The FINANCIAL — TV companies which supported billionaire Ivanishvili’s coming to power are experiencing growth in ad sales, while former pro-governmental TV channels close their popular TV shows.
The FINANCIAL — TV companies which supported billionaire Ivanishvili’s coming to power are experiencing growth in ad sales, while former pro-governmental TV channels close their popular TV shows.
Demand for advertisements on Maestro and TV9 television channels has significantly increased since the political coalition of billionaire Ivanishvili won the Parliamentary elections on 1 October. Georgian companies which were previously avoiding cooperation with the oppositional channels in spite of their lower prices compared to the former pro-governmental Rustavi 2 and Imedi channels, are now running ads on both Maestro and TV9.
“There were about six companies which ran advertisements on Maestro,” Levan Chikvadze, Head of the Commercial Department at Maestro, told The FINANCIAL. “The number has already doubled at least for the moment. But the majority of the contracts aren’t signed yet. Demand is really very high. We expect this trend to continue in the near future as well,” he said.
Companies including Magti, Kazbegi and Bormental were the minority that used to advertise on Maestro TV, which played a big role in the victory of the oppositional coalition – Georgian Dream. Currently VTB Bank, Redix, several plumbing and other companies have already started advertising on this channel.
Oppositional TV companies including Kavkasia were claiming that the Saakashvili government was restricting the placement of ads on their channels. Print media was also discredited by the President, who recommended that people not read newspapers. This was followed by the closure of private press distribution networks in Tbilisi and in the regions of Georgia.
“The criterion for choosing the media where we put our advertisements is its ratings,” said Nino Bendeliani, Head of the PR Division at VTB Bank. “We try to have the most effective marketing and therefore choose our advertisement partners according to their popularity. Currently we have advertisements in every popular media outlet. Hence the VTB marketing team decided to start advertising on Maestro as well. This is purely as a result of media popularity and not down to the support of any government majority or minority.”
VTB Bank has been advertising on TV9 as well since the elections. Before it the TV had only social advertisements, not commercial ones. TV9 is owned by Ivanishvili, who is the leader of the winning party and PM candidate.
“This was for two reasons,” said Natalia Tkeshelashvili, advertising agent at TV9. “First was, of course, political background. On the other hand, we had problems of distribution and TV9 was trial broadcasting. Now the problems are more or less solved and we are already cooperating with Roniko, VTB Bank, Aversi, BOG and others.”
“As our distribution becomes wider, the prices of advertisements will grow. But at the moment we do not plan to have any changes in price policy,” she added.
Meanwhile lack of advertisements may bring additional financial problems to a certain two TV channels. Imedi has already announced that it has stopped all entertainment programmes because of financial problems.
Currently the most expensive TV shows for advertisements are ‘Nanuka’s Show’ on Imedi and ‘Profile’ on Rustavi 2. Advertising during these programmes costs USD 4,500 per minute. In general the prices on these two channels are very similar, but Imedi is slightly more expensive. The average price for daytime hours is USD 600-1,000. For prime time the price starts from USD 1,500 and even reaches USD 4,500 depending on different programmes. Georgian entertainment programmes and soap operas cost more than other programmes.
The price of an advertisement on Maestro is USD 300 per minute before 18:30 and USD 700 after 18:30. As for TV Kavkasia, the most expensive programmes are the talk-shows ‘Barrier’, ‘Your Choice’ and ‘Hot Line’. An advertisement during these shows costs GEL 1,020 per minute. The price is the same for the show ‘Spectrum’ and news programme ‘Today’. The starting price for other programmes is GEL 300.
The price for advertisements on Maestro is cheaper than on Rustavi 2 or Imedi. But demand dictates price and therefore the current trends may soon change.
“In general the period before New Year is the most popular one,” Chikvadze explained. “If the increased demand continues, and we suppose that it will, then prices will grow as well. This is an ordinary rule of the market.”
The sales house General Media, which is working on placing TV advertisements on Rustavi 2 and Imedi, is not expecting to reduce prices before the New Year, as this is a very active period for the business.
“Current demand for advertisements on Rustavi 2 and Imedi has not decreased significantly at all,” said Zurab Gumbadze, CEO of General Media. “We don’t predict any decrease in the next few months either. Therefore the prices aren’t likely to change soon. A change in the price policy is more likely to happen next summer.”
In general TV media has quite a big amount of viewers and therefore its influence on society is quite strong in Georgia. Due to this TV advertisements are preferable for commercial companies and have quite high prices.
Changes in Georgian TV space continued last week. After the former Minister of Defence and incumbent businessman Davit Kezerashvili confirmed that he purchased 40 percent shares of Rustavi 2 and Mze TV, it was announced that TV Sakartvelo, managed by the Ministry of Defence, has been handed to the Civic Education Foundation, represented by Tamar Chergoleishvili, the spouse of Giga Bokeria, Secretary of the National Security Council of Georgia. Later it became known that Kezerashvili sold shares to his partner. Meanwhile former owner of Rustavi 2 TV, businessmen Kibar Khalvashi said he hopes to get back his 78% share in Rustavi 2 and Mze TV which he had lost due to conflict with President Saakashvili.
Discussion about this post