— I was studying Russian and Spanish at university. I wanted to go into banking but someone I know, who was working as a senior manager at one of the world’s biggest international advertising agencies called me from Russia. He himself couldn’t speak a word of Russian. So he invited me to join his team.
After an interview by Skype, I arrived in Moscow at the age of 23, intent on building a career.
In Russia, I experienced an overwhelmingly uplifting feeling, a kind of pleasing, positive energy. My salary wasn’t much: about 20,000 roubles. My room cost 10,000, and I just about managed to get by on the rest of it.
Every day brought something unexpected. It was a surprise to me that when I was in a café and I asked them to bring me something that wasn’t on the menu, like butter, I always heard the same “No”. And it was only after the third time of asking, having got the manager involved, that I got my butter. But, before then, I had been refused three times. People in Russia are used to keeping up a certain way of behaving, staying in a certain mode and, to break through this barrier requires you to stand up for yourself.
But then, at the same time, it was when I was in Russia that I was first able to manage my finances on an iPhone, buying a plane ticket, in particular. You could only do this in England six months later.
I am still struck by the breadth of the Russian soul. Russians are very hospitable; they are interested in everything. I, for my part, love attention, I’m a real extrovert.
John Mark Fitzpatrick was born in September 1982. After secondary school he studied at the University of Bristol, one of the oldest and most prestigious universities in England, where he graduated specializing in language and culture.
In 2006, John Mark came to Russia. And started work at one of the world’s largest international advertising agencies BBDO.
In 2011, John Mark Fitzpatrick, along with his Russian partners Viktor Sokolov and Denis Lapshinov, registered their own company SLAVA in Moscow, continuing their work in the advertising business. He has been the Managing Director ever since.
— What difficulties were there in the early stages of living and working in Moscow?
— Although I had been learning Russian for 6 years, I didn’t speak it well enough. Which meant that I couldn’t get a proper sense of people or of the Russian culture. So I steadfastly kept on learning it. I asked colleagues and acquaintances to speak to me only in Russian as, at the time, my colleagues wanted to practice their English with me. I even developed something of a complex: it seemed to me that if someone started talking to me in English that it meant that my Russian wasn’t good enough…
At the large advertising company, I had a regular client: Procter & Gamble. From the point of view of marketing, it was, of course, a very good training-ground.
— Why did you decide to leave the company and set up your own agency?
— After work, we often used to socialize with one of the partners, Viktor, a creative. And we were of the same opinion that we would be able to do bolder work if it weren’t for certain restraints. These conversations went on for about six months. And there came a point when we realised that something needed to change, and we decided to set up our own agency. I became the Managing Director, and my partner Viktor Sokolov the Creative Director, with responsibility for the product.
In terms of the development level of its advertising services market, Moscow is in no way behind European and global capitals insofar as it is a multi-million-strong city, and the economic and cultural centre of Russia. Indeed, Moscow, in its own way, is Russia’s engine.
By various estimations, the overall size of the advertising market in the Moscow region at the present time, allowing for periodic fluctuations in macroeconomic conditions, is between $20-30bn a year, and is on a steady upward curve.
The cost of entering this market in Moscow depends on the ambitions set by those establishing the agency. As well as on how available the means are for fulfilling those ambitions. By means, one should understand not only money but also “human capital” (professional know-how and experience of the highest level, like-minded professionals, and so on). I can cite ourselves as an example. When we set up our advertising agency GRAD M in 2004, we, as a group of like-minded professionals set ourselves the objective of creating a full-service agency. Which would specialize in the messages given out by a business to its target market, and in attracting new customers, and in increasing the loyalty of current clients of a given business, whatever area it might be engaged in. Our budget for starting an advertising agency was around $30,000. The bulk of the outlay went on designing a website and advertising it on the net, as well as on renting premises, buying office equipment… As of today, GRAD M is worth in the region of $1m. Its value has grown by more than 30 times, which, we like to think, is no bad figure at all.
It only remains to be said that today, too, the advertising market in Moscow is enjoying steady growth. On average, by various calculations, it is “gathering in” 12 to 20% per year. Moscow’s economy is expanding and, with it, this market is expanding too.
Advertising, they say, is the engine of commerce (of business). And that is true. But also, business, in turn, is the engine of advertising!
