When Yury Luzhkov is being chauffeured through the city, he doesn't like what he sees.
The unprecedented explosion of banner ads and billboards across the capital brings the city hundreds of millions of rubles per year. But it also elicits biblically-inspired derision from the long-serving mayor, who has equated the ad-pocked landscape with that of Gomorrah, a city destroyed along with Sodom for its wickedness and depravity.
For many of the roughly 200 companies vying for a slice of the capital's $150 million per year outdoor ad market, Luzhkov has a point -- there is an element of wickedness in the air.
The murder and attempted murder of two top executives at rival ad agencies this year underscored what many already knew: The sector continues to be one of the least transparent and most unregulated in the economy, making it fertile ground for criminal harvesting.
In June, Maxim Tkachyov, chairman of the board of News Outdoor Russia, a Rupert Murdoch company, was shot in the chest as he entered his office. Just a few months earlier, Vladimir Kanevsky, the head of rival agency Ator, was gunned down in his Mercedes while idling at a downtown traffic light.
Between them, News Outdoor and Ator control roughly one-third of the market, with the rest belonging to a slew of agencies, the biggest of which are 22 Vek (22nd Century), Anko and Vera & Olimp, according to trends monitor Espar Analitik.
Tkachyov is recovering from his injuries and could not be reached for comment. But in a recent interview published in the magazine Outdoor Media, he said he had no doubt the attempt on his life was related to his work.
Tkachyov said that "gray areas" in the economy appear when "there are no clear regulations of a resource," which in this case is billboard space. Without healthy competition, he said, these gray areas become "magnets" for criminals elements. "What happened to me is tied to [News Outdoor's] entry into one of these gray areas," he said.
The attempt on Tkachyov's life, and Kanevsky's murder, have not gone unnoticed by City Hall, albeit with some major prodding.
In a move applauded by the majority of market players, Luzhkov last month sacked the official who had been in charge of overseeing the industry, Alexander Muzykantsky -- but not before calls to action from City Duma deputies, the Union of Professionals and even Murdoch himself, who complained of the situation in a letter to President Vladimir Putin.
Muzykantsky, who remains city minister for information and communication, was replaced by Deputy Mayor Pyotr Aksyonov, who remains in charge of municipal infrastructure.
Ad agencies are hesitant to publicly comment on City Hall's performance and role in the market, an odd custom for companies who specialize in publicity. The reticence, however, apparently goes both ways, as a week's worth of inquiries to City Hall were met with delay and subterfuge, leaving it unclear what course of action Aksyonov will pursue in his new duties.
In one of his few public comments since assuming his new duties, Aksyonov admitted to Interfax that the industry was new to him and that, after taking some time to study the market, he would "improve what could be improved to bring more revenues ... to the city budget."
While Askyonov's public remarks may have been less than inspiring, agencies appear to be confident that City Hall is serious about cleaning up the market -- and working more closely with them to make that happen.
"Both sides -- outdoor advertising agencies and the city government -- are interested in regulating the market better," said Ator deputy director Alexander Shcherbakov. To do that, he said, agencies "need an ongoing dialogue with the Moscow government, not a monologue."
Aksyonov's appointment was "logical," because agencies have to work with departments subordinate to him when applying for permission to erect new billboards, said News Outdoor general director Sergei Zheleznyak. "The area that Muzykantsky was responsible for did not cross the area we had to deal with when cooperating with city technical services and organizations," he said.
City Hall charges between $200 and $500 per month for using space under billboards and above streets -- charges that brought the city about $30 million last year.
For companies, renting billboards can cost anywhere from $500 to $3,000 per month, depending on location, said Natalya Syomina, chief editor at Industriya Reklamy magazine. As for banner ads, a 10-day booking usually runs from $1,800 to $2,600, said a spokesman for Mosgorreklama, an agency specializing in banners.
With so much money at stake and so many agencies pursuing the market leaders, the next stage is tighter regulation and the inevitable consolidation that will follow, observers say.
"A big city like Moscow can't further develop its outdoor advertising market with more than 200 operators in it," said Vladimir Yevstafyev, president of the Russian Association of Advertising Agencies. "But how fast these changes happen depends on the person overseeing and strategically managing the market," he said.
News Outdoor's Tkachyov says self-regulation is essential if further bloodshed is to be avoided.
"Three, four or seven people [need to] sit down at a table together and say: 'Yes, we do have contradictions and we compete against each other, but we also have common interests,'" said Tkachyov.
"In my opinion, the biggest issue today is how open the system of making decisions is," he said. "Openness regarding the algorithm used in making decisions is not typical of our culture. It's not even the quality of the authorities; it's typical of the whole society, including business -- the lack of publicity and transparency."
