Advertising market on the rise

TALLINN - The recent International Advertising Association's (IAA) survey evaluated the Estonian advertising sector as a remarkably healthy industry, which makes a significant contribution to the overall economy.

The advertising sector's turnover of 2.9 billion kroons ($222 million) exceeds two times that of the fishing industry, matches that of the forestry industry and accounts for 1 percent of the GDP.

With 1997 revenues of 585 million kroons, it is estimated that the advertising industry generated around 2.3 billion kroons of economic activity and tax revenues of 122 million kroons.

The advertising industry gives work to 3,250 people in advertising agencies and media companies and about 2,500 jobs indirectly in other companies.

Estonian advertising growth has been the highest in the world since the early 1990s. Since 1994, advertising expenditures have increased five times.

However, the Estonian advertising industry is still relatively small by international standards and has plenty of room to grow, the IAA reports. Compared to advertising expenditures per capita, it is still less than half as developed as the industry in the Czech Republic and less than one-third as developed as the advertising industry in Hungary.

Advertisement is a very important source of revenue for the press and TV, ensuring about one-third of their total revenues. Newspapers are by far the largest advertising vehicles in Estonia, accounting for 50 percent of all advertising expenditure in the country. TV is the second most important target for advertisers, accounting for 26 percent of expenditures. Radio, magazines and outdoor advertisement each get about 8 percent of all expenditures.

According to the IAA, outdoor advertising has been one of the main growth areas in the Estonian advertisement market, while the cinema sector is relatively undeveloped.

According to the Baltic Media Book, health and beauty care, food and electrical appliance companies are the largest advertisers, accounting for almost half of Estonian advertising expenditures.

A diversified consumer goods company, Procter & Gamble has been the largest Estonian advertiser in the period of 1994 - 1996, while Dirol, Stimorol and Marlboro were the most advertised brands during the same period.

Among the local top most advertised were Eesti Loto, Eesti Tubakas, and telephone companies Q-GSM, EMT and Radiolinja.