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Georgia’s Advertising Market in Crisis

Crisis hits  Georgia’s  advertising market. The private sector saves money on advertising and spends less than in previous years.

Since April 1, new advertising regulations have entered into force in Georgia, which limited the air time for advertising to 12 minutes per  hour and 4 minutes for  sponsorship services. Changes still at the level of the project became the object of fierce criticism from a number of media, who believed that the advertising restrictions would lead to higher prices and thus lower demand that on the one hand will hit on the independence of broadcasters, on the other – will harm the advertising business.

But now, a few months after the adoption of the new standards, many advertising companies believe that the reason for the decline in their industry was caused not by new regulations but  the economic crisis. According to TV International founder George Sulakauri,  this type of regulations existed before 2005 and  their introduction  has changed almost  nothing.

“The prices for  advertising grow each year, and the current growth is not associated with  the new regulations. All TV companies  have their  advertising resource that can be always efficiently used. Today the problem lies  not in the regulations but in the economic crisis. It’s hard to give specific figures, but the decline trend in demand is quite obvious. Many regional broadcasters hoped that the new regulation would increase the interest in them, but it was a miscalculation, as advertising in the regional TV company will eventually cost more than in one central channel  watched  across the country, “- Sulakauri notes.

Shalva Alavidze,  Director of W Media company, also explains  problems in the advertising business by the economic crisis. According to him, the regulations are not that problematic, some TV companies  even received profits.

“Customers didn’t hailed   regulations but met them with understanding. In general, these regulations are  nonsense, besides the developers have not considered many things, and now they are trying to finalize the document. As for prices, they even  have decreased due to the economic crisis. The problem is that customers prefer to spend less. The country is experiencing  stagnation, most try  to save money, including on advertising, “- he explains.