Official tariffs of the metro to rent advertising spaces differ from the market’s ones by several dozen times. For example, according to official metro pricelist the rent of 1 square meter inside of a train costs 51 hryvnyas, lightbox – 40 hrn, poster – 35 hrn, lobby door stickers - 25 hrn per month. Advertisers’ pricelist per month: citylight $250-350, advertisement on escalator arches and rail track walls costs $350-700, on a backlight up to $800-1000. Of course, a flexible discount system does exist allowing to save, depending on order volume and term, up to 35-50% and more. However, the majority of advertising agencies do not earn much on such difference.

There are several agencies only having direct contract with the metro. All other companies are acting on subcontractors’ basis. “The metro is not coming into direct agreements anymore, sending all interested parties to the general contractors. It doesn’t mean, however, that this is impossible to sign an agreement with the metro. It is possible, but based on special conditions of cooperation meaning that prices on renting advertising space are very different from those, officially announced by the metro” – says Oleg Sakhno, Head of “Image-Service” advertising department.

Increase in metro advertising prices used to happen gradually before, and according to market participants, was caused by general inflation process. “In September – October the operators raised prices by 10% for rail track walls, escalator arches, and backlights” – says Director of advertising agency “Trans-Media” Vitaly Yevseyev. And as Mr. Sakhno has added, in November the prices, tied to US dollar, also went higher due to increase in exchange rate.

It used to be thought that a normal media inflation process could not make such influence on market. However, if to take into consideration progressing reduction of advertising budgets by major players, the position of advertisers to hold them at any price, becomes obvious. At the same time the market participants point to advertising activity decrease by 25-30%. “Indeed, the advertisements got smaller. One can observe empty spaces inside the wagons, what was very rare not a long time ago. Trying to hold clients, the companies propose various discounts and bonuses. To name just a few, we give two weeks for free in January on certain spaces in metro wagons to our regular customers – says Mr. Yevseyev. If the prices will be truly raised by 300% (what was recently announced by the head of “Kiev Metropolitan” Petr Miroshnikov) then a question about business profitability will be raised. That’s why, even not taking crisis into consideration, the advertisers face to raise prices.”

One can not make right judgments based on November-December results as these are traditionally New Year eve’s advertising active months with mostly predefined budgets. The transportation business did not decide yet upon pricelist currency for the next year. However, according to Vitaly Yevseyev, many agencies have already fixed their prices in hryvnya, refusing the unpredictable dollar.

Even without any price increase the market is getting ready to losses. “Real problems will begin in January-February – states Oleg Sakhno. And if metro management truly increases the tariffs by 4 times, for several operators it might turn into crash.

Artem Vakalyuk, eizvestia.com