One last thing. Why is it Moscow that is the most attractive market for our business? Well, because Moscow represents approximately 80% of the whole of the economy of Russia.
— Was it difficult starting your own company in Moscow?
— No. I did it myself. It was important to me to go through all the stages myself. I had to get together a large number of papers. It was a fairly lengthy process. I spent three months doing it. If you pay an agency that specializes in it, then the process can be done several times faster.
That’s how our agency was born. The name was thought up by Denis Lapshinov, my second partner. It is to do with the motivation of our colleagues and clients. Every one of the creatives wants recognition. The same goes for our clients.
— How did you recruit the necessary people?
— Part of the team from my former agency left with us. For six months we worked as a four. This set-up was sufficient to service the first client. Now there are over 20 people working for us.
From the very start, we laid an especial emphasis on the quality of the work. Our first promos became adverts for us in their own way: our calling card.
One of our first jobs was the promo “Paratroopers are Reading Pasternak”, which, in just the first week, got over 200,000 views on the net (!). We knew that every year on the 2nd of August in Gorky Park the paratroopers celebrate their commemorative holiday. They have a few drinks and splash about in the fountain. In the meantime, the open-air book fair “Bookmarket” was supposed to have moved on after a couple of weeks. The park in those days wasn’t as developed as it is now. There was reconstruction going on: everything was being improved and finished off. We came up with the slogan: “Culture returns to the Park of Culture”. Our paratroopers were reading the Pasternak poem: “In everything I want to reach…”
The promo was covered extensively on the radio station Mayak, and Viktor Sokolov was invited onto the TV station Dozhd (Rain TV) to tell them how the film was made. Everybody really liked the product. And straight afterwards, three creatives approached us and asked: “Can we come and work for you?”
But overall the hardest thing in our business is recruiting people. We need talented people to work with who can come up with good ideas and know how to think in an interesting way, who can bring something new to every project.
Statistics say that 90% of small companies, startups, are not very successful. Many of them fold after the first year. Which is why even our job applicants had a certain lack of belief which we had to contend with.
— How much are your employees paid?
— Assistants (those who are just starting with us) are paid from 40,000 roubles. But if an employee gets a result, their salary can be much higher.
— Was it hard finding a place for the office?
— Surprisingly so, but in Russia, what is important for employees is not just how much they are getting paid but also where they happen to work. In England, for example, the location of the office for workers is not of fundamental importance. Therefore, we made a concerted effort to find premises in the centre of Moscow. And we only found them after three months. It’s a very old detached house on Vlasevsky Lane, next to the Arbat, which was built in 1903. Here, so the story goes, lived Bulgakov’s heroine, the enigmatic and fateful Margarita. It is also known that in the house’s Blue Hall danced Isadora Duncan herself. We cleared out all the bits and pieces, carried out repairs, and put in a new parquet floor. We ordered a big table made from a single piece of wood.
The Russian advertising market is comparatively young, but it is already structured, and has no significant differences from Western ones. Players of different sizes are present in it: major communication holdings, both online and local, communications marketing agencies, mediasailers, media, creative and digital companies, design studios and so on. Today most companies in all fields of business have their own advertising departments. Resources representing freelancers also exist. The state of the market may change somewhat because major mediasailers have combined. MOVIE is one of the communication groups which has adopted Western quality standards. Furthermore, as a local agency, it can offer the client a personal approach.
Undoubtedly the advertising market of each country has its own specific features, dictated by its mental attitude and the way the media are used. The Moscow market is projected onto the whole of Russia. For example, television advertising continues to be the favourite in Russia. Unlike America, the print media are not in such great demand here. Cannes Lions 2016 clearly reflects the national “creative activity”, from which it is apparent that Brazil is considerably more ready for creative content than, for example, Ecuador.
The cost of entering the advertising market in Russia depends on what field the agency operates in, but is roughly from 20 to 50 million roubles. A creative agency can exist for some time as a startup consisting of two or three top class professionals working from a “home” office. But to build a long-term business, development is essential. It is important to remember that the creative input in this field is not just the idea, but also its subsequent implementation and sale. And this requires a team of 10-15 people. If we consider media agencies, it is important to note that this is a personalized business, needing a team of professionals with considerable experience, a contact base and established relations with suppliers; media planners who know the media and buying conditions, and are familiar with all the media and also means of communication such as TV, digital, radio, out-of-home, press and so on; strategists, accountants and back office specialists. In planning the budget, it is important to allow for the cost of rent, expenses on procuring equipment and licensed software, subscriptions to specialized sources of information, TNS and everyday office needs.
