top 10 pr agencies in Russia

Russian ministries and departments spent 5.2 billion rubles for PR and marketing in 2009, with AGT' share amounting to the greater part of the sum.

By Ksenia Boletskaya, Vedomosti, published 29.03.2010, 54 (Issue #2572)

Government agencies held 1,232 competitions for suppliers of services such as information support, advertising, event management and public opinion studies last year, spending a huge sum of 5.2 billion rubles for that, the Vizantiya communications group said after analyzing the data disclosed on the official site zakupki.gov.ru (for more details, please be advised to go to www.vedomosti.ru).

Almost half of the 5.2 billion rubles went for event organization and management. The preliminary accounts by the Association of PR Consulting Companies (ACOC) suggest that the PR market shrank 20% to $2 billion in 2009 compared with the previous year, excluding state contracts.

AGT ranks second to none in the Vizantiya rating of top 10 pr agencies in Russia. Indeed, the group won 15 tenders last year (losing some only to RIA Novosti) and earned about 256 million rubles from its deals with government agencies. The top-three list also includes Smart New Solutions with 170 million rubles and the National Communication Strategy Agency with 156.5 million rubles.

AGT, one of the top 10 pr agencies in Russia, is undoubtedly one of the largest state contractors, ACOC chairman Elena Fadeyeva sides with Vizantiya. "Most of PR agencies in Russia work with corporate clients only, and are believed to be the largest as they are much talked about," says Yulianna Slashcheva, the President of Mikhailov & Partners — one of the largest contractors in the information and people awareness segment last year. "But the turnover of communication companies that major in PR services for the government needs is much bigger."

State contracts earn AGT about 70% of its income and account for 21.5% of the turnover of the whole group, Vyacheslav Lashchevsky, the Chairman of AGT's board, explains. According to SPARK INTERFAX, the two largest company owners are Mr. Lashchevsky and Mr. Gavrilin. At the beginning the company majored in PR services for telecom clients, cooperating vastly with the Communications Ministry under then-Minister Leonid Reiman. But in 2006 the decision was made to diversify and deploy a regional network. This helped the agency attract many new clients, including the Federal Agency on Education, the Ministry of Sports, Tourism and Youth Policy, some Gazprom affiliates, Bayer, Nokia, etc.

Working with state bodies is not a priority for Smart New Solutions, Alexander Romanov, the co-owner of the Smart Communications group, says, noting that 100 million rubles earned under state contracts is what he calls cost-effective.

The government PR action plan was sort of inertial last year, because budgets were made before the crisis, Lashchevsky said, noting that PR and marketing expenses would expectedly be cut 25-30% this year, and would remain at this level in future. Mrs. Slashcheva agrees, saying that some government agencies and offices are to reduce their PR budgets 20-30% this year. "However, newly formed state-controlled organizations and agencies will start working this year, which will bring the total up," she points out. "Mikhailov & Partners earned 136 million rubles from rendering services to the government, which equaled 40% of the total revenues (own data). Agencies that win state contracts more often have this share at about 70-80%," she maintained.

Who spends most?

Vizantiya's survey indicates that the largest government spenders for PR and marketing in Russia are the Ministry of Culture (almost 1 billion rubles in 2009), the Healthcare and Social Development Ministry (623 million rubles) and the Pension Fund (514 million rubles).