Interview of “Media Advocate” initiative with Karen Hambardzumyan, director of “MEDIA GROUP” advertising agency.
In general, savings in the economy first of all affect advertising and marketing costs. The economic downturn in Armenia has dealt a major blow to the advertising market, which in turn has affected the financial independence of the media. Many Armenian media outlets are in danger of suspending and reducing advertising contracts. What strategic steps do the advertising agencies (which are considered to be intermediaries between advertisers and media) take, what new marketing tactics do they develop? Where one can get money?
First of all, advertising agencies are not intermediaries, they perform very important functions in the customer-media chain, such as, strategy development, implementation of tactical steps, various studies, analyses, which help to ensure the multiple effectiveness of the advertising campaign.
Some businessmen who do not understand the importance of advertising in their business, bring a lot of subjective justifications, discrediting the advertising. Advertising is measurable, if businessmen provide some funds, they will realize how much they benefit due to advertising.
Doing business requires a solid knowledge, in which marketing tools play a key role. Therefore, there is no need to reduce advertising costs in case of the very first obstacle. By doing so, you actually reduce your business. Business is a sale, be it a product or a service. The more you sell, the larger your business becomes. And one of the selling tools is advertising. On the one hand I know businesses that have quality products, but no advertising and are currently in a state of emergency, on the other hand I know others whose product is not the best but they use advertising and therefore have good sales.
The decline of the Armenian market is primarily because of the war, but there are also international advertisers. What are the current trends in this sector?
Armenia is a part of the whole world. And the events taking place in the world reflect on the life of Armenia too. The market downturn began in March, when restrictions were imposed amid the coronavirus outbreak. This is where the role of the advertising agency comes into play. We changed the advertising strategy for our international clients, switching from one type to another, and we were able to at least maintain sales. Then the war began: the unbearable thing for all of us. Children are also consumers of advertisements; involving children in the problems of adults, to put it mildly, is not right so we continued broadcasting some advertisements.
The broadcast of advertisements that were very joyful, (those joyful advertisements were really good and popular in the non-war period), were temporarily stopped during the war in agreement with the customers. Corresponding advertisements were created for that period of time.
Why ads were not completely removed? Because despite the fact that those days were days of mourning, the front line needed a country with a strong economy. So, all the sectors should work, including the media, in order to be able to provide information on time.
Is the government trying to mitigate these blows, is it trying to cooperate with the representatives of the advertising market?
There have been several advertising programs to raise awareness of coronavirus prevention, but in this situation, some advertising companies even without a state order have worked together to develop programs in order to instill hope and faith for tomorrow.
The TV advertising suffered the most. The advertisements circulating on the air are old, no new money is generated. Have the TV companies reviewed the advertising prices and, in general, are there any customers who are interested in advertising in these conditions?
All directions were affected. Some were even closed. Televisions and radio companies have not changed their prices, but they have made many concessions, additional bonuses and discounts have been given too. The losses in outdoor advertising were very significant, as the population was isolated in their homes. Another reason is that the lion’s share in the pricing of outdoor advertising has a state duty, it is fixed. The agencies applied to the relevant bodies with a request to temporarily reconsider the duties, but… The internet industry has been active, but here the prices are such that there are so many advertisers on one page that sometimes between the banners you can hardly read the article, you close one advertisement, the other one appears, and finally you get nervous and turn it off. Though leaving the site felt, but with a different indicator, the visit is important. This is a big problem for websites, because even without Coronavirus and the war, they start losing audiences. There is a legislative omission here as well.
As you know, the National Assembly adopted the government’s proposal to amend the Laws “On Television and Radio” and “On Advertising”, which provided the Public Television for the right to broadcast commercial advertisements. The TV companies have already applied to the TRC (Television and Radio Commission) license competition, the results of which will be clear on January 15. In fact, some TV stations will be closed. ArmTV will continue to be privileged. What will this imbalance lead to and how will it affect the advertising market?
The advertisement is placed according to the target audience, where according to the measurements the audience of the given product or service is gathered.
Be it X TV or Y TV, in some cases it is not that important. Rating is what really matters.
Losing money is bad, but losing a trusted partner is worse. What mechanisms and principles are used by advertising companies to survive in these conditions, in order not to lose advertising platforms and advertisers?
One of the most important missions of an advertising agency is to find alternative tactical solutions in any situation. This is why the advertising agency is valued; in this case, if the agency pursues the right strategy, there is no risk of losing a partner at all, on the contrary, in this situation new clients are likely to join the company, those who will realize the importance of advertising, as well as those whose agency is not flexible in the conditions of internal and external signals.