Swedish Agency Brings Propaganda to Russia

AMG-Propaganda may be the new kid on the block in the Russian advertising business, but it hasn't wasted any time getting down to a trick familiar to many of the more infamous Western agencies: scandal.

Though not quite on the scale of Bennetton's use of dying AIDS patients or Calvin Klein's pubescent-looking models in underwear, AMG-Propaganda's current poster campaign for Tarragona chocolate has sparked public reaction with its innovative use of images of presidents Boris Yeltsin and Bill Clinton.

Rather than using a basic product shot and logo, the posters adopt a jaunty comic-book approach underscored by the maxim "Peace, Friendship, Raisins and Nuts. Milk Chocolate with Love from Sweden."

"Some people have been calling up radio stations asking if Clinton and Yeltsin are making money out of chocolate bars," said Leonid Shutov, client services director at AMG-Propaganda. "Others have been outraged that we are even using these images at all. But we think this is a good reaction. It's really what the campaign has been designed to do."

If AMG-Propaganda has succeeded in ruffling feathers among the Russian public, it has also created a stir in Russian advertising industry, by offering one specialization -- creative services -- in an industry dominated by huge, full service agencies.

Established in Moscow at the beginning of 1997, the agency is part of the Swedish-based AMG-International network, which has seven outlets in major European cities and is set to add Copenhagen and Oslo to its roster by the end of this year.

Each branch of the network is given almost complete autonomy from the parent company and all have localized names -- hence Propaganda. But the Moscow branch was given one vague though demanding brief by the parent company: to inject a larger measure of creativity into Russian advertising.

The Russian industry is dominated by monolithic agencies, where everyone from the largest Western imports, BBDO and McCann Erikson, to the smaller local satellite agencies combine creative design, media services, market research and account handling under one roof.

AMG-Propaganda's concentration on one service is an effort to respond to the increasingly more sophisticated and more finely tuned Russian marketplace.

"Our sole reason for existence is to supply high-quality creative work and to make our money only from this," said Shutov. "Many of the agencies operating in Russia today are primarily interested in securing the client's media budget and charging their commissions on this. The creative side of things is thrown in almost as an afterthought."

Added emphasis on creativity, Shutov hopes, will produce advertising that is more effective, more effectively targeted at the Russian market and ultimately able to shift more units.

It will be a new step for the Russian ad industry, which has already begun moving away from translated Western advertising and toward locally produced spots and billboards.

"In the beginning, it was more important just to get things done and not to worry about the quality," Shutov said. "But now that we have a system in place, it's time to concentrate on quality. A higher quality of creative work translates directly into higher effectiveness in putting across a client's message."

Moreover, specialization is beneficial for the agencies themselves, Shutov said, allowing for a more efficient allocation of resources.

"In terms of overall size, we will be quite a lot smaller than the some agencies," he said. "But in the creative function, when we are fully established we will be as large or larger than the biggest agencies."

Larger, established agencies appear not to be threatened by this new development. They say agencies such as Propaganda will end up buying services from them, and a revitalized industry will benefit everyone concerned.

"Every market has moved through this specialization progress and its very timely for it to be happening now [in Russia]," said Vladimir Rass, managing director of media direction CEE, a media arm of BBDO. "It shows that the Russian market is maturing.

"I think that it probably took a certain degree of courage [on the part of Propaganda] to announce this," Rass said. "Clients are not used to getting creative services from one agency and buying media services from another. You have to push up against the accepted way of doing things. And so I think it was a rather a bold move."

While Propaganda may have been the first to openly declare its specialization, Rass said it is a general emerging trend that has even affected full service agencies. He said BBDO has begun to develop local creativity more actively and pass on specific contracts, such as media planning and public relations to other companies within the BBDO group.

Smaller agencies have also begun to concentrate on providing a single service, Rass said, although they may not trumpet the fact.

Skepticism about such a single-service approach is perhaps the greatest obstacle that AMG-Propaganda has encountered so far.

"I think a lot of people understand the necessity of what we are doing and are enthusiastic," Shutov said. "But some are more cautious and ask why they should pay for this service when from other agencies, they reckon that they are getting it for free. But if they are not willing to pay for creativity and they don't understand the value of it, then we are not for them."

A number of companies have opted for the new approach, and AMG-Propaganda's client list in the Russian market now includes Reebok, Viola, Midnight Sun Butter, Swedish Match and Cloetta, the makers of Tarragona chocolate.

In keeping with its focus on creativity, the agency hopes to attract internationally recognized names to collaborate on its campaigns. Work has already been commissioned from the award-winning photographer Jager Aren, known for his work for Volvo, and negotiations are in progress with the renowned photographer Helmut Newton for an upcoming cigarette campaign.