Albanian Gap by yurtgc548

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									ALBANIAN GAP
10th SEMPL CONFERENCE PRESENTATION
November 2007, Portorož, Slovenia
                                CONTENT




   Status & Future Trends
   The Media Market
   Creatives & Creativity
   Integrated Agencies
   Media Agencies
   Media & Market Research
   New Business Developments
   Conclusions
                                                                              AD AGENCIES in ALBANIA



Early & Mid-1990s
The very first Albanian advertising agencies have sprung up in the mid 1990s. In fact, most of them started as small sole
propietary shops, owned & operated for the most part by practitioners with virtually no advertising experience at all or
any marketing-related education or insights.

With most of them starting originally as graphic design studios, soon they discovered a brokerage role of media space, by
buying pages in newspapers, periodicals and television and selling them to advertisers.

The first ad shops were rarely staffed by more than a couple of people and their motivation was not to help companies
attract customers or sell more goods, but to maximize profit on their own transactions.
                                                                               AD AGENCIES in ALBANIA

Late-1990s
Still, the market was dominated by the small ‘boutiques’ focusing mainly on the creative product, rather than managing
long-term accounts or continuous integrated campaigns. Some of the incumbents, however, were contracted mostly on ad-
hoc basis, by regional or other international full-service shops catering to local needs of major advertisers, typically in
offering assistance of media placement and simple media-buying execution.

This is also the time when the first media agencies specializing in planning & buying came along, albeit in lack of
continuous media measurement data or any ratings service at all. Additionally, there was not (and, still there is not) any
serious or systematic move in joining their purchasing power, for being able to command lower rates from TV networks
or press publishers and pass the savings on to the clients.

After all, till early 2000s, independently-conducted reports (HRW, 2003) found that government & state advertising
accounted for accounted for a disproportionately large share of total media advertising in Albania.
                                                                                AD AGENCIES in ALBANIA

Early 2000s
Beginning of 2000 saw growing competition and new specialized group of agencies offering the classic range of services,
graphic design, sales promotion, PR and to a lesser extent, direct marketing. With the increased range of media and
communication disciplines available to advertisers in Albania, a clear trend guided by the concept of integrated
communications encouraged attempts towards developing advertising groups aiming to provide integrated marketing
services.

2007 and on
Today, the market is getting increasingly bigger & certainly, more professional from a tripartite perspective, that of the
advertisers, the media, and of course the ad agencies themselves.
The growth in usage and importance of other types of communications, more recently internet and other digital media,
appears to demand a different set of skills both creatively and analytically.
Additionally, new players are coming to town, such as, Ogilvy Kosovo & Albania, an affiliate of Imelda Ogilvy, New
Moment, as part of a wider Balkan group, McCann?
                                                                                                     ECONOMY & AD MARKET

                                     Nominal GDP (€ Billion)
             Croatia                                                                   30.8   Economy Indicators.
              Serbia                                                        21.11                  Nominal GDP per Capita still low compared
Bosnia & Herzegovina                           7.36                                                to Slovenia, or Croatia, however comparable to
             Albania                          6.96                                                 Serbia, BiH, Macedonia, Montenegro &
           Macedonia                   4.56
                                                                                                   Kosovo.
              Kosovo           2.5

         Montenegro          1.68
                                                                                              Ad Market
                                     Nominal GDP per Capita (€)                                   Estimations based on non-publicly available
             Croatia                                                                  6,939
                                                                                                  figures & internal ad agencies reports believe
              Serbia                                             2,837
                                                                                                  to the total ad market for the first half of 2007
Bosnia & Herzegovina                                 1,940
                                                                                                  to be around 23-25m Euros.
             Albania                                    2,184

           Macedonia
                                                                                                  A significant increase compared to 2005’s 6m
                                                         2,280
                                                                                                  Euros.
              Kosovo                      1,316

         Montenegro                                          2,518


                       Source: “SME Policy Index, 2007,”OECD Competitive Index 2007
                                                                                                             MEDIA LANDSCAPE


          At the time of writing this presentation (Nov 07) Albania’s reported number of media outlets totals more than 260
          (outdoors not included).

                    Few of them, especially print, have a strong reach of a significant audience, with the biggest-selling daily having an
                     estimated circulation of less than 20,000 in a country of a little bit more than 3 million. Still the number of dailies
                     continues to increase.
                    Accurate, continuous and comprehensive data, especially concerning the circulation of print media is still lacking.
                    TV broadcasting has changed significantly by a dramatic increase of the number of channels offered and new business
                     models, such as: free-over-the-air, DTH, cable, satellite, and recently Mobile & HDTV.
                    The business of outdoor advertising is managed by three-four major domestic companies with a network of billboards
                     concentrated mainly in Tirana and other central urban areas, and more scarcely in border-crossing points, airports and
                     highways. A rough estimate of outdoor ad space levels it to 650-700 billboard postings throughout Albania, with an ad area
                     not more than 13,000m².




