The television advertising sector in Armenia is at a stage of redevelopment.
Two important changes were made, as a result of which advertising revenue will increase and be distributed among the private channels.
First, commercial advertising will no longer appear on public television (the bill has not yet become law, but the state broadcaster has already voluntarily refused to air commercials), which implies the other channels will see an increase in advertising.
The second important change is connected to alcohol becoming one of the advertised products. Advertising strong alcoholic beverages was prohibited in Armenia for 5 years (except for the locally produced brandy, considered a national value).
But after amendments to the Law on Advertising and the Law on Television and Radio, the ban continued to be in effect after July 31, 2014, only during the most watched hours (6 am to 10:30 pm). The purpose of the restriction on time was to protect children especially from the effect of advertising alcoholic beverages.
It’s been a few months that the advertising of strong alcoholic beverages (20 and more units of alcohol) has appeared on late night television. This allows TV companies to expect additional advertising revenue.
The return of alcohol advertising to TV was substantiated by taking into account TV companies’ business interests (except for the Public TV Company of Armenia, which in any case becomes an ad-free channel).
The goal of amending the law, according to Republican Party of Armenia MP Samvel Farmanyan, “is the self-sufficiency and financial stability of our TV companies; therefore, it would improve the quality of television.” During discussion of the law, in March 2014, he assured lawmakers that the amendment would help all TV companies overcome financial difficulties, allowing to secure additional revenue of up to 1 billion AMD annually (about $2.5 million USD at the time).
Tigran Safaryan, the director of Media International Service sales house, which sells advertising in Armenia, is more cautious in his predictions. In his opinion, the permitting of alcohol advertising to some extent will effect but won’t seriously change the situation, since advertising is tied to the overall market.
“We can talk about the expected financial flows more clearly at the end of the year, but we hope that in the first year, about 500–600 million dram will be directed to television,” Safaryan told Media.am.
Media International Service has the exclusive right to sell advertising to Armenia TV, Shant TV, ATV, and ArmNews. In terms of advertising volume, these four channels are the implicit leaders in the sector. Safaryan assessed Armenia’s advertising sector at $20 million and said that until 2013, this figure was twice inflated.
Of course, allowing the advertising of strong alcoholic beverages, first of all, will increase the volume of advertising of foreign goods on Armenian television, since international brands have a major role in the advertising market (hygienic items, drinks). While local manufacturers mainly produce cheap vodka and don’t particularly have a large demand for TV advertising.
It’s understandable that the desire to buy vodka doesn’t depend on advertising; those who buy cheap vodka will continue to buy the cheap stuff, while those preferring expensive drinks will hardly be guided by a TV ad.
And in this situation the opportunity to bring money from outside increases, from which not only the aforementioned four major TV channels, but also those channels not included in the sales house that are trying to play in the advertising sector independently can benefit.
According to Yerkir Media News Programs Director Gegham Manukyan, major international alcohol brands are ready to spend money on advertising, which today mainly takes the form of billboard advertising. And why not direct that money also to television?
“The purpose of alcohol advertising was not that well substantiated in parliament. It was said that we are a people that doesn’t drink, that we don’t have detox centers [AM]. But, in fact, we are the people who drink and smoke the most among former Soviet states. In fact, what we’re talking about is outside money. The Ukrainian Nemiroff vodka, for example, has a budget of $10 million, which one way or another it has to spend on advertising, including also in Armenia,” says Manukyan.
In Status Holding advertising agency Director Tigran Baloyan’s opinion, from a purely business perspective (for importers, producers, and circulation among shops, as well as TV companies), permitting alcohol advertising is a welcome decision.
“But, on the other hand, the outrageous indicators of increase in strong alcohol consumption (especially vodka) testify to the breakdown of the nation’s gene pool. Russia, for example, has found itself at the edge of collapse because of the alcohol rates. I see in that a political decision to drowse our own nation. And if we too want to be guided by that model, we can consider business a priority, and Armenia’s population and image, secondary,” he says.
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