The results of the surveys performed in Russia by such companies as TNS Gallup AdFact, ESPAR-Analytic and RosYuvelirExpert (monitoring of outdoor advertising, national TV channels, radio stations, national and industry publications on the results of the third quarter of 2008 compared with one year ago) give grounds to anticipate a change in the attitude of advertisers towards advertising in crisis environment, says the report of Russian information agency RosYuvelirExpert published in the Yuveliranya Rossiya weekly.
According to the agency, the break-up proportion of advertising vehicles (TV, radio and outdoor) is sharply changing among various categories of advertisers. The biggest market players, conquering new fields of business from their competitors are laying a greater emphasis on TV advertising. Printed media advertising slumped approximately by 40% compared with the previous quarter. TV advertising sales grew 20%. The three leaders in expenses for PR and advertising remained unchanged, the only difference being that Procter & Gamble went up from the third to the first line in the advertising rating. It is followed by cosmetic company LOreal. Jewelry company Mercury is the third, showing to its market counterparts how to make money on one’s own image. The group is also joined by Kristall of Smolensk, Krastsvetmet of Krasnoyarsk, the Mint of Saint Petersburg, Choron Diamond, Nika and Aleksandrit of Moscow; such dealers as Megran, Zoloto Brazilii and Anelli; and silversmiths Markazit, Samorodok and ELLE. It well may be that these companies initiated a spike in demand for jewelry, which according to respondents, shot up 70% in some provinces compared to the last autumn.
In outdoor advertising, the crisis has brought back the conventional preference to the “Bread and circuses!” attitude with brewers taking the lead in the outdoor events. For the first time in eighteen months the second position was taken by a movie-maker - United International Pictures. There have been no changes in commodity categories advertised on TV and in the press. Mobile phone services are leading in television advertising. Jewelry, like transport, is setting the pace in the press. How drastic the crisis crunch will be on advertising budgets will be clear in the fourth quarter 2008 or even in the first quarter 2009 from the Gallup AdFact survey. However, it will primarily hit small players leaving the market leaders less affected.
“The crisis is an international threat of a global nature and this is why it surely affects the work of our colleagues,” says Olga Mironova, General Manager of RosYuvelirExpert. “As we see, the advertising quality, printing runs and scope are going down actually in all industry magazines. The paper they are using now is thinner. The majority of advertising editions have their ads halved. Mailing turned spotty and more aimed at advertisers themselves. For the first time we see foreign magazines studiously trying to find their way to the Russian market. One typical example is VIORO, an Italian magazine massively advertising Italian products, which is now distributed among trade companies in Moscow and Saint Petersburg. We are aware of similar moves taken by Turkish jewelers. The crisis for them is a good time to win back their past well-being in Russia…” At the same time, as Olga Mironova believes, the crisis, along with all the fears it brings about, also gives some advantage and an opportunity to take some slice of the pie from allied products competing on the market.
According to RosYuvelirExpert’s estimates, the credit crisis and economic slowdown will result in crimpled advertising and exhibition budgets of jewelry companies. Taking this into account, the Organizing Committee of the Jewelry Russia Program refused to make Russian national sections at foreign exhibitions in 2009. The same pessimistic outlooks are given by analysts from Prima Media and Russian Media predicting a 10-percent drop in spending by advertisers in 2009. This is true about a decrease in the annual growth of expenses to promote goods and services and not about some actual decrease in advertising budgets.
In the opinion of RosYuvelirExpert, no one should expect any glaring manifestations of recession on the jewelry market in the field of PR and advertising. On the contrary, many strong trademarks are turning to be notably aggressive in winning new positions. One such instance is the recent PR-show of the Aesthet Company, which launched a flamboyant pageant at the Moscow Manege in team with Nikas Safronov. Home-based companies should also pay more attention to advertising due to the insistency on the part of foreign competitive jewelers. Italian and Chinese jewelers are especially conspicuous in this respect strenuously trying to increase the number of their jewelry collections supplied to Russia despite the high customs duties.
At the same time, the thriftier attitude of Russian jewelry companies to spending on advertising has become evident already now. According to the analysis provided by RosYuvelirExpert, those companies which are taking part in exhibitions have curtailed their allocations for exclusive stands almost by 45%. There is a drastic re-distribution of advertising preferences going on when companies choose specialized magazines, whose declared circulation is reasonably doubted. There is also a newly noticed trend when banks, while evaluating the consistency of financial plans of a company, are trying to evaluate the exploitability of exhibition operators chosen by the company to promote its commodities on the market. In the opinion of Russian experts, only Internet advertising budgets will be spared in the crisis period.
Foreign sources also point to the growing role played by the Internet in commerce. Thus, the report posted on www.idexonline.com says that according to the fall 2008 Ad-ology Media Influence on Consumer Choice survey, manufacturer and store websites have a significant influence on jewelry and watch purchases. Nearly half of respondents say manufacturer sites have some or significant influence on their jewelry or watch purchase, and 43.4 percent say the same about jeweler or retailer websites. Consumers also cited online video as an influence in their recent purchases, the majority of which are younger male watch buyers.
“Online video is fast becoming an increasingly popular advertising vehicle, especially for marketers of style products,” said C. Lee Smith, president and CEO of Ad-ology Research. “Many videos found online for watches resemble mini-movies more than commercials. Our study finds that for one in five male jewelry/watch buyers 18 to 24, online video does more than entertain, it impacts what they buy or where they buy it.” Although the survey revealed that 50.9 percent of U.S. adults 25-34 say they bought jewelry or a watch recently, nearly 84 percent of consumers said they prefer to buy jewelry/watches in a store as opposed to online. When it comes to shopping, the store experience is important: 63.5 percent rate store reputation and 65.9 percent rate the sales staff as important factors in their purchases.
In addition, 47.9 percent of recent jewelry/watch purchasers were influenced by information or advertising from newspapers. Magazines, television and direct mail were also among the most influential traditional media. Further, more than 20 percent of respondents consider cause and/or charity support by a manufacturer or store to be somewhat or very important. That number goes up to 25 percent for African-American consumers. “The results highlight the need for local jewelry and watch retailers to have a strong website that showcases their products visually, provides product availability information and reviews or comments from previous customers,” Smith added. “Pre-roll video advertising on other websites may also be an effective option for jewelry/watch marketers.” The Media Influence on Consumer Choice survey is conducted quarterly by Ad-ology Research to study on- and off-line media influence on buying decisions. The survey asks a national consumer panel about key factors in their buying decisions.
