Samuel Lowenberg - Independent Journalist biography articles articles

International business ; western advertisers struggle to conquer the wild frontier; europe: the culture clash is an example of what marketing meets a post-communist country.

Los Angeles Times  June 15, 1995

Spains new socialist government has made tackling violence against women a priority. New legislation promises harsh penalties for offenders and extra training for doctors. But the countrys real achievement is recognising the importance of prevention. Samuel Loewenberg reports.

DATELINE: BUCHAREST, Romania This country is really not so poor, said Simona Goncea-Botorog, marketing manager for R.J. Reynolds Tobacco International. It's partly a case of "bad advertising."

While her assessment may be disputed by economists, not to mention Romanians, advertising is something Goncea-Botorog knows about. It was two years ago, while head of Rom-KU Advertising, that she negotiated the deal by which client RJR provided Bucharest with a year's free supply of bulbs for its traffic lights. In exchange, the yellow lights would bear the Camel cigarette logo. "It was really fantastic at night when only the yellow lights were on. You'd just see the camel everywhere, blinking on and off," said Jerry Dauteuil, managing director of Rom-KU. No country provides a more dramatic, or ironic, example of the clash produced when the American marketing machine is introduced into a post-Communist country.

Romania is still recovering from what, by 1989, had become the most brutally totalitarian regime in the Warsaw Pact since the reign of Stalin. Today Romania is one of the most socially and economically backward countries in Europe.

Until a few years ago, Romanians had no experience with either advertising or product choice. But now they are confronted daily with the techniques of Western multinationals competing for a share of the country's virtually untapped market of 23 million people.

There are about 12 agencies in Bucharest affiliated with international advertising agencies. Their clients include Coca-Cola, Procter & Gamble, Colgate-Palmolive and Daewoo, the Korean conglomerate. Their influence can be considerable.

Radu Florescu, an American of Romanian descent who manages Bates Centrade Saatchi & Saatchi, the local affiliate of the British ad giant, tells how he brought the TV soap opera "Dallas" to Romania using Kent cigarettes as a sponsor.

The show quickly became the most popular in the country. But when Florescu was suddenly informed that in order to comply with European Union standards, cigarette advertising would be forbidden, he responded with classic corporate aplomb. He told Romanian Television that if Kent could not advertise, "Dallas" would be yanked off the air. The result was a massive public outcry, and a compromise cleared the way for the Kent spots to continue.

Advertisers operate in a Wild West climate where the rules are being made on the fly. Like everything else in Romania, state-owned television can be a place of back-room deals and special favors. Though the system has been partly cleaned up and most anybody can get a commercial aired, corruption still exists when it comes to getting special time slots or rates. "We go through other people who do the greasing of palms," Dauteuil said.

Forty years of Communist dictatorship created a culture of paranoia. For example, even Westerneducated intellectuals give credence to the idea that the government had a secret "ministry of humor," which was the source, and therefore the master, of Romania's anti-government jokes. Thus even advertisements for mundane consumer products are likely to be viewed as official propaganda, said Lia Trandafir, secretary to the head of the main opposition party and a former talk show host in Romania.

Journalism is compromised in the bargain. Western advertising executives freely admit that they pay off journalists to write complimentary articles about clients. The going rate is $700 to $1,000 per article.

"If there's anything good said about anything, then it was bought and paid for," said Alana Perez, president and founder of a local partner of U.S. ad agency D'arcy Masius Benton & Bowles. Meanwhile, agencies sabotage each other by planting rumors in the media. They even take down each other's billboards. They are acting on an old Romanian aphorism, "I hope my neighbor's goat dies."

"You name it -- every dirty trick in the book," said Florescu, who has tried to start a Romanian advertising association to set standards of conduct.

The ethical picture is further complicated by the fact that many of the advertising agencies also own media companies that sell ad space. Rom-KU's sister company, Universal Media Management, is in charge of selling all the advertising space on buses and metro stations -- a deal it facilitated by helping to fix up the Bucharest bus company with tires, Dauteuil said. In the end, however, advertising may not be able to overcome the Romanian economy. For example, there is almost no system for distributing goods. Villages are often without bread, much less toothpaste. In the early days of investment, foreign companies often made the mistake of throwing their money into advertising without paying attention to how their products would actually get to the stores.

Romania has received only a tiny share of the foreign investment in Eastern Europe, though some of those companies that have risked it have had success. In 1994, Coca-Cola's sales were $120 million; Colgate-Palmolive's were $40 million. With the average monthly wage about $85 after taxes, the market is dominated by low-cost, highvolume consumables such as soft drinks, cigarettes and personal hygiene products. But for many people, even these products are still out of reach. Since 1989, wages have tumbled about 50%, unemployment has gone from zero to 10%, and inflation last year was 63%. Nearly half the population is living below the poverty level, according to official figures.

"When I look at the advertisements for Western products on TV," said Sylvia Stoica, 45, who works in a wiring factory for $3 a day, "I feel bitter because I can't afford them."

By Sam Loewenberg