You're reading: AGB may have to compete to maintain its business

During the Ukrainian advertising market’s formative years following the country’s independence, several small firms provided rudimentary television program ratings and audience information.

Then, three years ago, Ukraine’s broadcasters and advertising agencies felt the need for a single impartial source for comprehensive and up-to-date ratings that could be used by the industry. The advertisers held a tender and enticed AGB Ukraine to establish a modern, Western-style rating service.

Using a type of collusion, the advertising industry agreed to support AGB by buying the ratings information generated by the firm. Broadcasters and advertisers use rating information to negotiate ad rates and identify audiences.

Now, industry sources say AGB’s days as an industry-supported monopoly may be numbered. They want to hold a new tender and possibly attract a different rating firm.

Agencies are reportedly unhappy with AGB’s pricing policies and want expanded services.

The D’Arcy advertising agency headed an initiative last month to conduct a new tender to select a rating service. The winner would ostensibly receive the industry’s business. D’Arcy is a major full-service firm whose clients include Proctor & Gamble, Mars, Coca-Cola and Chornomor beer, all companies with big TV ad budgets. Other firms involved with the initiative include Adventa, Provid/BBDO and television channels Studio 1+1 (represented by the Video International advertising agency), Inter and Novy channels.

The firms have formed the United Advertising Committee, which will conduct the tender.

Although the committee has been looking at the issue for three months, AGB Ukraine, which stands to lose substantial business if a new firm comes to the market, says it is unaware of any interest in holding a tender.

“There has been no tender announced yet,” Dmytro Dutchyn, the executive director of AGB Ukraine said. “But if a legal committee authorized to run a tender is created, we will participate in it.”

If AGB is unaware of the situation, likely competitor Taylor Nelson Sofres Socis Gallup is not. Socis says it is preparing for the as-yet-unreleased tender.

“We are seriously preparing for the tender,” Natalia Hasanenko, head of Socis’ media research department confirmed.

Hasanenko wouldn’t say exactly how the firm is preparing, though.

“We cannot reveal our secrets,” she said. “However we do have some interesting proposals relating to the cost, equipment and number of people we can monitor.”

Plans are for the United Advertising Committee to continue an active role after the tender is concluded. Instead of companies buying information from the rating service, the committee will act as a clearinghouse, collecting payments and disseminating information.

AGB Ukraine, is a joint venture of Consulting Ukraine and AGB Italia. It was the first rating firm to use “people meter” devices to collect information relating to what viewers watched and for how long.