Financial Sustainability and Advertisement Revenues of the

Georgian Media

Mathias HuterTransparency International Georgia

Why advertising matters

• The only way to support an independent, pluralistic media market

• The market aspect: Ads create incentives to reach larger audiences• Best case: Improvement in quality, journalistic

competition• Revenues allow media to invest

• Lack of financial sustainability leads to editorial interference and the media being used as a tool by politicians

Overview

Decrease in ad revenue before elections

• Total reported ad revenues of broadcasters 2011: GEL 72.4 million• Total advertising revenues (including sponsorship and

teleshopping) of major TV channels fell by 1.5% in first 8 months of 2012• GEL 36.2 mln (01-08/11)• GEL 35.7 mln (01-08/12)

• Rustavi: Decrease of ad revenue GEL 13.77 mln (GEL 16.36 mln) – Sponsorship increased by more than 70% to GEL 2.2 million

• Imedi: Stable, from GEL 15.2 (2011) to GEL 15.7 mln (2012)• Maestro: +500%

• GEL 152,107 in 01-08/11 • GEL 1,010,110 in 01-08/12

• TV9: GEL 176,085

Estimated net advertising market (2010)

Medium Net ad-spend USD

Newspapers & magazines 3.5 to 4.5 million

TV* 35 million

Radio* 2.2 million

Outdoor 2 to 4 million

Online 0.5 to 1 million

Total 43 to 46.5 million

* Exact data provided by GNCCEstimate by TI Georgia, based on 2010 data from the Georgian National Communications Commission, the Georgian Public Broadcaster, and 2009 data from ZenithOptimedia/AGB Nielsen (exchange rate: GEL 1 = USD 0.566)

Distribution of gross advertising expenditure (2009)

Observations

• Before elections: some self-censorship by advertisers. This no longer seems to be a problem

• Limited capacity in media outlets to market themselves. Trainings are trying to address that

• High market concentration, political ownership. Changes are likely.