The FINANCIAL — The total profit of Georgian TV companies reduced by USD 40, 161, 547, or more than 16.5%, during the first ten months of 2015 compared with the same period of last year. TV company Rustavi 2 attracts the largest share of advertisers, according to TV MR GE, Nielsen Television Audience Measurement. With over USD 18 million Mondelez leads the list of the top ten companies with the largest ad expenditures in 2015.
TV’s profit amounted to USD 203, 515, 818 in January-October 2015, down from USD 243, 677, 365 in the same period of 2014. The figures are counted according to official price lists and do not take into consideration any discounts between TV companies and advertisers.
In 2015, the Georgian Parliament has approved a bill of amendments to the law on advertisement. The bill had been proposed by the Georgian National Communications Commission (GNCC). The main issue that caused most of the controversy – 20% limit per hour and date of its enforcement.
Previously television stations could allocate 20% of total broadcasting time per day to advertisement; as no hourly limit existed, broadcasters put more ad spots in primetime to maximize revenues, resulting in lengthy, well over 12-minute ad spots in primetime.
The Georgian National Communications Commission, which drafted the bill, and the Georgian Dream parliamentary majority, cite the need to put these regulations in line with the European standards as the reason behind the proposal.
Under the Association Agreement with the EU, Georgia undertook commitment to introduce 20% hourly limit within five years.
Rustavi 2 TV, which generates largest ad revenues among Georgian television stations, has been in the forefront of opposition to the proposal, calling on the authorities to delay its enforcement and not to move to a new system immediately, which, the broadcaster said, would hit its ad revenues.
Meanwhile, considering the overall economic conditions in the country it does not seem that the new bill was the only contributor to this reduction. Recently, representatives of outdoor advertising also complained about the drop of sales.
With USD 17, 909, 502, Mondelez (Barni, Alpen Gold, Jacobs and other products) leads the list of the top ten companies with the largest ad expenditures on TV companies during the first ten months of 2015. The amounts of the top ten expenditures exceeded USD 3 million.
Mondelez is followed by Coca-Cola, which spent USD 8, 257, 974; Procter & Gamble – USD 7, 766, 026; Mobitel (Beeline) – USD 7, 678, 432; Unilever (Rexona, Sunsilk, Domestos) – USD 5, 828, 288; Magti GSM – USD 4, 208, 166; Berlin-Khemi (a pharmaceutical company) – 3, 826, 545; Schwarzkopf – USD 3, 534, 614; IDS Borjomi – USD 3, 500, 116 and Ludsakharshi Natakhtari – USD 3, 219, 087.
There was only one company that spent more than USD 10 million on TV ads during January-October 2015, out of the top ten expenditures. The number of companies was three during the same period of the prior-year. Out of top ten advertisers Coca-Cola and Mobitel (Beeline) were the only companies that increased its TV ad budget this year. The expenditure of Coca-Cola that spent more than USD 8 million during current year, has totalled USD 4, 353, 166 during January-October 2014. Mobitel, operating under brand name Beeline, increased its TV ad budget by USD 584, 133 this year, in comparison with the previous year.
The expenditure of the current year’s leader, Mondelez, has been reduced from USD 21, 187, 204 to USD 17, 909, 505 from January-October 2014. Procter and Gamble spent USD 12, 784, 184 during January-October 2014. Ludsakharshi Natakhtari has cut its current year’s budget more than twice. The expenditure of the company was USD 7, 811, 503 in 2014.
There were five companies, which unlike 2014, did not manage to enter the list of top ten expenditures this year.
With USD 12, 484, 284 one of the leading mobile operators in Georgia, Geocell was the third largest expenditure in January-October 2014. This year the company spent less than USD 3.3 million. TV ad budget reduction was also made by Technoboom, consumer electronics shop, Bank of Georgia, Kartuli Ludis Kompania Zedazeni and Henkel.
In terms of the revenues of broadcasters from TV ads, two TV stations currently account the major share of all revenues in the broadcasting sector. During January-October 2015, Rustavi 2 reported revenues of GEL 73, 576, 142, Imedi TV reported income of GEL 55, 247, 343. New Channel/Comedy gained USD 20, 969, 149. It is followed by Maestro – USD 16, 275, 383; GDS – USD 15, 026, 037; Meastro 24/TV 11 – USD 7, 662, 694; Marao – USD 5, 871, 443; Tabula TV – USD 5, 183, 767; Channel 1 – USD 1, 475, 105. Broadcasters Kavkasia, Palitra TV, Channel 2 and Music Box attracted less than USD 1 million.
Ad sales profit of TV companies in 2015, has brought reduction to mostly all TV companies operating in Georgia. There were only three exclusions. TV companies Rustavi 2 and Imedi were both leaders on advertising market in 2014. Meanwhile their profit in 2014 has shown larger scales than in 2015. Ad sales profit of Rustavi 2 was USD 89, 850, 571 during January-October 2014. It was followed by Imedi – USD 72, 287, 021; Maestro – USD 25, 886, 956; New Channel/Comedy – USD 23, 099, 231; GDS – USD 12, 948, 568; Maestro 24/ TV 11 – USD 7, 162, 068; Channel 1 – USD 3, 800, 370; TV 3 – USD 3, 642, 195; Tabula TV – USD 2, 455, 952; Music Box – USD 1, 496, 879 and Kavkasya – USD 1, 047, 555.
Tabula TV, GDS and Maestro 24/TV 11 were the only companies in 2015, that have seen increase in ad sales in comparison with the previous year. Tabula TV attracted USD 2, 727, 816 more in 2015 than in 2014. GDS has increased its ad budget by USD 2, 077, 469 during current year. As for Maestro 24/TV 11, the company received USD 7, 662, 694 in January-October2015, up from USD 7, 162, 068 from the same period of the previous year.
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