The Association of Communication Agencies in Russia, or ACAR, is calling on the government to stimulate advertising sales in order to boost consumer spending and help the economy.
Aleksandr Mitroshenkov owns a television production company. Like others, his company is suffering from the drying up of ad revenues. Global manufacturers have already cut their advertising budgets by up to 40 per cen .
He says, ad spending could fall by as much as 80% this year – and current legislation isn’t helping.
“European countries withdrew all the limits to advertising in the media as soon as they felt the crisis coming. In September they increased the time blocks for ads on television, which lowered the prices for it. They understand that if you stimulate the media industry, you stimulate consumer demand and thus economic growth. Our legislation hasn’t changed at all,” said Mitroshenkov.
He says that two years ago regulators cut the length of advertising blocks on Russian television by 25 per cent. That pushed prices up and now hurts the industry.
The media services group ZenithOptimedia forecasts advertising spending globally will shrink in 2009 for the first time in eight years
Advertising on TV and the Internet is the cheapest way of reaching the greatest number of consumers and will suffer much less than the radio and print.
But cutbacks will also hit the film industry, which relies on more expensive non-direct advertising like product placement and sponsorship.