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. Last Updated: 07/27/2016

Booming Ad Market Tops Pre-Crisis Level

Russia's advertising market is expected to balloon by more than 50 percent this year to $2.64 billion, the Russian Association of Advertising Agencies, or RARA, said Thursday.

It will be the first time the market exceeds pre-crisis levels, which peaked at $1.7 billion to $1.8 billion in 1998, before imploding to a mere $760 million the following year.

"The advertising industry reflects the state of things in the country's economy," said RARA president Vladimir Yevstafyev. "Russia's economy is stabilizing and the advertising market is growing."

Among the fastest growing sectors in the advertising industry are television advertising, which is expected to total $880 million, 83 percent up from last year; Internet advertising, which is to reach $9 million, a 125 percent increase on last year; and advertising in cinemas, which is expected to double this year and reach $8 million.

Advertising Market
1998$1.7-$1.8 billion
1999$760 million
2000$1.1 billion
2001$1.73 billion
2002*$2.64 billion
Source: Russian Association of Advertising Agencies

Radio advertising is forecast to grow 27 percent to $80 million, and print advertising is to total $590 million -- $380 million in newspapers and $210 million in magazines -- an increase of 26 percent.

Outdoor advertising is predicted to grow by 45 percent and reach $400 million, while direct marketing is to grow by 55 percent to $170 million.

Yevstafyev said one of the driving forces behind the market's growth was an average rise of 30 percent in the cost of advertising.

The entry on to the market of large, new advertisers, and a swelling in the number of small- and medium-sized advertisers also fueled growth.

Andrei Fedotov, executive director of research company RPRG, agreed with RARA's forecast for this year's advertising market, but estimated last year's advertising market at $1.9 billion, in contrast to RARA's $1.7 billion.

"Television and outdoor advertising grew mainly due to increasing prices and a bigger number of medium-sized advertisers with budgets of $500,000 to $1 million," Fedotov said. He added that television advertising fees would continue to grow, getting closer to Western prices, which are on average 3 1/2 times higher.

"This means only the largest advertisers will be able to afford television advertising," Fedotov said. "This isn't bad, since this will lead to growth in other media, such as radio and newspapers, and regional media especially."

Print and radio advertising has risen due to the increasing number of newspapers, magazines and radio stations, as well as an increase in prices, he added.

Yevstafyev said the advertising market is expected to grow at about the same rate next year and reach $4 billion.