Italy's consumption boosts 1997 ad spends

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MILAN -- AC Nielsen in Italy predicts that ad spending will remain static over the next three years, relative to other European countries, mainly because of its under- developed retail structure and lack of product innovation.

However, executive director Domenico Ioppolo noted, at at a presentation of Nielsen's view of Italy's advertising market through 2000, that ad spending did actually rise in 1997, boosted by a drop in prices and a rise in consumption following a slowdown in spending in 1996.

Many brands are reclaiming market share with new product introductions, especially in the food area, and companies continue to seek a closer rapport with consumers. From January through August 1997, total advertising spend rose 7.2%, marked by a 9.4 % increase in TV and a 3.4% boost in print.

"Every single company invested more in 1997 than last year," said Ioppolo. "Communication with the final consumer is important, so we found the results extremely satisfying. Demand sparked the growth in ad spending."

Over the next three years, Nielsen predicts that supply will not change dramatically, while technological improvements will have moderate effects on the market. Advertising spending in newspapers in Italy is still far below the European average.

The growth in television was sparked by a 6.8% rise in prices. Growth is expected in outdoor ads, traditionally a difficult medium here and one that needs better quality and credibility.

Ioppolo also pointed to the fact that in many other countries, department stores, hardware stores and restaurants are big advertisers, "a phenomenon that has not hit here."

Copyright November 1997, Crain Communications Inc.

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