Metro advertisement market capacity in 2004

On 18-19 November 2004 «TNS Gallup Media» carried out a study called «Potential capacity of the Metro advertisement market». The goal of the project was to assess the potential growth of the Moscow advertisement market. Methods: depth interviews (by phone), expert survey. The interviews were conducted with the representatives of advertisement agencies that actively operate in the Moscow metro advertisement market.

All study participants reckon that in 2004 the growth of the Metro advertisement market amounted to approximately 20-30%.

Most of the study participants refused to give absolute figures. However, most of them agreed to give approximate figures. In accordance with approximate estimates the market for the moment amounts to about 50 million dollars.

Most experts forecast that the metro advertisement market growth in 2005 will show an average growth of 10-20%.

All inquiry participants named the following factors that influence the potential of the metro advertisement market:

• For the moment the extensive method of marked development has exhausted itself or is close to its limit, i.e. in its present form the metro as an advertising media cannot house more advertisements than there already is at this moment.
• Advertisers show a stable interest in the Metro with a tendency to a slight growth. Experts note that advertisers’ attitude to the Metro also depends on the pricing policies of the companies providing the services of advertisement media of other type.
• The majority of experts reckon the main market growth will be associated with financial reasons. In this respect a price increase due to a higher demand is expected on the one hand. And introduction of UTII (unified tax on imputed income) for distribution and placement of outdoor advertisement in Moscow from 1 January 2005 will inevitably lead to an increase of advertisement cost.
• The Metro advertisement market depends on the season to some extent. According to what experts say, some months of year 2005 have already been fully sold out and the volume of advertisement for that period cannot be technically increased. However, for example, the first decade still permits to increase the amount of advertisement placed in the metro by 10-15%.

It is exactly the unpredictability of such factors as upgrade of advertising media and an increase of advertisement placement price that lead to rather a large dispersion of experts’ estimations in regard to metro advertisement market growth. However all interviewed experts assert that the metro advertisement market growth in 2005 will slow down in comparison to 2004 growth. The common opinion of all experts is that without substantial modifications and investments to the market evolution its growth rate will decrease and no market growth will be possible solely due to the growth of prices.