Worldwide Advertising: Country Profiles - Italy/It is surprising that in a country so synonymous with art and culture, key advertisers including Pirelli and Diesel use foreign agencies to promote their brands. Richard Cook reports

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 thinking.

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

monetarist government.

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.