Since suffering a heavy blow from the 2000-2001 financial crisis, Turkey's advertising sector has been steadily recuperating. With advertising revenues continuing to grow and awards being won internationally, Turkish creative directors and executives alike are a lot more upbeat these days, although many businesses are still maintaining tight advertising budgets, stemming some of the sector's more expensive creative endeavours.
Yet diminished enthusiasm for splashing out on big advertising campaigns has not dimmed expectations of high future revenue growth.
"People in advertising expect to see overall spending increase by up to 50% in 2005 compared to 2004," says Asli Yorgancioglu, vice president for strategic planning at advertising agency Rafineri.
Though perhaps somewhat optimistic, such projections are indicative of the confidence that exists within Turkey's advertising community. Whilst a greater number of less elaborate commercials are expected to fuel the trend, the positive momentum of the economy is the best guarantee that 2005 will be a good year.
The positive forecast draws its strength from the fact that there has been increased spending on media advertising over the last few years. Figures from the Turkish Association of Advertising Agencies (TAAA) show the sector generating as much as $546m - excluding production costs - in the first six months of 2004 from TV, press, outdoor, cinema, radio and internet ads. This compares to the $879m generated during the whole of 2003, versus $730m in 2002 and $540m in 2001.
The level of advertising revenue generated last year alone was equally noteworthy. Inclusive of production costs and fees, local ad agencies pocketed a grand total of $1.331bn, according to the TAAA. Of this, local TV channels seized $524.2m in net revenue, with print media taking $357m. This was followed by radio, which took $45.5m versus cinema, which scraped together $13.6m.
Though impressive, such figures have been unable to camouflage the lasting after-effects of the financial crisis.
"The problem is that although the advertising revenue has increased, the fees paid [per ad] to the agencies have not," says Yorgancioglu. By implication, the majority of companies have not started spending again since the belt tightening that occurred in the aftermath of the financial meltdown.
But penny-pinching is not solely about maintaining corporate balance sheets. Pointedly, Yorgancioglu observes, "When companies pay less, they value the ideas behind the ads less also." Advertising agencies have thus lost some of their sparkle, with direct marketing and the use of the internet increasingly considered as offering cheap outlets to tap consumers. Nothing specific to Turkey perhaps, but an important local trend - if not global - nevertheless.
This however, is not to detract from the potential Turkish agencies have in terms of offering quality advertising. Some analysts assume that the below-par quality of television commercials is a reflection of the dwindling potential of local agencies to deliver what might internationally be considered cutting edge advertisements. Such an assumption overlooks the diversity that exists in terms of education, wealth, tastes and social orientation within the country. Focusing on nuanced and intelligent advertising is unlikely to draw maximum returns for a lot of basic consumer products.
The diversity of consumers in Turkey thus implies that advertisers often have to hit a middle ground when formulating their message, thereby making the product as appealing to as many potential buyers as possible. Yet this also narrows the scope for big budget campaigns.
Some members of the advertising sector however are concerned that the increasing trend towards focusing on the Turkish way of life could threaten the international appeal of Turkish commercials.
Such concerns have not prevented local agencies from receiving high international honours over the last couple of years though. Winning a silver and bronze lion at the Cannes International Advertising Festival in both 2003 and 2004 was something of an achievement for Turkey's home-grown Rafineri agency. Equally, Turkish art director Tolga Buyukdoganay and copywriter Ali Goral from Ajans Ultra won Print Bronze awards for the Young Creative Winner category at the big event. This marked something of a watershed for the sector, given that no Turkish agency had ever qualified for the finals at Cannes up until 2003.
Equally encouraging has been the number of local firms that have linked up with international brand names. According to figures from 2003, of the 73 TAAA members, 26 partnered with a foreign advertising company. The association attributes this trend to a strong desire to draw from international experience to fine-tune the local potential. However, it is also a consequence of the financial crisis, with an immediate decline in business forcing local brands to seek bigger partners for support.
Meanwhile, although the trend in Turkey has been for companies to keep an eye on their advertising budgets, some enterprises have been willing to go against the grain and dig a little deeper into their pockets.
A survey conducted by the Turkish media research centre MTM Medya Takip showed that between October 27 and November 24, 2003, US soft drinks giant Coca Cola splashed out $16.8m on local commercials. In this period, dairy products producer Sutas spent $16.4m, while food group Ulker was willing to inject $12.6m into its advertising campaign. Yet within this context it is important to note that the commercials of Coca Cola, Ulker, Sutas and Eti-Gida constituted as much as 40% of the total ad spending for all food companies.
Elsewhere, Turkish media giant Dogan Yayin Holding (DYH) has seen the financial returns from advertising jump over the last couple of years. Ad revenue between January and May 2004, when compared to the same period in 2003, was 55% up. More specifically, the 20 biggest advertisers, representing 80% of total advertising revenue for DYH, are reported to have increased advertising investments by 59% in the first five months of 2004.
Meanwhile, the true bell-wether of growth in the advertising sector will continue to be the overall state of the economy. Boosted consumer spending coupled with increased business confidence remain the primary concerns of the sector - with both factors seeming likely to develop in the year ahead as Turkey itself surges forwards.