The FINANCIAL — “We have weathered the crisis in 2009,” Levan Kalmakhelidze, the new Director of Vellagio, one of the leading Georgian advertising companies, said in an interview with The FINANCIAL. “We expect demand to pick up steadily in 2010. We started to observe the first symptoms of changing market sentiment in a right direction from September/October 2009. We predict reaching 2007 levels somewhere at the end of 2011,” he says.
Kalmakhelidze says his company will involve more consultancies and advising services in 2010.
“So our valuable clients can gain maximum benefit from advertising expenditures,” he says.
“In parallel with ordinary means, we will try to offer our customers customized solutions in terms of space shape and design for posting postcards.”
“We will be developing innovative products that will need customers demand. Innovation will come in the way we do business and serve our customers.”
Levan Kalmakhelidze, 30, took the post of Vellagio Director on December 1, 2009.
“I’m a lawyer by education. Since 2007 I was part of Wissol Group, I worked at Wissol as a lawyer, then I became Head of the Legal Department at Vellagio Advertising.”
“The main challenges that lie ahead are: to stay competitive; to stay innovative; to continue to deliver high quality products and services,” he says.
Q. What influence did the crisis have and how has the habit of advertisers changed? Did they change their budgets for any particular segments?
A. Companies have cut their marketing budgets, in some cases significantly. But there were also cases when companies fully cut their advertising budgets as they wanted to stay afloat. Meanwhile, only a couple of companies have declined our offers altogether – almost all company managers and marketing specialists are aware that advertising is a necessary part of their business, and this is true in both the bad and the good times. It’s so important to offer quality services and products; but it’s more important to raise awareness of your products and services, so potential customers can familiarise themselves with them.
Q. You have an exclusive on Tbilisi and Batumi Airports, what influence did the crisis have on airport advertising and has the number of advertisements decreased in general?
A. As advertising budgets have decreased across companies, demand for advertising spaces at airports have also decreased. Meanwhile advertising areas at airports are the most expensive advertising areas in indoor and outdoor advertisement. So we have managed to retain not all but at least some of our premium customers.
Q. Are there any places where advertising yields to immediate attention and success?
A. Yes certainly. There are some prime locations where success is guaranteed, especially if posters are attractive and are easily readable with concrete messages.
Q. Which place would you name the most expensive to advertise in Tbilisi? Do prices vary across airports and outdoor advertisements? Which is more expensive?
A. Advertising at airports is the more expensive means of outdoor and indoor advertisement across the world, as it brings more awareness of brands and the activities of companies.
In our product range advertising at airports is the most demanded product. Out of outdoor advertisements, spaces located on main avenues of the city are probably the most expensive.
Q. Have the prices of advertising changed in 2009 compared to 2008?
A. During the first 8 months of 2009 advertising spaces (for billboards) have been far lower compared with the levels of 2008. Then they started to gradually pick up.
Q. What are the results that advertisers generally expect? Are their expectations always met?
A. The companies who advertise always have their own expectations from the amount spent on the advertisement and so we advise them carefully to make sure that their expectations are met.
Q. Will your company expand its business to other cities?
A. We intend to expand our business, but each decision will be based on expected returns. Moreover, this will depend on the overall economic situation and subsequently growth of the advertising market in Georgia.
We will add some new spaces, but we will mostly concentrate our attention on offering new advertising solutions to our valuable clients.
Q. In your opinion, would advertising through the internet be considered the best medium? And how effective is it becoming to advertise through the internet in Georgia?
A. It will take time before internet advertising plays a significant role on the advertising market. However internet penetration in our daily lives is growing very quickly.
Q. You have actively invested money in the help and development of Sports, which projects are you undertaking at the moment and which projects have been completed at this stage?
A. In 2009 we finished the construction of 4 major sport centres. I will dare to say that it’s very rare to find such high quality sports infrastructure in Georgia. To start with we have developed the most modern architecture – the bike track (velodrome) which was designed and developed by Dutch architects and engineers. There was no velodrome in Georgia for many years, until now. We have also developed a couple of rugby stadiums and the fully refurbished well-known Avaza – football training centre with 3 football pitches. We have also developed modern trainings centres for wrestling and judo. All the sports infrastructure that we own have administrative offices, are equipped with heating systems and have all necessity amenities. Being part of Wissol Group, we are proud that we own the legendary rugby club – “Wissol-Kochebi” and have our own football team “Wissol-Avaza” which now plays in the second league.
Vellagio Ltd is a member of Wissol Group and is among the first three main players in the market of advertising in Georgia. The total turnover of the company in 2009 was 7,100,000 GEL. Vellagio offers a city billboard in different parts of Georgia, in the major cities: Tbilisi, Batumi, Poti, Sighnaghi, Rustavi and Marneuli. Moreover, it offers advertising spaces at both international airports and non-standard ad spaces in Tbilisi as well as at Wissol’s petrol stations nationwide.
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