What is situation in Azerbaijani advertising market?

Business Materials 12 May 2019 14:51 (UTC +04:00)

Baku, Azerbaijan, May 12

By Aysham Rustamova – Trend:

The turnover of the advertising market is approximately 100 million manats in Azerbaijan, Communical company head Tural Abbasli told Trend .

“The advertising budget has greatly decreased in Azerbaijan recently,” he said. “After the devaluation in 2015, the firms reduced the advertising budget. In fact, this was a mistake and it was necessary to increase the advertising budget. While comparing 2016 and 2019 indicators, one can see that the turnover of the advertising market has shrunk by 30-40 percent."

“There is no exact information about the amount of money used in the Azerbaijani advertising market,” Abbasli said. "From the point of view of advertising, Azerbaijan greatly differs from neighboring countries. This affects the concept of advertising, its budgeting and strategy. We do not see any creative advertising. For example, advertising that affects emotions is widespread in Turkey. Our advertising focuses on the presentation of a product and its sale."

“Television and radio hold positions in the field of advertising,” he said. “The development of digital advertising can be observed in the world practice. The coverage of digital advertising is quite measurable. In this sense, social networks are effective. The advertiser can count the number of comments regarding the advertising. In Azerbaijan, television advertising ranks first, radio advertising ranks second, outdoor advertising ranks third while digital advertising is the last. However, digital advertising ranks first in the world. "

“Azerbaijan has no tools for measuring the effectiveness of advertising,” Abbasli said. “Television advertising is used depending on the ratings. Digital advertising is more interesting in this sense because the advertiser can choose the targeted category of users. The company uses advertising on television and radio but it does not see the effect due to lack of feedback. The only one visible indicator of advertising effectiveness is sales growth. "

He said that enlightenment in marketing and advertising is required in Azerbaijan.

“The companies need recognition,” Abbasli said. “The state agencies should also motivate. Today, 90 percent of the TV channels budget account for advertising funds and sponsors’ funds. The companies are unaware of the role of advertising and PR in their further development.

“The enlightenment is required for the firms not to consider the advertising budget as "additional costs",” he said. “They should regard this as an investment in their future. Earlier, there was such an opinion that a good product does not need advertising. Presently, to be considered a good product, it must be branded. To become a brand, it is necessary to create "brand interaction".”

“The advertising is one of such tools,” Abbasli said. “Consulting firms, state agencies, including the Ministry of Economy, must jointly incline entrepreneurs to that. We have excellent products under the Made in Azerbaijan brand. We have perfectly packaged and qualitative products. However, they are stale in shop-windows abroad because they are not advertised well. The country’s strength also depends on the recognition of its export-oriented goods."

He stressed that there is no regulation of prices for advertising in Azerbaijan, the market dictates the prices itself.

“When setting the price of advertising, TV channels take into account the ratings,” Abbasli said. “But there are cheap prices in this market in Azerbaijan compared to other countries. During the peak time, a second of advertising is 30-100 manats on television, while the prices are cheaper on the radio. The prices reach 6-10 manats.

“The price of digital advertising begins from $1,” he said. “Digital advertising is subject to 18 percent VAT in Azerbaijan and this hinders its development, so people open accounts in Georgian banks and pay for advertising on social networks. In Azerbaijan, 3.1 million people have been registered on social networks and it is quite obvious that digital advertising will be intensified.”

(1.7 AZN = 1 USD on May 12)