The World: Insider's View - Finland

In a country with a tiny population but some of the most advanced technology in the world, Finland's ad industry must look to the East for growth, Heikki Kauppila says.

Finland: millions of lakes; a few people; the first country in the world to switch over to digital television and a world leader in mobile communications and e-government.

So what does one of the most remote and rural countries in Western Europe mean for advertising?

Well, the past five years have been tough. The market has been beset by slow growth and extensive consolidation and only now are the first signs of recovery emerging. According to Gallup, adspend in Finland was EUR1.3 billion in 2000 and had only increased to EUR1.4 billion by 2005. Although hope was inspired by growth of 2 per cent last year.

During this period of slow or non-existent growth, many agencies engaged in mergers and acquisitions and ended up becoming part of international networks. This has resulted in a field of fiercely competitive agencies fighting over business within a stable client pool. Meanwhile, clients have followed the trends set elsewhere and are demanding more one-stop shopping.

The international agencies that have established in Finland are able to offer these services by working with their own teams and with local experts. This trend is something that we expect to see exacerbated over the next few years by growing demand for the complete range of communications.

The next big step will come next year with the switch to digital TV.

Finland is leading the world in this endeavour and will become a testing ground for the combined impact of digital TV and one of the most advanced mobile phone networks in the world, with 3G opening the way for all communications to go mobile. We are expecting to see more sponsored programmes and product placement and increased consumer choice.

For the advertising industry the challenge is blindingly obvious: consumer choice is increasing exponentially in one of the smallest Western markets on the planet. Finland has a population of 5,000,000. Content must be compelling and relevant for it to achieve any serious market impact. Yet, it can only be tailored so much for a population and language group of this size.

So the real opportunity lies in international expansion. Retail businesses have already started to expand to the Baltics, and Moscow is the next hotspot destination for Finnish businesses. Finland has long experience of dealings in Russia and the network consolidation has given us the international tools and systems to be able to build strong international brands in the future.

So in a small but advanced country like Finland, the real opportunity lies in taking the best of what we have and what we know aboard, starting to the East. The knowledge and support of an international network will be essential for growth. Thank God we have it.

- Heikki Kauppila is the managing director of BBDO Finland.

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