It has won two Cannes Lions.

In those six years, says spokesperson Marina Noskovich, IQ marketing has undertaken more than 600 projects for Russian and international clients. The ‘Beware of D@G’ campaign for online shop Ozon won the 2006 Cannes Promo Lion. Other Russian agencies have won international awards but, so far, only IQ Marketing has taken the gold.

“All the biggest advertising network holding companies are present in Russia,” said Ms Noskovich, “and they are now actively buying independent Russian agencies. At the same time among these companies there’s sort of ‘non-aggression treaty’: all have enough clients and agency conditions are actually the same.”

The ad market growth rate, spurred on by a consumer spending rush, is keeping Russian ad agencies quite busy.  “There’s no lack of clients,” said Ms Noskovich. “Oneofthemainreasonsistheconsumerboom. By the end of 2007 the consumer credit volume amounted to $ 130 billion - this figure is 57% more than in 2006. Nearly one-quarter of all products sold during the year was sold on credit. In this context, when people are always ready to buy goods, you just need to spend money on advertising to them.”

Ten years ago the Russian economy collapsed. Russian investment bank Troika Dialog forecast that in 2008 85 million Russians will have a monthly disposable income of $350 per capita. Credit cards and ATM machines are everywhere. By 2010 Russia will be Europe’s largest market for automobiles. All of this spells advertising.

Natalya Stepanyuk is one of the growing number of Russian media superstars. Starting in St. Petersburg, launching Eldorado Radio for Metromedia International, moved to Moscow and the ad business, first with Video International, then with McCann-Erickson. In 1998, when the business climate in Russia couldn't have been worse, she started an ad agency called The Point. Three years later she founded IQ Marketing and is the company's general director.

Attracting talent to the Russian ad scene, with plenty of work and money flowing, should be easy. It's still a challenge, says Ms Noskovich. “Russia has always been known for its great artists,” she says, recalling the ROSTA windows, propaganda certainly, created by artists and poets in the early 1920’s.

“The lack of tradition and ad schools resulted in the fact that ads and art don’t meet.”

But Russian advertising is different, right? Oh, yes, says Ms Noskovich. It’s free to do big things, she explains:

“The European market is conservative, the American one is totally regulated. In Russia, although people say that ads annoy them, you still have much more opportunities.

“In Russia (people) often complain about the (amount) of traditional advertising, especially on TV, meanwhile ambient-marketing really excites people, so long as it’s a high-quality product. In the USA you’ll never be able to make a fake blog – you’ll stand trial!  Our blogosphere isn’t regulated by the law, so you can realize some very interesting projects. Besides, where else you can in two days paint the town in order to make children feel less afraid? We did it in Beslan.”

Beslan, where terrorists murdered one out of ten children in September 2004, traumatizing the town and Russia. Children were afraid to go to school, parents were afraid to send them. Beslan, a depressed and depressingly grey city, needed brightness and color. IQ Marketing stepped in with bigness in mind.

An ad campaign called “Painting the City” was launched. Two airplane loads of paint, brushes and artists arrived to make a change. The entire town was painted. IQ Marketing won its first Cannes Gold Lion in 2005 for pro bono service. (See the video, have ample supply of Kleenex.)

Advertising is, indeed, the most obvious form of commercial communication. It’s impact on language and culture comes in for constant criticism yet when, as Marina Noskovich says,” art and ads combine,” something happens. And that’s what it’s all about.