Our blog series continues with a contirbution from our partner and friend Sergei Trofimenko, CEO of Point Passat, GlobalCom Partner in Russia.
Some interesting facts about the past years as well as a prediction for 2015.
Unfortunately in 2014 many adverse factors that have a negative impact on the Russian communications market coincided. The General economic recession has come to our country. The falling oil prices and sanctions of Western Europe led to the decline of the advertising market. I am sure that in 2015 this trend will reach the public relations and marketing communications field. Point Passat communication group has already begun to have repercussions. Some events planned by our clients at the end of the year were cancelled just last week and advertising and marketing budgets have started to reduce significantly. To be substantive I will provide a few figures from the annual ACAR (Association of Communication Agencies of Russia) report.
According to this reputable organization Russia’s advertising market grew approximately by 5 percent and reached 242 000 000 000 rubles (US$ 5 222 506 846). It is the worst index within recent years. Over the same period of 2013 the market grew by 11 %, in 2012 by 14%. In early October at the World of Advertising Summit in Moscow the ACAR President Alexey Kovalev announced a “real crisis and recession” in communications.
However, despite such pessimistic forecasts a number of key industry events took place in 2014. Fifteen years has passed since The Russian Communication Consultancy Association (AKOS) was created. It includes more than thirty largest agencies in the country. The celebration showed that despite the difficult conditions agencies have plenty of shot in the locker so they adapt and continue to develop their business in Russia. The Russian Academy of public relations was created. It includes the most distinguished members of the profession. Also several major industry events were conducted. The Baltic PR Weekend was the most prominent one. It is traditionally held in St. Petersburg and PR experts from all over the country gather at this event.
Speaking specifically about the GlobalCon PR and Point Passat company partnership, we are trying to take a fresh look at our portfolio of customers in the current difficult economic conditions. In addition to active negotiations with the Japanese manufacturers we also began to negotiate with Chinese ones. We think that in the long term the commodity market from South East Asia will grow stronger and because of all the recent world events foreign policy of the Russian Federation will be also reoriented to the East.
In August at this year’s Moscow International Automobile Salon I paid attention to the fact that the largest areas on the exhibition were occupied by Chinese car manufacturers. Apparently the day when the Chinese car industry will overwhelm Russian market as it was formerly the case with the Korean cars is not in a long future. In this context our priority is the establishment of business relations with representatives of the Chinese automotive industry. Point Passat’s portfolio always had a lot of car brands but mostly European car brands. The current situation makes us to have a more focused look to the East.
In recent years the big budgets have focused on the state’s programs. And we actively participated in these programs. For example we participated in the blood donation promotion program. But considering what I wrote in the introduction, this monetary river in the near future will shrink as the state has less money and so I think that many of the state PR programs are going to be cut down. And in those programs that will remain the priority will be given to the agencies that are not affiliated with American and Western European partners. If so, we will have a
definite advantage as we are 100% a Russian Agency.
I would like to finish with the words of President Kennedy who said: “The Word ‘crisis’ written in Chinese consists of two characters: one meaning ‘danger’, the other ‘opportunity’”.
We can mention three main trends in communication industry resulting 2014 year:
1. More tenders from government ministries and state owned companies
2. Trend from the government to work with the PR companies without foreign owners
3. Reduced budgets of multinationals and private companies
CEO, Partner of Point Passat communication group
Vice President of the Russian Academy of Public Relations