Source: Albanian Media Institute, October, 2007 | Albanian Media Monitoring Center, 2006.
                                                                                                    MEDIA LANDSCAPE


                                                                                 Local                     46
 Local                                              ?                           National                   3
 National                                          27                           International            5



 Local                                              ?                             Local                      67
 National                                          3                              National                   3
                                                                                   International          2
                                                    12,                            Satellite                  1
and growing
                                                                                                                    47

                                                                                                                    1

                             Source: Albanian Media Institute, October, 2007.                                       1
              Source: National Council on Radio & Television, October, 2007.
                                                                  MEDIA LANDSCAPE




               Source: Albanian Media Institute, October, 2007.
Source: National Council on Radio & Television, October, 2007.
                                                                                               MEDIA LANDSCAPE


   Come early 200s, the trend in terms of ad revenues seemed to be reversing, with ad spends originating from privately-
    owned companies surpassing substantially state & gov. advertising. This is mostly due to increased competition among
    FCMG & retail brands, as well as heavy marketing expenditures by newly-established banking organizations & mobile
    telecommunication operators.

   The launch of new television channels, as well as new broadcasting platforms, including DTH, satellite & proliferation of
    regional/local cable TV services.

   Also, an increase in the number of print press & other periodic publications, though circulation figures remaining very
    low (i.e., the biggest selling daily reports 20,000 to 22,000 copies sold daily).

   This is the time, when most of major media groups establish their web-pages, and actively pursue audience interaction &
    engagement through on-line forums, surveys, prize competitions, etc.
                                                                                                                  AD MEDIA SPEND
Advertising Expenditure Intelligence Reporting
Top 50 Ad Spenders, January-June 2007 [8 TV Networks monitored]


   Brand Category                                                               Total (EUR)            (%)
                                                                                                               Ad Spend.
   1     Cosmetics & Detergents                                                 3,538,027.90          20.16%

   2     Food Processing & Distribution                                         2,957,231.63          16.85%        Analysis of Top 50 major ad
                                                                                                                    spenders by category, provides
   3     Telecommunications                                                     2,627,663.51          14.97%
                                                                                                                    for an estimation of at least
   4     Media                                                                  1,893,913.73          10.79%        23-25 million Euros spent on
                                                                                                                    print, electronic & outdoors for
   5     Government & Institutions                                              1,584,803.80          9.03%
                                                                                                                    the first half of 2007.
   6     Finance & Banking                                                      1,561,103.24          8.89%

   7     Automotive                                                              883,560.94           5.03%
                                                                                                                    Hence, the market is
                                                                                                                    significantly growing as
   8     NA                                                                      865,245.25           4.93%         compared to 1 or 2 years
                                                                                                                    earlier.
   9     Marketing & Distribution                                                841,057.58           4.79%

   10 Refreshment Drinks                                                         801,425.40           4.57%

                                                                  Grand Total         17,554,032.97

Source: MCM Monitoring/Delta Publicity & R&T Advertising
                                                                                  AD AGENCIES in ALBANIA


   Mostly, small groups dedicated to creativity and graphic/video design work

   There is an ever-growing need to establish trade associations, which can provide for both professional advancement, as
    well as for adopting common ethical guidelines & widely-accepted best practices.

   Account planning & media services underdeveloped, with some few exceptions of domestic affiliates for major
    international ad shops.

   Very slow regarding the adoption of a continuous media measurement system or ratings.

   Lack of use of any consumer insight, brand valuation or media research tools, and to our best knowledge, no proprietary
    tools developed so far by any of the agencies in town.
                                                                                      AD & MARKET RESEARCH


   Most of major advertisers and media are at the very best slow, or have so far not subscribed to continuous measurement
    of media, or any rating services, even though, the data is already in place over the last one year from Strategic Puls-ISO.

   Additionally, consumer insight & other brand measurement tools are yet to be adopted by the market, and evidently in-
    house proprietary tools are underdeveloped, or simply, do not exist.

   However, new tools are being promoted in town, such as TGI Survey Data, conducted by Mediana Slovenia and will offer
    4,000 interviews/year in two waves), as well as Brand Puls, developed by Strategic Puls.

   Finally, it is still very difficult to get hold of reliable data on whatever figures of market development, market share,
    industry indexes, media audience, since most of the interested parties are not yet subscribing or commissioning any
    research projects. However, there’s clear indication that the landscape is changing.
                                                                                AD AGENCIES in ALBANIA


Most of domestic major advertisers tend to rely on their in-house marketing expertise – usually, poorly or sporadically-
managed, – rather than endorsing ad agencies with full responsibility for coordinating their integrated campaigns. This
puts considerable stress on local ad agecies’ behaviors and structures.

