Interview with Rolands Puhovs, Managing Director of Not Perfect Riga
While Latvian economy grows, big brands are decreasing their marketing budgets. Digital marketing is on the rise, but creatives are still learning the ways how to tell stories on digital platforms. Pan-Baltic campaigns are often blocked by the big egos of the local “kings” who want to keep full control.
What’s new in Latvian advertising market compared to the previous year?
We can clearly feel the economy growing. Companies that were previously lacking sufficient budgets are now considering spending more. However, the biggest brands are gradually decreasing their budgets. They are currently testing different strategies. Cutting their budgets and observing the outcome.
Historically SMEs have always been very cautious with their marketing spending. What about taking creative risks?
SME’s are spending their hard-earned money and want to be really involved in the creative process.
As for taking risks, brave brands are a rare species. It depends on a single person making decisions at the company. Whenever the marketing team changes, the willingness to risk diminishes. Marketing always involves goals and numbers. It’s serves as proof of job well-done for the upper management. Risks can never guarantee you these numbers.
Making TV ads has always been the best source of revenue for the agencies.
Is this trend starting to change?
The importance of TV ads is going down. Investments in digital are growing and the legislation issues in alcohol advertising are pushing huge companies to other marketing channels. TV commercials are no longer the biggest projects. On the other hand, we still do a lot of filming because we work with three telco brands and they’re constantly running ads on TV.
You have strong agencies in Riga and Vilnius. This provides an opportunity for universal solutions, creating campaigns on a pan-Baltic level. Is it something that clients are finally considering?
Undoubtedly, this is one of our advantages. We have a great cooperation across all three countries (we also have a partner agency in Tallinn). We have experience in pan-Baltic campaigns. For example, Danone pops into mind straight away or Volkswagen. Brands who are active in all three countries are constantly thinking about unifying concepts. But local marketing teams are always keener on working with local agencies, which takes away from the initial rationalisation. They argue that the local agency has a better view of their home market. Surely there are differences between the Baltic states, but not anything significant. I find it irrational. It used to be about egos, and it still is.
Does it mean that it’s difficult for an agency to get clients from other countries?
It’s all about relationships and networking. I can’t even think of any Latvian agencies who’ve succeeded in getting clients from abroad. I’m not saying it isn’t possible, especially in a hyper-connected world like ours.
We’re currently working with a telco brand in Belarus. Everyday tasks are discussed over Skype or email. Two years ago, our client was a huge bank in Kazakhstan, which is even further than Belarus in terms of time zones. However, Baltic agencies are finding it hard to win Western clients. For Western clients, we’re still a region, where people are sitting on trees and eating bananas.
What are the trends for upcoming years that agencies should now be considering? What are the areas you want to improve?
This might sound vague, but definitely digital; digital on a larger scale. We’re using terms like ‘digital campaign’, but we don’t even know what it is. I’m always puzzled, when a client asks me to do a digital campaign. What do you mean by that? In the end, it turns out to be a landing page and a couple of web banners. I have yet to meet a local agency who could give me a precise answer on what to do with the internet.
I believe it has a lot to do with mind-set. Creatives are used to thinking about the story and converting it into an image (be it a poster or a movie). It’s sometimes still difficult for them to do storytelling on the web. Their approach is very traditional.
In theory, we’re all experts. But execution proves otherwise…
Giving advice to the clients, what are the areas they should educate themselves in?
Focus group research seems to be a bit of an issue. It essentially means gathering and working with data; translating data to stories. Research is vital if you want to reach your goals, but tends to happen rarely these days. We tend to question our audience after the campaign has passed, instead of doing it prior. Getting real and honest answers about your business could escalate the results significantly. Big companies are prone to developing a superiority complex – losing the connection with their clients. And it’s the agencies’ job to bring them back on earth.
Links to the works of Not Perfect Riga:
Tele2 Johnny, mobile home Internet
Tele2 Eddie, mobile home Internet
Zelta Zivitina, post-paid payment plan
velcom, low-cost smartphones
velcom, largest 3G network
Interviewed by Hando Sinisalu, Best Marketing International
The fourth pan-Baltic advertising festival Balticbest will bring together marketing managers and agency people in Tallinn, Estonia on August 30, 2017. Come to participate: www.balticbest.eu