She believes an advance of the communication industry could be expected as of 2014. “For next year the realistic premise is that the market will not decline anymore. We will probably see a slight market increase in 2012 if macroeconomic indicators remain stable.”
Zoltan Szigeti (45), Mihaela Nicola (45) and Bogdan Nicola (39) founded seven years ago the group made up of 17 agencies, which had a cumulated turnover of EUR112 million last year. “The Group” is the umbrella under which the companies are gathered.
The crisis made us more responsible
According to The Group data, the communication market (which, apart from advertising, also includes PR and online marketing activities) is worth around EUR400-EUR450 million. To this add the budgets for the election campaign this year.
The biggest contribution to the communication market comes from the advertising segment. According to Media Fact Book, an analysis of the Romanian advertising market conducted by Initiative agency, part of communication group Lowe, the advertising market was worth EUR309 million last year, around 40% more than in 2008, the boom year for the Romanian economy.
But Mihaela Nicola believes the overall communication industry contracted by 5% per year in the past three years, as Romanians’ purchasing power declined.
Companies that sold products or services felt this decline in their turnovers, so they had to adjust their communication budgets.
“The crisis has made us all more responsible in how we invest, both on a professional and on a personal level.”
The Group as a whole reported turnover of EUR112 million last year, up by EUR3 million against 2010.
The Group was created seven years ago by Zoltan Szigeti, Mihaela Nicola and Bogdan Nicola. In 2005 Zoltan Szigeti and Mihaela Nicola left the Ogilvy group after running it for almost a decade, and formed The Group, which currently contains agencies Brands Talk, Pepper Communication, BT Production Group, House of Media, Innovaty Production, Media Investment, My Media Branded Content, Navidoo Media, New Media Agency, Nicola & Partners, PosterCom Media, Q Research, The Media Partnership, Touch Communication Media, Field Star, Your Promo, My Media and The Group Foundation.
Turnover rise in times of crisis
“Since 2008 our turnover has risen because we also had clients who boosted their investments in communication because they launched brand extensions or resorted to new forms of communication. We have also won 3-4 new clients each year.” In the last three years the group has only lost two clients, who had to adjust to their multinational agencies.
She believes one of the factors that contributed to the development of The Group’s portfolio was that the founders of The Group continued to act as members of the team, attend strategy meetings, write presentations for clients and go where promotional activity takes place.
“We are preoccupied in equal measure by strategic goals and by operational details and clients consider this an act of responsibility.”
The Group, an umbrella for 17 agencies, has a total of 210 employees.
This year Mihaela Nicola expects the turnover made by the agencies of the group to be comparable to the 2011 one.
“Until 2008 the double-digit annual rise recorded by the communication industry was sustainable and the budgets that clients invested in communication were rising because so did population’s consumption, there were new categories of products emerging, new investors coming. In the three years that followed, companies on the market learned the meaning of regress.”
4Q, an important period for the advertising market
Mihaela Nicola says the current quarter is very important both for the industry and for The Group because it is now that clients tend to adjust their budgets.
“There are companies which communicate only in the fourth quarter. There are also companies which cut their budgets because they did not reach their sales target, and companies that increase their budgets because they have special projects in the last few months of the year.”
(English version by Daniela Stoican)