The unprecedented explosion of banner ads and billboards across the capital brings the city hundreds of millions of rubles per year. But it also elicits biblically-inspired derision from the long-serving mayor, who has equated the ad-pocked landscape with that of Gomorrah, a city destroyed along with Sodom for its wickedness and depravity.
For many of the roughly 200 companies vying for a slice of the capital's $150 million per year outdoor ad market, Luzhkov has a point -- there is an element of wickedness in the air.
The murder and attempted murder of two top executives at rival ad agencies this year underscored what many already knew: The sector continues to be one of the least transparent and most unregulated in the economy, making it fertile ground for criminal harvesting.
In June, Maxim Tkachyov, chairman of the board of News Outdoor Russia, a Rupert Murdoch company, was shot in the chest as he entered his office. Just a few months earlier, Vladimir Kanevsky, the head of rival agency Ator, was gunned down in his Mercedes while idling at a downtown traffic light.
Between them, News Outdoor and Ator control roughly one-third of the market, with the rest belonging to a slew of agencies, the biggest of which are 22 Vek (22nd Century), Anko and Vera & Olimp, according to trends monitor Espar Analitik.
Tkachyov is recovering from his injuries and could not be reached for comment. But in a recent interview published in the magazine Outdoor Media, he said he had no doubt the attempt on his life was related to his work.
Tkachyov said that "gray areas" in the economy appear when "there are no clear regulations of a resource," which in this case is billboard space. Without healthy competition, he said, these gray areas become "magnets" for criminals elements. "What happened to me is tied to [News Outdoor's] entry into one of these gray areas," he said.
The attempt on Tkachyov's life, and Kanevsky's murder, have not gone unnoticed by City Hall, albeit with some major prodding.
In a move applauded by the majority of market players, Luzhkov last month sacked the official who had been in charge of overseeing the industry, Alexander Muzykantsky -- but not before calls to action from City Duma deputies, the Union of Professionals and even Murdoch himself, who complained of the situation in a letter to President Vladimir Putin.
Muzykantsky, who remains city minister for information and communication, was replaced by Deputy Mayor Pyotr Aksyonov, who remains in charge of municipal infrastructure.
Ad agencies are hesitant to publicly comment on City Hall's performance and role in the market, an odd custom for companies who specialize in publicity. The reticence, however, apparently goes both ways, as a week's worth of inquiries to City Hall were met with delay and subterfuge, leaving it unclear what course of action Aksyonov will pursue in his new duties.
In one of his few public comments since assuming his new duties, Aksyonov admitted to Interfax that the industry was new to him and that, after taking some time to study the market, he would "improve what could be improved to bring more revenues ... to the city budget."
While Askyonov's public remarks may have been less than inspiring, agencies appear to be confident that City Hall is serious about cleaning up the market -- and working more closely with them to make that happen.
"Both sides -- outdoor advertising agencies and the city government -- are interested in regulating the market better," said Ator deputy director Alexander Shcherbakov. To do that, he said, agencies "need an ongoing dialogue with the Moscow government, not a monologue."
Aksyonov's appointment was "logical," because agencies have to work with departments subordinate to him when applying for permission to erect new billboards, said News Outdoor general director Sergei Zheleznyak. "The area that Muzykantsky was responsible for did not cross the area we had to deal with when cooperating with city technical services and organizations," he said.
City Hall charges between $200 and $500 per month for using space under billboards and above streets -- charges that brought the city about $30 million last year.
For companies, renting billboards can cost anywhere from $500 to $3,000 per month, depending on location, said Natalya Syomina, chief editor at Industriya Reklamy magazine. As for banner ads, a 10-day booking usually runs from $1,800 to $2,600, said a spokesman for Mosgorreklama, an agency specializing in banners.
With so much money at stake and so many agencies pursuing the market leaders, the next stage is tighter regulation and the inevitable consolidation that will follow, observers say.
"A big city like Moscow can't further develop its outdoor advertising market with more than 200 operators in it," said Vladimir Yevstafyev, president of the Russian Association of Advertising Agencies. "But how fast these changes happen depends on the person overseeing and strategically managing the market," he said.
News Outdoor's Tkachyov says self-regulation is essential if further bloodshed is to be avoided.
"Three, four or seven people [need to] sit down at a table together and say: 'Yes, we do have contradictions and we compete against each other, but we also have common interests,'" said Tkachyov.
"In my opinion, the biggest issue today is how open the system of making decisions is," he said. "Openness regarding the algorithm used in making decisions is not typical of our culture. It's not even the quality of the authorities; it's typical of the whole society, including business -- the lack of publicity and transparency."