State of Media Advertising Market in Azerbaijan Deteriorated

The global advertising market continued upward trend in 2014, exceeding the amount of 2013 by $ 5 billion and reaching $ 508 billion. Of this amount 92.6% or $ 472 billion come on the market of media advertising. The outer and film advertising earned only 36 billion, where the lion's share belongs to the outdoor advertising.

This follows from the findings of the media agency Zenith Optimedia, which predicts growth of the advertising market in 2015 by 4.2% - to $ 531 billion, where the share of media advertising will grow to 92.6%, or $ 495 billion.

According to the research agency, in 2014 media the advertising market was divided between:

By results of 2017 the global advertising market will grow to $ 581 billion, where the media advertising market will occupy 93% or $ 541.6 billion:

That is for the years 2015-2017 the media advertising market will increase in the order of 14%.

According to the agency, top ten advertising markets include:

Indicator of economic development of safe and free media and the free economy is the accepted global norm of media advertising market volume in the country's GDP, which should be more than 1%.

Before the next world economic crisis that began in 2008, this ratio was present in almost all countries with a free economy. The balance has been broken in the subsequent years of crisis, but the fall did not exceed 50% at the end 2014. The exception is the US, where the golden ratio of 1% of GDP was achieved.

In Azerbaijan, according to the State Statistics Committee, in 2014 the total turnover of the advertising market grew by 17.9% and reached 67.3 million ($ 86.3 million).

The volume of media advertising amounted to 25.1 million manats ($ 32 million.)

As can be seen, while the global market share of advertising on the media accounted for 92%, in Azerbaijan the market of outdoor advertising exceeded the media market by 260%.

The ratio of the media advertising market of Azerbaijan and the GDP ($ 73.5 billion) was 0.034%. This is considerably less than in 2005, when the figure was 0.14%. Then, according to Turan"s research, the market volume amounted to $ 25 million at the GDP of $ 19.9 billion.

There is a real deterioration of the financial situation of the media. This situation has objective and subjective reasons. The objective can be attributed to monopolization and unbalanced development:

The next hurdle is objectively the huge layer of illegal economy, monopoly in the non-oil sector, and the weak class of small and middle-scale producers of goods and services.

Subjective reasons include deliberate economic strangulation of the media by the state by blocking the revenues from advertising. Pressure is always exerted on advertisers in order to prevent the advertising in the independent and opposition media. As a result, independent media have virtually ceased to exist as an institution.

Radio and television broadcasting, which includes 10 central TV channels, is fully controlled by the authorities, and the means coming here in the range of $ 28.9 million ensure their existence to an extent, but minor incomes severely restrain their development.

The data on the volume of print and online media ($ 1.08 million) show their commercial failure and complete independence from external funding. Minor official financing in the range of $ 3 million for about 30 newspapers followed the line of the State Support Fund for Media Development under the Azerbaijani President. But the lion's share or underwater part of the iceberg is illegal public funding that could be tens of millions of USD. In Azerbaijan there are about 250 actual print and online media. On average, each of these media gets $ 4,348 per year, or $362 per month. Of course most of them do not receive advertising and a few of them have advertising of tens of thousands per year, which is not enough for the maintenance of their huge staff and irregular salaries for one month.

As a result of the economic dependence, the media turned into a propaganda tool and do not carry anymore the function declared by the media law and the professional code of ethics of the journalist, where the key principle is Principle 1. Serving the Truth, Accuracy and Fairness.

Yet it is possible to predict that the state of the media advertising market will remain within the normal range for 10 years, because this phenomenon is political and economic. A developed media advertising market is an integral part of a free and liberal economy, which does not refer to the economy of Azerbaijan. Formation of a media advertising market meeting international standards is possible only with high economic freedom, fair and highly competitive producers of goods and services, especially small and medium-sized businesses, which are the engine of the economies of developed countries. This is not possible without the creation of a democratic system of government, one of the institutions of which is independent media. The current regime in Azerbaijan is not ready for changes and will always seek to maintain the status quo.