Digital, online video and cellphone advertising – this is absolutely the market trend. These forms of advertising stood out as the most rapidly growing as long ago as 2013. Today, the growth forecast for 2016 is up to 18%. Traditional advertising is not disappearing, but its percentage share is falling considerably. However, the future undoubtedly lies with the personal content of the brand. A knowledge of the target audience is the key to success.
— And how much is the rent for this office “with history”?
— For 150 square metres we pay 300,000 a month. I consider that to be quite a lot of money. But, on the other hand, it is right in the centre of Moscow. Image has a lot to do with it.
As for a flat, I rent a “two-roomer” near Novokuznetskaya metro station. My “Stalinist” building is not far from the iconic “House on the Embankment”. Before, I was paying 65,000 roubles a month for a two-room apartment, but then I told my landlord that I wanted to substantially reduce my costs. He thought about it for a day and then said: “Alright, pay me 50”.
— Did you find your place in the market straight away?
— As regards the creative advertising market, there are big players in it: networks of agencies and independents, as well as media agencies. The network agencies are part of a large group with the head offices located in either Europe or America. And these agencies have the exclusive contractual right to work with certain clients. So, we first look at who we can’t work with, and only then we know that we can try to arrange cooperation with this company and that one.
At the same time, there are companies who think that global contracts don’t work when it comes to original and creative work. We definitely try to work with those kinds of companies.
— So the competition is stiff?
— There are 4–5 independent creative agencies of our level who we sometimes compete with. But on the whole we compete for various tenders with the big agencies.
— When creating a product, do you factor in the local mentality?
— Which work are you particularly proud of?
— The projects we did for Google. in 2013, we shot a large-scale TV campaign for them. Two promos on the theme “Get Reading”. One of them was “Chekhov Lives”. We were largely trying to appeal to young people. In Chekhov there are a large number of characters you could meet even today. We came up with an online test where you could answer a few questions and find out which of Chekhov’s characters you were most like. And you could read there an extract from the text about the character, read it out on camera, upload it to social media and take part in a casting in order to participate in an online recital which went on continuously for 36 hours.
— If a client asked you to bring to life an idea, but it goes against your moral principles, would you take it on?
— We have never taken on tobacco advertising. Even though I think that everybody has the choice whether to smoke or not.
— Your company is “in the black”?
— This is the second year now that we have been “in the black”. In 2014, our turnover was 200 million roubles. And it has stayed at that. We want to increase it but we haven’t been able to as yet due to the crisis.
— You have now been in Russia for 10 years. Have Russians changed in that time?
— Before, Russians looked more to the West for inspiration or fashion trends. But now they have become patriotic to a greater extent. Here people are more emotionally involved in their country and try to change things around them.
— Is it worthwhile now for foreigners to go to Russia to start a business?
— If you can overcome the language barrier, then I would, of course, advise going to Russia. If there is something you can do here to a good standard, you can earn decent money.
There are a lot of talented people in Russia in technology; a lot of excellent programmers. One of the areas with prospects is developments in virtual reality. That is games, films, series, TV broadcasts, various kinds of entertainment which aim to immerse the viewer in a virtual world and make them a participant in the events on the screen. That is the future.
Of interest to foreigners might be the banking sector. You could invent something in financial technology, maybe open a new kind of bank which hasn’t existed before.
— Do you find Moscow to be an expensive city?
— It can appear to be expensive to the tourist. If you go to restaurants and live in hotels. But if you buy food from the supermarket and rent a place to live in the suburbs, then you can live in Moscow reasonably cheaply.
— What do you have planned for the future?
— We would like to open another couple of offices in other countries. I, for example, am tending towards Iran. My Russian colleagues are looking into The Netherlands. But I don’t think that that is a particularly sound idea from a business point of view. The advertising market there is pretty saturated. In England we have a saying: “Better to be a big fish in a small pond rather than a small fish in a big sea…”.