#6570 #6571
#6 - JRL 6569
Date: Sun, 24 Nov 2002
From: "Darlene L. Reddaway" <darlen@compuserve.com>
Subject: re: journalism query and answer in JRL 6530/6531
Sender: "Darlene L. Reddaway" <darlen@compuserve.com>
Re: Journalism Query in 6530 and answer in 6531
Martine Self asked in JRL 6530 why there was so little advertising in Russian newspapers. Fred Harrison gave the simple answer in JRL 6531 that "Most advertising is disguised as news content," fueled by greedy journalists and editors who get paid cash to write news stories about various products.
This simple answer has ignored some of the realities of the Russian advertising world. After having spoken with Russian ad specialists who work in advertising placement departments of mass media organs and with those who place ads for clients via these advertising departments, I would like to add the following facts to fill out the answer to this question.
First of all, it is not strictly true that Russian newspapers are lean on open advertising due to the greed of journalists and editors. There reasons for lack of ads in certain papers that are based in both federal law and the profile of the individual publication.
Russian law restricts advertising content in newspapers and publications that do not have an expressly stated advertising purpose to not more than 40%. For television, the law requires that ad blocks within programs can appear after an interval of no less than 15 minutes, and the total add content of all ad blocks should not exceed 10% of the length of the program. This would mean, for instance, that for a 30 minute program, only two ad blocks of 1-1/2 minutes each would be allowed by law. However, it seems that the last law is violated often enough, and no one seems to be inflicting fines.
You can view these laws by going to www.yandex.ru and searching for advertising law. They are both in English and Russian. You can also find the laws regarding mess media conduct in this same way.
Russian law also requires that ads be paid for out of profits. Well, if you have not yet made a profit, then you have no legal funds to place an open and legal advertisement, which creates a catch 22. Because to make profits, you need to advertise; in order to advertise, you need to already have a profit.
According to one source in mass media advertising, this particular law in itself spawns a whole shadow ad market. Those with no real profit often funnel pre-profit funds through manufacturing or other concerns, which funds are returned to the original company under some other guise in cash, which they then use to place an ad through an ad company that exists for only a month -- and leaves no traces.
Beyond governmental restrictions, the number of ads in a Russian newspaper depends on the Russian newspaper and its profile.
It is true that "hidden ads" (skrytye reklamy), that is, ads disguised as news content, are a large part of advertising strategy here in Russia, although expressly forbidden by Russian federal advertising law. But this is not only because Russian journalists are greedy.
I spoke with Dmitry Ganibalov about this question. He was the main organizer of the All-Russian Open Russian Advertising Festival and Journalist Competition Award for three years in a row, starting in 1998. Dmitry, who has worked in Russian advertising for 15 years, in fields spanning TV, newspapers, billboards, metro, etc., immediately asked me: "Which newspapers was Martine Self looking at?" Dmitry pointed out that some publications, like the Russian "Cosmopolitan" regularly sport 80% ad content. But Cosmo is a special case, with registered rights to place so many ads, and a matching profile. But even if you look at a paper like "Argumenty i fakty," you will find that it has plenty of ads.
Dmitry listed at least four categories of newspapers: 1) business, 2) informational, 3) entertainment, and 4) advertising. The approach of each of these types of newspapers to ads is different. Trade papers like Kommersant are generally picky about the ads that they place. Informational papers, those dealing with news and other kinds of information, like Izvestiia and Pravda, usually carry a wider range of ads, but depending on the internally determined profile of the paper, the paper may chose to limit the number of ads it places in order to retain a certain image in the eyes of the public.
Papers centered on entertainment as a rule will allow themselves more breadth in advertising quality and quantity. And of course, then there are the advertising sheets that arrive free in your mail box that are nothing but ads.
One reason that Dmitry gave as to why those who place ads resort to "hidden ads" is because the advertising departments in most newspapers and other channels of the mass media are bureacratically-heavy and not very flexible or willing to serve the needs of their clients. They sport very rigid price lists and are not keen on negotiating advertising packages that are more attractive to those placing ads. And they are usually staffed by people who have no knowledge of the advertising world and its needs.
Because the prices are so rigid and sometimes very high in the advertising departments, and because the staff are so deaf to advertising realities, it is often easier for ad placers to approach journalists and editors, who for $100 or so, will agree, for instance, to write some news report about certain market conditions, comparing products, and pronouncing all products of a certain type bad but a certain one. Or perhaps they will write an article that a new kind of food product has appeared in the city, and that it is a wonderful food product, without naming the brand specifically, but in the corner at the bottom of the page will be a very cheap ad with the brand name of that particular food product.
These kinds of "hidden ads," although forbidden by Russian law code, are hard to prosecute if they are well written, for journalists after all have to report on business and new items that appear in the city.
Dmitry said that in this lamentable state of affairs, the journalists and editors are simply stealing from their newspaper or editorial concern, and keeping from it its due profits. But he did not feel that this was the main method of placing ads. There are those who would like to do business in an honest and above board manner -- if only the laws governing this nascent industry were a little more favorable, and the mentality of the old way of doing business in Russia would fade away a bit faster.
Dmitry's conclusion is borne out by a whole host of statistics. At the end of 2001, Oleg Volkosha, the director of TNS/Gallup AdFact, declared that Russia was the fastest growing ad market in Europe. Of this 2001 market, TV earned 37.5% of the ad market with an ad volume of 480 million dollars; newspapers earned 24.2% of the market at a volume of 310 million dollars; and journals earned 12.5% of the market with 160 million dollar volume, as reported by the Russian Association of Advertising Agencies.
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