Good times in Baltic advertising industry
Before the Balticbest 2019, we take a look at the Baltic advertising business. The best agencies in the Baltic region and the most creative works can be seen on August 30 at the Balticbest festival.
Interview with Andris Blaka, Shareholder of AGE Com (Latvia)
Age Com is the largest advertising agency holding company in the Baltics with annual revenue of 77 million euros. Ogilvy, Media House, Mediacom, Mindshare are some of the agency brands in the holding company.
How would you evaluate the current climate on the Baltic advertising market?
It has been rather good year for us, especially in Latvia. We are strengthening our positions both on the creative and media side. As a businessman, I am quite satisfied with the results and outlook for this year.
As a country we are performing best in Latvia, but as an individual agency Ogilvy Lithuania is doing really great and I cannot complain about Estonia either. They all have very different positioning. Lithuanians are very strong on the creative side and showcased great results during the award season last year. Estonians are more tech oriented, meaning that all digital products come by default if you are a client of Taevas Ogilvy. Media and PR agencies are also growing step-by-step with some interesting projects in retail and sports marketing.
On a wider scale, the industry is obviously changing very rapidly, everyone is looking for a new approach. Estonia, as the most developed region, has always been a good testing ground for us. My main concern at this point is closely tied to human resources and employer branding. How to become an attractive employer? How to attract the best talent? Millennials are disrupting the business as we know it. We are talking of offices with more parking spaces for bikes, vegan food options etc. On a more serious note, it is a crucial topic for any employer.
Technology is another aspect of this new reality. With the help of our global network, we try to do more programmatic media buying and automation of processes, as well as developing some new tools ourselves. We just launched a new WPP tool called Live Panel – a research tool you feed into the system and receive up-to-date data from Kantar allowing you to target segments with just a click of a button. We also have a tool for influencer marketing, which is still a very shady business, but there is a lot of interest from the client's side, hence we tried to add more effectiveness and transparency here. And the list goes on really. Technology helps us to create better products with more competitive prices.
The last time we met, you were very pessimistic as opposed to today, when you clearly have a positive outlook on things. What has changed?
Compared to 1-2 years ago, advertising is in a much better shape. Clients somehow realised that they need good quality creative products, not just singular pieces of media or some kind of layout. Good storytelling and strategy are in high demand. During the previous crisis, marketing decisions were made by people who have nothing to do with marketing. The price was more important than the quality, which is still true, but there are huge improvements. It is clear that on a highly competitive marketplace, strategy is something you need to pay for. The position of business consultancy is clearly growing. Clients are more eager to use agencies. Last year, we grew 20% in Latvia and I would put my money on Lithuania in 2019. Overall the group went from 73 million to 77 million.
Then again, I am surprised by a couple of things happening on the market. I have been in this business for 30 years now and it has always been our job to remain objective, consult our clients with no links to the media. Today our competitors are going against it and joining forces with the media, which rules out objectiveness. Big clients trust us with their planning and media investment, assuming we are independent bodies providing the best option for their money.
Which business sectors are showcasing biggest potential at the moment?
Banks used to be the biggest players, but due to new legislation, it is not the case anymore. Banking as a sector is a bit lost at the moment, resulting in overregulation and censorship. Luckily, everybody is spending a little. Glad to see the emergence of SMEs, who are being very smart with their marketing investment, thus, shaping healthy new brands. It is hard to name any industries in particular because we have clients all across the spectrum.
There is an increasing demand for pan-Baltic campaigns, but clients are struggling to find strong agency networks who would be able to provide the same quality across all three countries. What is your view on that?
We have offered pan-Baltic campaigns since the very beginning and it is partly the reason behind our success. We are working with several big pan-Baltic clients who all have different setups. We match our structure with their needs, meaning their account is set up the way they want it. For more important services, like strategic planning for example, we have people who travel the Baltics. As a region, we are mostly linked to Poland, but we do have clients from Russia, Belarus and Ukraine as well.
Have you noticed any successful newcomers in the market?
I do not think so. I’ve seen some companies being established by previous agency workers who decide to take the leap and start their own venture. There are some new smaller players you can hardly consider competition. Probably starting your own agency is not a piece of cake. The brightest minds are entering the start-up world and leaving the Baltics behind. Why should they play in this small pond if there are bigger fish in the sea? Competition is a good thing because it pushes you to invent and stay sharp.