The FINANCIAL — The importance of attracting customers by advertisements is prompting Georgian companies to continue spending thousands on advertising. Some of them have started thinking about how to shorten their ad budget, or getting discounted rates. But the company which controls the sales of commercial air time of the leading TV channels doesn’t plan to offer any discounts. The only compromise is not to increase prices of ads in 2009.
“The economical crisis of course influenced our business. Banks and construction companies that were previously big clients, have radically shortened their advertising budgets, but at this time we are not able to say any concrete figures. We did not suggest any discounts, but we have not increased prices,” Tea Javakhishvili, Marketing Manager of Media House, told The FINANCIAL.
Media House is a sales house, started in 2007, which has exclusive rights on launching advertisements at TV companies: Rustavi 2, Mze, 1st Channel, Sakartvelo, and 1 Stereo. The company is under the ownership of Alexander Bitadze, Secretary General of the Georgian National Olympic Committee.
Company Kazbegi spent GEL 1,162,000 on advertisements in 2008. As the management of the company notes in 2009 they will considerably shorten their budget for advertisements. Presently the management of the company is working on determination of the budget priority for 2009.
“In spite of direct expenses of ads Kazbegi plans to work on using more different ways to stimulate sales. As the main priority in 2009 will remain TV ads. Preliminarily we’ll reduce expenses of ads by 30%,” Tea Skhiereli, PR manager of Kazbegi, mentions.
“The strategy of the company is aimed at electronic ads. Accordingly the main part of the budget focused at advertisements will be spent on TV advertisements. TV is followed by radio and less for printed version. From total expenses of ads in 2008 TV was GEL 470,000, radio – GEL 316,000 and outdoor – GEL 38,000,” Skhiereli says.
The marketing strategy of Elit Electronics, one of the leading retailers of electronics, will be focused on sales and less on advertising.
“In 2009 Elit Electronics plans to focus on more flexible prices,” Ia Nadirashvili, Marketing Manager of Elit Electronics, told The FINANCIAL.
“Our marketing step will be directly connected with stimulating sales. We already agreed this plan with our suppliers. This plan includes full restoration of our marketing campaign in two or three weeks,” Nadirashvili says.
Cinema Rustaveli, which spent USD 300,000 on TV and print media advertisement last year, does not plan to reduce these expenses in 2009. The company’s cash-inflow depends on advertising mainly, so we did not reduce our spending in TV and Print,” Devi Gvakharia, Marketing Manager of cinema Rustaveli, says.
“We plan to spend about USD 200,000 – USD 250,000 on TV advertising and almost the same in print as in 2008,” Gvakharia notes.
Nikora is one of the leading food processing companies in Georgia with estimated meat products market share of 55%. 11% of the company is owned by Liberty Consumers, associated with Bank of Georgia.
The company spent USD 300,000 on TV advertisements in 2008 and it won’t shorten expenses on ads in the future either. “Regardless of the crisis, the company should not reduce marketing costs as this direction is one of the main priorities for our company,” Mako Jaoshvili, Head of the PR department of Nikora, declares.
“Advertising activities being considered for 2009 depend on the brands joined under the holding Nikora, so they will be regulated according to the appropriate products sales data. In this case, we still choose television as the most important media segment. Radio, print and outdoor media are used less,” Jaoshvili says.
Outdoor companies were the only ones who offered 15-50% sales for their service for organizations. Companies think that TV companies should reduce their rates also.
“Against the background of the current economical crisis it will be a good step from TV companies to announce sales on TV ads. I think that all advertising companies should foresee the global situation and offer some discounts,” Skhiereli announces.
“Advertising companies are facing difficulties. That’s why they started attracting customers with discounts on services. I think that the decision made by outdoor companies to offer sales on their products to customers was really good and should be followed by others,” Nadirashvili notes.
“We think that the special discounts offered by leading advertisement agencies should promote their business, as orders on advertisements have generally reduced. It is also possible that other advertisement agencies will follow them, in order to maintain their customers,” Jaoshvili, Nikora, comments.
Internet advertising is cheaper and helps to assimilate a wide range of customers.
“Launching ads on the Internet is cheaper and more effective. Our company often uses different websites for advertising, especially in spring and summer. Short costs and easy ways of assimilating concrete segments is also a big advantage of internet ads,” Gvakharia, cinema Rustaveli declares.
“The number of internet users rises every day and accordingly the interest of advertisers is increasing. In comparison with 2007 in 2008 our activity was higher but unfortunately the developed economical situation made us postpone planned projects,” Nadirashvili, Elit Electronics, says.
The increasing number of Internet users is prompting companies to focus on creating their own websites.
“Our new website is actually in the process of construction and soon we will be able to launch it.The exact price is not clear as it will be dependent on the final format of the website, but the approximate spending might be from USD 8,000-15,000,” Gvakharia notes.
“Our advertisements are mainly of our products which are the movie titles that we release, thus we do not put out any personal messages,” Gvakharia says.
“However our main action not to lose our customers is not to increase prices. I have to say that prices for tickets are pretty low – GEL 7-10 and because of this I suppose that people can save money for more expensive entertainment and spend a lot less in our cinema,” Gvakharia says.
“Our website is rather popular amongst our customers and the number of visitors is raising on a daily basis. Nikora’s website is updated constantly with current issues done throughout the whole company, including information about product assortment and the store chain. Accordingly, each customer has the possibility to be informed in detail regarding the questions of their interest,” Jaoshvili says.
Nikora which has not launched its advertisements on the Internet thinks that in case of making such a decision the only potential prioritized website for them will be sites like Google.ge.
Written By Madona Gasanova