Latvian advertising sells itself at Golden Hammer 2000

RIGA - Baltic advertising standards for the mass media were on show
in Riga when countries from all over Europe came to Riga to see what
the Baltics and neighboring countries had to display in media
advertising.

The Golden Hammer 2000 festival June 15-16 was a chance for
advertising agencies to compete and compare with one another. The
festival's aim was to display and judge the best commercials
presented at the festival.

"This sort of festival would have been impossible five years ago. The
commercials being produced five years ago could not fill a two-day
festival," said Dzidra Smiltene, spokeswoman from the advertising
agency Balti, a film studio.

When Latvia gained independence in 1991, a free market economy opened
up. With a newly-formed democracy, the market economy demanded that
businesses display their wares to the consumer. Hand in hand with
this sort of progression came "the vultures" of advertising.

"We have come a long way from the early informercials and poor
quality commercials shown on Latvian television in the early 90s.
Latvia has now progressed to commercials of the highest caliber.
Commercials, such as the Aldaris commercial, are a testimony to the
level Latvian advertising has reached," said Inesa Kapostina, from
the company Creatio that organized the festival. "Golden Hammer 2000
will show the rest of Europe that the Baltic countries are capable of
making excellent commercials."

Smiltene said the changes have been very radical.

"The export market has grown incredibly in the past few years. The
development of the industry has reached a very exciting period.
Advertising is very active now. Businesses realize they need to be
presented in the media. A company even with a solid product will lose
business to a competitor without advertising," said Smiltene.

One of the world's largest advertising agencies, McCann-Erickson, has
opened up an office in Riga set up jointly with the Latvian company
Division.

"McCann-Erickson realized there was a vast, untapped market here in
Latvia. Three to five years ago, advertising was very simple. Now it
has progressed to a global level," said Aigars Rungis from Division.
"We are now basically an autonomous company capable of offering every
option to our clients."

Improvements in the industry have led to more commercials being made
in Latvia to push exports.

"Most of the advertising Division makes is for the Baltic market, but
gradually more overseas clients are looking at Latvia to make their
commercials," said Rungis.

Latvian wages are slowly rising in the industrial and textile
industries, making it economically unviable to set up businesses in
Latvia. This cannot be said for industries using technology and
information technology. Wages in these industries have not quite
reached Western standards.

"Scandinavians are already using our company to make their
commercials because we are more affordable. They can outlay less for
our production and still benefit from a quality product," said
Smiltene. "The cost per hour is cheap, compared to the rest of
Europe. The work involved is very intensive, so our people get paid
well. In comparison, however, our wages are not in the same league as
those in Germany or England,"

Kapostina agrees that Latvia has to sell itself to overseas markets.

"The festival is an opportunity for Latvian advertising companies to
show they have services to offer the rest of Europe. The cost of
making commercials here is a lot cheaper in any form of media than
most of Europe. A polygrapher does a quality job here but makes less
money than a polygrapher in London," said Kapostina.

Ainars Scipcinskis, the director of Division McCann-Erickson, said
the Latvian advertising agencies need to start exploring information
technology.

"Computers are being used more and more each day. There is a big
chance to cash in on the Net," said Scipcinskis.

Smiltene said it is only a matter of time before Latvia becomes
accustomed to the possibilities for advertising on the Internet. Soon
there will be a major market for Internet advertising, she said.

"Next year Division will be strongly concentrating on the production
of advertisements for the Internet," said Rungis. "We need to hold
our place in the market and not to follow future trends in the
industry would be plain suicide."

Fewer overseas products are being displayed in Latvian media outlets
and are being replaced with locally-produced products and
commercials. This increase has also led to the "dog eat dog" industry
of advertising becoming more and more cutthroat.

"Balti will do everything to keep our position in the market place.
We will arrange and finish the complete product, because the market
place in advertising is very tough. There are a lot of good agencies
in Riga now, and the end result is high quality. Organization,
progression and knowledge of the product are essential if you are to
survive in this industry," said Smiltene.