There is a saying in Italy that when the government is weak, the
economy is at its strongest. As sayings go - and given the flighty
nature of Italian politics - this smacks more than a little of wishful
However, Italy is in the unusual position of having elected a hardline
For all that, the Italian economy defied most rational pundits to record
modest growth last year. The recently installed Prodi government took
over from Silvio Berlusconi’s Forza Italia coalition and, as if to
underline its financial probity, made inflation public enemy number
The Italians’ handling of the economy has been so uncharacteristically
severe, it is not beyond the bounds of the wildest conjecture that the
country might just sneak in under the monetary union-convergence
criteria. It’s still unlikely, but even that is no mean feat when you
consider Germany might not make it.
But all this belt-tightening and fiscal rectitude has its downside, as
the saying indicates. Low inflation means wage restraint and, typically,
a high level of unemployment, which is now at 13 per cent. The combined
effect of these two factors is a dampening down of consumer demand and
the advertising expenditure that depends on it.
Nevertheless, Zenith Media Worldwide has pencilled in a growth in
adspend of around 6 per cent this year and 5 per cent in 1998. The
biggest single area of opportunity for agencies is in the financial
services sector, which historically has not even made it into the
top-ten product category areas. Competition from international financial
institutions is forcing Zenith to reappraise its forecasts. Increased
spending by financial clients has already made this the tenth-largest
advertising sector last year, and it is expected to continue to increase
spend substantially over the next few years.
Television is the dominant medium, accounting for around 55 per cent of
total ad revenue. There are six major terrestrial channels operated by
two companies - the state broadcaster, RAI, and the
Berlusconi-controlled Mediaset. These two broadcasting groups account
for more than 90 per cent of viewing hours and 91 per cent of ad
revenue.The latter is not evenly split between the two broadcasters. RAI
derives more than half its income from the licence fee, and claims a 31
per cent share of TV ad revenue.
Mediaset, on the other hand, takes around 60 per cent of ad revenue
across its three stations, Italia 1, Rete 4 and Canale 5, chiefly by
undercutting the state broadcaster on rates and being able to offer
three times as much minutage.
In addition, the three stations are scheduled in a complementary manner,
with Italia 1 targeting a youth audience and Rete 4 appealing primarily
to housewives with children. RAI has a public service remit not
dissimilar to the BBC, but has pursued a populist approach in recent
years to such an extent that its general RAI 1 station is now the most
Satellite and cable penetration in Italy has lagged behind much of
western Europe, but Telepiu’, a terrestrial pay-TV service offering
three encrypted channels of sport, films and arts, has operated since
1991. Yet it can hardly be said there isn’t sufficient broadcast
competition in Italy - there are, after all, some 941 private commercial
Italy was an early supporter of broadcast decentralisation. Although
there are just three national radio networks, there are no fewer than
4,000 private stations throughout the country. The newspaper market is
heavily regionalised. Milan’s Corriere della Sera leads the pack with a
circulation close to three-quarters of a million, followed by Rome’s
daily paper, La Repubblica, with a circulation of 551,000. In total, 15
titles have circulations of more than 100,000 copies.
Weekly magazines have a powerful grip on the Italian market and, given
the complexity of the TV market, it is no surprise that listings
magazines are the biggest sellers. Europe’s most successful car title is
L’Automobile, which panders to the Italian male’s love of fast cars, and
sells more than a million copies in Italy a month.
The short shelf life of many Italian governments tends to prevent
long-term financial planning, and has certainly helped to create a
convoluted legislative marketplace. The Prodi government’s determination
to hold the reins on government spending has led to tough wage
negotiations and widespread strikes by government officials.
Air traffic controllers, policemen and women, railway workers and petrol
distributors have all come out on lengthy stoppages so far this year
while Confindustria, which represents 110,000 medium-sized and large
businesses, has pledged ’radical opposition’ to government tax-raising
Prodi’s Olive Tree coalition pledged to serve its full five-year term
after its election. One year on, it looks unlikely to make it past the
summer and, if the opinion polls are to be believed, Berlusconi’s Forza
Italia, a nine-month government veteran itself, is once again the most
popular party, with support of around 48 per cent.
However, the biggest problem for the advertising community in Italy lies
in trying to persuade the larger local clients of its efficacy.
’The market is growing and perhaps we should be more positive,’ Saatchi
and Saatchi Italy’s chief executive officer, Paulo Ettore, says. ’But,
personally, I believe we are facing some considerable problems. Some of
Italy’s biggest local clients tend not to use Italian agencies. Ferrero,
the largest TV advertiser in Italy, uses freelancers; Benetton uses a
photographer; Pirelli uses a foreign agency, as does Diesel. Even
Omnitel, the private mobile phone company, switched from using a
conventional agency to freelancers.
’If we can’t convince home-grown companies that they should hire a
professional agency to plan and structure their advertising for the long
term, we shouldn’t expect to attract multinational work either.The big
challenge facing agencies is trying to market the nature of the role we
It is not just the mainstream Italian agencies that fail to deliver
creatively - Ettore himself is still facing possible obscenity charges
after appearing naked in one infamous ad. But this is Italy, the home of
fashion, and, as many agencies are discovering, the place where there is
a thwarted creative talent inside almost every client.