The financial crisis conditions forced the majority of state companies to reduce the budgets for advertisement, or even to stop PR-campaigns to save on that.
Contracts are frozen, PR-agencies get less and less tasks, personnel are cut. For the first look, refusal from advertisement expenses is a fully logical step, but is it reasonable from the business point of view? Or is it possible to exploit the crisis situation as the base and get prepared to a new stage of business development? That was discussed by the correspondent of “Mass Media monitoring” project with Yaroslav Hobta, the president of Communication group “PRT”.
- Mr. Hobta, many enterprises economize on advertisement. How can it be justified?
- Advertisement and PR aren’t the main business expenses, so such a refusal in crisis times can be authorized. But I wouldn’t like to recommend an “optimization” like that: we’re living in an informational society and business is now based on outer communications.
Saving on the communications with surrounding world is like approaching depletion of relations with customers and partners – those groups which bring a profit. Holding the sales in times of crisis is far more necessary and difficult than in “peaceful” times. Furthermore, crisis will face its end tomorrow and the companies with their communications cut back will have to expand them again. Believe me – that will be times more expensive.
- Has the PRT communication group sensed the decrease of demand as the specialist of consulting and communication services?
- Yes, October was the month for Ukraine to face the financial crisis and some of our foreign clients stopped the contracts in a week until everything becomes clear. But now the situation is improving: old clients return, new ones appear. Looks like market has passed the top point of panic.
- Have you managed to return them?
- Our clients are wise and thrifty entrepreneurs, who realize that crisis will be over, and this is not the end. We didn’t have to persuade anyone.
- Can the present situation be used to get profit for companies and popularize their products?
- The present times are favorable to restructure business, make unpopular decisions, which are psychologically difficult to apply in the times of more or less stable market. Now it’s time to review budgets, personnel politics, create more effective labor evaluation and management system and refuse from everything that is not hard to lose. Naturally, the inner resources of the companies are mobilized during the crisis, fresh ideas appear, new horizons become available. Crisis is a possibility.
- Are there any advantages of the crisis for products advancement?
- It’s a good question. Crisis means less consumption. For instance, if a high profit of some product is stored, it can be reduced. But discussing some direct profits is hardly possible. If to measure the result in financial units, it decreases anyway. Saving the business essence and preparing to its development is the most useful task that can be carried out in present time.
- What should the PR-services market expect for in 2009 according to your forecasts?
- Predicting anything in nowadays conditions is difficult. It’s clear that 2008 will bring the advertisement market failure of a higher scale comparing to 2007. Crisis will deepen to the very bottom and will touch the real economic sector approximately in March, according to different forecasts. That is why I expect the first half of 2009 to be complicated for advertisement market, orders of a lower scales will be received, a less number of clients will appear. Summer will be characterized by inertia processes, and the new business season, starting from autumn, will support the growth. In general, the next year will feature the growth of pr-market although this rise won’t manage to cover the debts of 2009.
- Will the number of players decrease due to shortened amounts of advertisement and pr?
- Of course it will. The number of players will decrease.
- How do you think, will the budgets for advertisement move from towards the Internet from the other Mass Media during the crisis?
- The budgets for advertisement will partially rearrange towards Internet-editions, which obtain concrete readers. The Internet is so attractive because of low prices for contact and stable access to it. So Internet will be considered as a favorable recess for advertisers. They will try to make Internet more professional communication channel than it is now.
- Is PRT going to use right this channel in its collaboration with clients?
- Yes, we’re now thinking over those variants which will be revealed in the end of the year.
