Bankruptcies are postponed: outdoor advertising in Kazan ordered a deferral of payments

The loading of advertising space decreased in April to 30-40% against 50-60% in March.The authorities of Kazan once again decided to defer payments for the lease of structures

As a measure to support outdoor advertising operators, the executive committee of Kazan decided to defer half of the payment for the first quarter of this year for a year - until March 31, 2023. This was announced today in the mayor's office of Kazan by the HEAD of the outdoor advertising department of the executive committee Askar Bagautdinov. 

The authorities recorded a decrease in the occupancy of advertising structures from 50-60% in March to 30-40% in April. Bagautdinov noted that, following the results of March, due to the withdrawal and suspension of work of foreign companies, the loading of outdoor advertising space fell from 60% to 35%.

According to him, taking into account the support measures this year, Kazan's budget should receive 398 million rubles from outdoor advertising.

“Since the beginning of the year, the budget has already received 77 million rubles, including 21 million deferred payments for 2020. The previously approved schedules are generally fulfilled by market participants, the resulting debts are repaid in a short time,” Bagautdinov said. To date, accounts receivable to the budget have been fully repaid.

The head of the RIM media group, Ilya Fomin, told RBC Tatarstan that sales are expected to fall by 30-40% in April. According to him, in 2021 the share of foreign advertisers in the portfolio of placements was 25%. However, according to him, the fall of the market will be more massive. 

“The reason is that brands that are Russian are filming placements, but their advertising campaigns are subsidized by international players - manufacturers of food, household appliances, and so on. Accordingly, when these subsidies run out, brands stop placing or severely curtail the campaign. We expect that in April sales will fall by about 30-40%, and in May it will be even more, since in April, as part of our contractual obligations, we have the opportunity not to remove customer placements. In May, customers have no such obligations to us,” he said.

According to Fomin, the question also arises of the possibility of paying for those placements that were made from international brands and cannot be withdrawn. On the Russian market, they go through advertising agencies, which are reoriented from international to domestic customers.

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“The extent to which they will be able to meet their payment obligations for placements in March and April is also a big risk for the market. In the medium and long term, we see that the market will recover due to the emergence of new Russian companies and brands, the arrival of Chinese and Turkish players. But I think they will not be ready to invest in advertising the way international brands did,” Fomin said.

Bagautdinov recalled that the current quarterly payments for 2020 and 2021 were postponed to 2021 and 2022 and redistributed to monthly ones. The total amount of deferred payments amounted to RUB 145.8 million. “This allowed us to keep existing contracts and keep firms from bankruptcy,” he said. 

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