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. Last Updated: 07/27/2016

Slashing Through a Billboard Jungle

MTBillboards cluttering up the view of Tverskaya Ulitsa from Manezhnaya Ploshchad. The city has more than 24,300 outdoor ads.
Muscovites are set to get some relief from the thousands of billboards and banners that clutter streets, light posts and sidewalks in the city center, obscuring historic buildings and even each other in a battle to grab the attention of passers-by.

"It is necessary to clean the center of Moscow of billboards," Moscow Mayor Yury Luzhkov said earlier this month during a meeting with the City Development Council.

"Prepare the legislation, and I will pull them down," Luzhkov said, according to Interfax.

City drafters immediately went to work on legislation meant to trim back and more strictly regulate outdoor advertising in the downtown area.

A decree temporarily banning the erection of new advertising venues will be ready for Luzhkov's stamp of approval within weeks, Moscow's chief architect Alexander Kuzmin said at a City Hall meeting last week, Interfax reported.

Within three weeks of the signing, the city must draw up new regulations on downtown advertising, according to the draft degree.

Luzhkov's decision to crack down on advertising signals an apparent change of heart. He has for years talked about pulling down some of the billboards, but the $200 to $300 that City Hall gets from each ad every month proved too alluring.

The average cost of advertising on one side of a billboard is about $700 a month.

Moscow pulls in at least $25 million a year from ads on buildings and rights to place billboards, according to the Espar-Analitik market research agency.

"This is one of reasons the government has not yet reduced the number of billboards even though the issue has been a hot one for the past two to three years," said Andrei Beryozkin, general director of Espar-Analitik.

However, Beryozkin, other advertising agencies and even advertisers themselves agreed it is high time that Moscow clamp down on outdoor ads.

"The need for reducing the number of billboards has been urgent for a few years and, obviously, the critical moment has come," said Sergei Zheleznyak, an executive director at News Outdoor, Russia's largest outdoor advertising company.

"Outdoor advertising needs to be regulated because cases of billboards obscuring other billboards have become very common," Zheleznyak said.

Just a decade ago, the only outdoor ads carried Soviet propaganda slogans such as "We Are Aiming at Communism" or "Lenin Lived, Lenin Lives, Lenin Will Live Forever."

Quotations by Soviet leaders -- like the popular Leonid Brezhnev statement "Economics Must Be Economical" -- were printed in white letters on a red background.

There were just a handful of posters that attempted to look like Western-style advertisements. The most well-known carried slogans like "Fly With Aeroflot," as if the Soviet people had any choice of which airline to fly with, and "Keep Your Money in Sberegatelnaya Kassa," the former name of Sberbank and the only bank at the time to deposit savings.

Then at the start of the 1990s the first multinational companies like Coca-Cola and Philip Morris placed their first billboards in Moscow. Other foreign firms quickly followed suit.

Russian companies began jumping on the bandwagon en masse after the 1998 financial crisis, when television advertising was deemed too expensive.

The number of outdoor ads in Moscow has grown from 2,000 in 1994 to more than 24,300 today, excluding ads in the metro and on transport, according to Espar-Analitik.

Almost 10,000, or about 40 percent of those ads, are located in downtown Moscow.

More than 35 percent of Russia's outdoor advertising is in Moscow.

The country's outdoor advertising industry was worth an estimated $150 million in 2000, and industry experts predict it will grow 40 percent to $250 million this year.

In comparison, Britain's outdoor advertising industry is worth about $1 billion and the United States' brings in $4.5 billion.

Outdoor advertising accounts for 15 percent of the Russian advertising market, according to advertising experts. The two bigger segments are print media with 30 percent and television with 25 percent.

In Western countries, outdoor ads make up 5 percent to 8 percent of the advertising market.

The largest outdoor advertisers are tobacco firms, which have 25 percent of the Moscow market and up to 50 percent of regional markets, according to Espar-Analitik.

Japan Tobacco International is the largest outdoor advertiser in Russia, spending more than $650,000 a month, the agency said. In August, British-American Tobacco was second at $550,000, followed by Philip Morris at $430,000.

The tobacco trinity is followed by Samsung Electronics and LG Electronics. Mobile-phone company Vimpelcom, the owner of the Beeline brand, ranks sixth, while rival MTS is 12th.

Among state entities, the tax and interior ministries have the largest monthly budgets for outdoor advertising -- $210,900 and $197,000, respectively. However, government agencies -- as well as the city, which places congratulatory ads on holidays -- often get space for free from agencies that haven't sold space to advertisers.

While supporting any moves to thin out advertising in the city center, Beryozkin said the problem does not lie in the number of ads in Moscow but in where they are placed.

London has about as many outdoor ads as Moscow, but in the British capital the billboards are evenly spread around the city, he said. Here, billboards, banners and other outdoor ads mainly blanket the city center.

Billboards in London are well placed throughout the city, so they work well with consumers, said Andrei Dirugin, media planning and buying supervisor at Philip Morris.

But in Moscow "such a high density of outdoor media is above the limit of what one may call a reasonable advertising market," Dirugin said. "The Moscow population is also getting frustrated about this."

Theoretically, about 150 billboards would be enough to run a campaign in Moscow, but due to the amount of existing outdoor ads, a company needs to take out at least 1,000 to make an impact, he said.

Thus, City Hall should not lose any money in cutting back on outdoor ads, Dirugin and other advertising people said. Fewer ads make more effective ads -- and lead to happier advertisers who are willing to pay more for fewer placements.