The State Commission for the Protection of Economic Competition (SCPEC) has completed the study of the field of advertising services in Armenia.

The main task of this work of the Commission was to find out the competition relations in the advertising field, the structure of the market, the number of operating businesses, the barriers to entry and other issues.

The SCPEC has observed the advertising movements of 2018 and 2019 on television, radio and the Internet. 33 sites with the highest ratings on www.similarweb.com and www.alexa.com were viewed for Internet advertising.

The Commission does not disclose the full version of the study as it contains trade secrets. This study is not an exception, there have been cases in the past when the work done by SCPEC has not been published, and the lines that are a trade secret in the published documents have been closed as a rule.

The main results of the study on the Armenian advertising market are available in the year-end summary of SCPEC 2020.

The Commission answered the questions of Media.am that they found competition violations in all media directions and most of all in the TV market.

“There are dominant TV companies in the field and companies that are considered sales houses by contract, whose pricing policy is risky.”

There are no companies occupying a dominant position on the Internet and radio, the main problem is the transparency of price offers and legislative gaps.

TV advertising market

The TV companies with the largest audience and providing a large volume of advertising services were studied. High concentration was registered in the field during the studied years: 74% of TV commercials fell to Armenia, Shant and AR TV companies.

It turned out that TV companies generally do not have criteria set for the prices and discount policies of advertising types.

According to the study, TV companies can discriminate against businesses by directing them directly to advertising agencies or sales houses, violating the provisions of competition law.

The Commission considers that it is necessary to ensure clear public criteria for the formation of the price of advertising sold by sales houses and the discount policy.

“At the same time, in order not to create artificial barriers for sales houses, the TV companies should not sign contracts with them on the condition of exclusivity.”

Internet advertising

In contrast to TV advertising, the level of concentration on Internet platforms was low. Out of the 33 websites studied, the most advertisements were placed by News.am, Tert.am and 1in.am news websites – about 38%.

In this field also, according to the Commission, there is no clear pricing policy, criteria set for working through advertising agencies, as a result of which anti-competitive problems may arise.

There are also no clear regulations for Internet advertising, including advertising through websites. There are also no settings for Catfish, Native Image, Native top, Fullscreen, PreRoll video and other types of advertising forms.

According to the study, unequal competition in the field can also occur because the economic entities that distribute advertisements through the Internet are not registered and are not controlled by law. There is no responsible authorized body that will be obliged to follow internet advertisements.

Radio advertising

There is no more concentration in the radio advertising market, 3 out of 16 observed companies – Autoradio, Radio Van and Radio Alfa have about 47% share in the market.

According to the Commission, many problems in the field of advertising are related to legislative gaps. For example, some types of advertising are not regulated, such as payment and settlement organizations advertising through payment terminals, retail chains and public catering establishments, bags, napkins and other items.

Many types of TV and radio advertising (for example, live advertising, PR, Product Placement, etc.) are also not regulated.

The study was completely carried out by the employees of the Commission. This is the first attempt to comprehensively study the advertising market.

It was initially not well received, especially by online media. There were concerns that the structure did not guarantee the confidentiality of commercial contracts in particular. A meeting discussion took place in 2020, only after which the media provided the necessary documents for the study.

Gayane Asryan