On the other side, most of international major advertising brands, the likes of P&G, Unilever, Henkel, Vodafone, etc.,
have already opted to rely on lead agencies, domestic or international, to control the process, although from a viewpoing
of strategic planning, most of the work may well be done in-house.

The trend is unquestionably toward some shifts in the re-organization of ad agencies and of course, re-thinking their
approach towards the so far complicated client-agency relationships, by re-integrating media and creative skills.
As a result, most of domestic ad agencies are currently trying to re-built their organizations around the core skills of
account management, creative, strategic planning and research, and media planning.
                                                                          AD MEDIA LANDSCAPE



 Major concentration in Tirana & western coastal region, and differences across the rest of the regions.
 However the ad market is significantly growing as more international advertisers have already started to
  invest heavily on marketing.
 Stronger & more professional competition for the advertising dollar.



 Media ownership falling into few hands
 International interest in acquiring ownership shares
 New technology, including web, forums, videocasting, podcasting, etc.
                                  MEDIA GROUPS




 Electronic & Print
 DTH, Mobile & HD



 Electronic, Print, DTH & Sat



    Print & Electronic



    Print, Publishing & Elect.



 Electronic & Print
DIGITAL TRENDS
DTH PLATFORM
                                                                                                     TELECOMMUNICATIONS

                    Tel/Mobile/PC/Internet Penetration, 2006                              Penetration Indicators!
                                                                                               Considerably low if compared to neighboring
      Mobile                                                                       61.3        countries, with exception of mobile phones..
     Landline                  9                                                          New Developments
                                                                                               The government has just ratified the
PC Ownership             4.5
                                                                                               acquisition of Albania’s sole public
     Internet      1.5
                                                                                               telecommunications provider to a Turkish-
                                                                                               based group, Calik Enerji. It is expected that
                                                                                               the penetration of landline telehpony will
                         Market Share for Mobile Companies
                         (Number of Subscribers)                                               increase considerably at the beginning of next
                                                                                               year, as well the launch of a new mobile
        AMC                                                                51.85
                                                                                               provider & expansion of ASDL lines will
                                                                                               trigger further developments of new
     Vodafone                             48.15                                                technology.



           Source: “Albanian Telecommunications Regulatory Entity,” 2007
AND YET…!
                                                                                                                        MOBILE TV


            At the beginning…it was Top Channel
            Following a successful introduction to the national audience of Top Albania Radio’s new format in the late 1990s, Top
            Channel was originally launched on December 20, 2001. Today Top Channel broadcasts nationwide on terrestrial, as well
            as internationally on satellite platforms.

            Digitalb begins airing its DTH services on July 15, 2004, with 38 channels on the terrestrial platform and 33 on satellite,
            plus 3 radio stations. 17 of the channels managed & administered by in-house programming personnel, involving
            syndicated dubbed/translated international thematic programming targeting all audience segments.

            As of December 20, 2006, Digitalb launches Digitalb Mobile TV through DVB-H technology

            HDTV to be launched on Digitalb’s satellite broadcasting platform on December 2008!




Source: Digitalb’s official website, digitalb.al,; Retrieved on Nov. 27, 2007.
                                                                                                          MOBILE TV


Interactive Advertising? Well, yet very few advertisers, with the exception of major banking & telecommunications use it,
and mostly in forms of banner-placement ads on some established Albanian on-line portals & media web-pages, most
notably:

  www.balkanweb.com, www.top-channel.tv, etc

Consumer & audience interaction with new technology and digital media still remains largely unexplored neither by the
agencies, nor by market research companies.

Interactive Work of Ad Agencies!
Initial steps in
  •Web content, and • Web advertising

Opportunities to be explored:
 • Web/Interactive Media Buying, & • Search, or Direct Marketing
                                                   MOBILE TV


Still low internet penetration…
Expected to change after the entrance of new
operators and providers earlier next year.

However, some major media groups have already
started to explore multimedia platforms, and
on-line advertising.

There will be a need for ad agencies to start
exploring on-line advertising possibilities, and
developing proper organizational structures
and skills.
                                                                                                           MOBILE TV


Could be both?!

On one hand the lowest ever landline telephony penetration, PC ownership & Internet usage…while we do have Mobile
TV, and soon HDTV!

Hence, the market is still unregulated, both in terms of financial sourcing for major media players, as well as lack of
experience and almost no expertise at all on the part of marketing & media services departments in order to promote
viable solutions.

However, new major media & account planning groups & adoption of research techniques & data, will certainly help
change the landscape.
THANK YOU
FOR YOUR ATTENTION!



Adlej Pici
Executive Director, ISO
insop@icc-al.org


Thanas Goga
Head of Analysis & Research/Partner, R&T Advertising
Thanas.goga@rt-advertising.biz

								
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