Budgets for TV Ads Increased by 20% in 2016  

Budgets for TV Ads Increased by 20% in 2016  

The FINANCIAL -- The total profit of Georgian TV companies increased by USD 15, 053, 430, or 20%, during the first four months of 2016 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's official licensee. With USD 4,8 million Mondelez leads the list of the top ten companies with the largest ad expenditures in 2015. 

TV’s profit amounted to USD 76,264,030 in January-April 2016, up from USD 61,210,600 in the same period of 2015. The figures are counted according to official price lists and do not take into consideration any discounts between TV companies and advertisers.

With USD 4,827,489, 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 four months of 2016. The amounts of the top ten expenditures exceeded USD 1 million.

Mondelez  is followed by Procter & Gamble, which spent USD 3, 999, 700; Bank of Georgia – USD 3, 074, 484; Georgian Beer Company - Zedazeni – 2, 767, 667; Berlin-Chemie (a pharmaceutical company) – USD 2, 204, 924; Mobitel (Beeline) – USD 2, 080, 937; Nestle – USD 1, 962, 282; PSP – USD 1, 920, 214; Ludsakharshi Natakhtari - USD 1,761, 991; and Coca-Cola – USD 1, 704, 203.  

Out of top ten advertisers, there were only three companies – Berlin-Chemie,PSP and Ludsakharshi Natakhtari, that increased their budget in 2016, in comparison with 2015. The rest has shown budget reduction. Berlin-Chemie spent USD 1, 772, 096 in January-April 2015; PSP – USD 1, 200, 529 and Ludsakharshi Natakhtari – USD 1, 278, 585. 

 The expenditure of the current year’s leader, Mondelez, has been decreased from USD 6, 185, 635 to USD 5, 076, 798 from January-April 2015. Mobitel, operating under brand name Beeline, spent USD 2, 080, 937 during the first four months of 2016, down from USD 2, 771, 515 from the previous year. Last year’s expenditure of Procter & Gamble was USD 1, 158, 907; Coca-Cola – USD 1, 916, 321 as of January-April 2015. 

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-April 2016, Rustavi 2 reported revenues of USD 37, 502, 459, up from USD 22, 792, 100 from January-April 2015. Imedi TV reported income of USD 15,656, 379, down from USD 17, 338, 846. New Channel/Comedi gained USD 7, 827, 828 this year, up from USD 5, 059, 403 from 2015. It is followed by GDS, amounting USD 5, 092, 747 up from USD 4, 218, 695. Maestro gained USD 4, 569, 952 down from USD 5, 960, 109. The profit of TV Pirveli has amounted to USD 1, 943, 605. The income of Marao stood at USD 1, 563, 615, up from USD 1, 463, 257. The increase has been shown at Tabula TV, this year the Company attracted ad sales worth USD 1, 106, 389, up from USD 753, 533 from January-April 2015. Chanel One gained USD 298, 508 up from USD 290, 973; Channel 2 – USD 66, 717 up from USD 4, 000; Kavkasia – USD 261, 243, up from USD – 123, 910; Music Box – USD 84, 586, down from USD 242, 703; Maestro 24/TV 11 – USD 290, 002 down from USD 2, 722, 620.  

The whole 2015 has been characterized with dramatic drop of TV ad sales. New regulations over TV advertisements and overall economic reduction have been contributing to it. 

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 seemed that the new bill was the only contributor to this reduction. Representatives of outdoor advertising also complained about the drop of sales.

 

 

 

 

 

 

 

Author: Madona Gasanova

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