First-time visitors to Russia can't miss the giant advertising hoardings that dominate the cityscapes. These jumbo sites - unique to Moscow and St Petersburg - are ads that wrap entire buildings.
What started as an attempt to beautify the construction sites that continue to appear across the two cities, has expanded to cover office and residential buildings. At first, these sites were a way to break through the clutter - if you can't stand out with groundbreaking creative, you can dominate by being massive. However, although jumbo sizes still make an impact, they are now more common and their size alone is no longer shocking.
The Russian outdoor market is booming. In 2004, it was worth $170 million, making it the fourth-largest in Europe. The number of outdoor sites has increased by 80 per cent since 2003. The total ad market is projected to grow by 30 per cent in 2005, with outdoor ads taking a 20 per cent share of adspend and growing at the same rate as the market. The boom is unlikely to slow in the near future.
More than one-third of the market is controlled by ten network contractors, with the remaining 65 per cent owned and sold by smaller, local operators. When the ad market was in its infancy, operators installed sites wherever they wanted. But the days of the "Wild East" are over, and if a company tries to erect a site without proper licensing, local government has it removed.
The jumbo site market is structured differently from the rest of the outdoor market. The majority of jumbo sites are owned and sold by suppliers created by construction companies. Some network contractors, such as DEFI and News Outdoor, have registered several jumbo sites but they are the exception.
In addition to these legal sellers, there are a few of what translate from Russian as "one-day" companies - companies that form, sell their services and then disappear. Often the sites they have access to are so exclusive that advertisers are willing to take the risk of working with them. A typical price for a jumbo site is about $250,000 a month. The same budget would pay for a billboard campaign of more than 200 facades, which would provide good coverage of Moscow.
There has been a recent trend towards regional consolidation. News Outdoor and Gallery have both developed their regional networks with the acquisition of smaller, independent operators. Another trend is a move to improve the efficiency of individual sites by investing in new technologies.
There are also changes afoot that will affect the type of advertisers that appear on outdoor sites. Last September, beer advertising on TV was strictly limited, resulting in a shift of budget to outdoor. Tobacco ads seem likely to be banned from outdoor sites by the end of this year.
Meanwhile, the tourists may gawp at the building wraps but what they really want to see lies behind the posters, so city governments are removing the ads from historic city centres rapidly.
- Kelly Leichenko is the business development and marketing director at Optimum Media OMD, Moscow.