The advertising industry underwent major changes due to the crisis, cutting out deadwood – in this way the fierce competition in the industry was kept at a high level, Kaspars Driķis, head of the Internet research company Gemius Latvia, indicates in an interview to the business news portal BNN.
He also adds there is sufficient skilled workforce in the Latvian advertising industry, although it is hard to find people with a spark in their eyes and real desire to make a change, not just work for the sake of working.
What are the recent key events in your industry?
Lately, mobile operators have fostered the mobile Internet consumption by reducing tariffs for the Internet on phones, as well as offering smartphones convenient for online browsing. This also prompts web content builders to adjust their content to different mobile devices’ technical requirements.
For us, this means not only serving ads on mobile sites, but also on mobile applications, as well as higher demand for mobile Internet measurements. If traditionally summer and holidays mark the time with dropping demand for the Internet, then now the Internet use on mobile devices remains the same on working days and weekends.
There are currently good prospects for mobile marketing boom in Latvia, opening up new business opportunities. Also rapid spread of iPad should be mentioned, providing new challenges to the industry in terms of mobile application development. Compared to other mobile devices, iPad has raised its market share in Latvia from 3% in 2010 to 21% in 2011 and it is still continuing to grow.
Do you lack skilled workforce?
Given that a small number of employees ensure Gemius operations in Latvia, because the main Gemius office employing around 200 workers is located in Poland, we don’t feel the lack of qualified workers. However, it is difficult to find people with spark in their eyes, eager to do make a change rather than just work because they have to. We can say that Gemius has dealt with labour export and we have proved that there are people in Latvia who can successfully compete on the international labour market.
Our Polish office chose our former colleague Toms Panders as an international job candidate and he is now AdOcean product manager for the Eastern and Central Europe, as well as the Middle East and North African markets. While our former colleague Lauris Lietavietis is the product manager of gemiusAudience not only in Latvia, but also in the Central and Eastern European region. This once again shows that we don’t lack skilled workers able to operate not only at Latvia’s level, but also at the international arena.
What changes would you like to see in the Latvian legislation?
Currently, I cannot think of any special law that could foster the industry I represent, but if such laws or amendments are adopted, I would like this to be discussed with the industry representatives. I believe it is necessary if Latvia wants to adopt laws to promote the industry expansion and boost its competitiveness.
How did the crisis affect your industry?
Although officially we represent the market and opinion research industry; however, we feel that we belong more to the advertising industry, which also affects us the most. Since we provide data to advertising and media agencies, our operations particularly depend on developments and trends in this industry. With economy contracting, companies carried out austerity measures, first cutting the marketing and advertising budgets. From 2008 – 2009 the advertising market turnover fell 46%. Media advertising market halved within a year, dropping further 13% in 2009 – 2010.
However, it is good that more and more advertisers place greater importance on the Internet. In 2010, the Internet as an advertising channel formed 13% of the total advertising. It reported the second smallest drop, proving that the Internet is a stable advertising channel. Before the crisis, there was a sharp increase in the number of advertising agencies. Even now the number is large, yet the crisis brought changes by cutting out deadwood, thus keeping the industry’s quality bar high enough due to the fierce competition.
When could your company attain the pre-crisis performance?
Since Gemius started operating in Latvia shortly before the crisis started (SIA Gemius Latvia was founded in May 2008), as a new company we expanded gradually, boosting the turnover. By expanding and improving the range of services offered, we have continuously increased our turnover also during the crisis. Given that the industry is starting to recover, we have an optimistic future outlook, hoping to further expand our business.
How do you assess the government’s implemented economic policiy to improve the Latvian economic situation?
We would be glad if the economic situation improved in Latvia, as common practice proves that along with the economic situation improvement and increasing purchasing power, companies allocate more resources to advertising and marketing.
However, the way the economic situation is currently being improved, in my opinion, is not the right one, especially, in a long run. I think we will feel the first consequences already this autumn, when the national census results are published. It seems they will be shocking and also affect our industry, because emigrants are mostly the economically-active residents – advertisers’ most desired target audience.
When planning the economic recovery policy, the government should think more in a long term, rather than strive for immediate results, which may later turn out to be misleading. Also, it is impossible for us as a company to plan anything in a long term – sometimes it is even impossible to plan the next year’s budget, as it is not known when a new law or tax will be introduced, as well as how many times the electricity, gas and petrol prices will have changed by that time.