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Development of Media Planning in a Developing Country: Turkey

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Title:
Development of Media Planning in a Developing Country: Turkey
Creator:
EMIR, ASKIN ( Author, Primary )
Copyright Date:
2008

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Advertising agencies ( jstor )
Advertising expenditures ( jstor )
Advertising research ( jstor )
Broadcasting ( jstor )
Marketing ( jstor )
News content ( jstor )
Newspapers ( jstor )
Prices ( jstor )
Radio ( jstor )
Radio commercials ( jstor )

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University of Florida
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University of Florida
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Copyright Askin Emir. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Embargo Date:
5/31/2015
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670351661 ( OCLC )

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DEVELOPMENT OF MEDIA PLANNING IN A DEVELOPING COUNTRY: TURKEY By ASKIN EMIR A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLOR IDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ADVERTISING UNIVERSITY OF FLORIDA 2005

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Copyright 2005 by Askin Emir

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To my husband, Akin Emir

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ACKNOWLEDGMENTS I wish to express my deep appreciation to my supervisory committee chair (Dr. Joseph R. Pisani) for his guidance, encouragement, and unrelenting support. I also thank my committee members (Dr. Marilyn S. Roberts and Dr. Chang-Hoan Cho) for their feedback and support. I would like to express my gratitude and appreciation to the seven CEOs who took part in this study, and shared their experiences and knowledge with me. I would also like to express my gratitude to my friends Jaime Jasser, Burcin Unel, and Kevin Christensen for their assistance and company. I would also like to thank my parents, as well as my sisters, for their support throughout my academic experience. Last but not least, I am grateful to my husband for his support and encouragement. iv

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TABLE OF CONTENTS page ACKNOWLEDGMENTS.................................................................................................iv LIST OF TABLES............................................................................................................vii LIST OF FIGURES.........................................................................................................viii ABSTRACT.......................................................................................................................ix CHAPTER 1 INTRODUCTION........................................................................................................1 Purpose of the Study.....................................................................................................2 Rationale of the Study..................................................................................................2 Research Overview.......................................................................................................5 2 LITERATURE REVIEW.............................................................................................6 History of Advertising in Turkey.................................................................................6 Newspaper....................................................................................................................6 Second Constitutional Government.......................................................................9 The Republican Regime......................................................................................10 World War II.......................................................................................................11 A Coup for Every Decade...................................................................................11 Radio...........................................................................................................................15 Television...................................................................................................................20 History of Advertising Agencies in Turkey................................................................26 Brief Review of Turkish Economy.............................................................................33 3 METHODOLOGY.....................................................................................................40 Research Design and Method.....................................................................................40 Data Analysis Method................................................................................................43 Research Questions.....................................................................................................43 4 FINDINGS..................................................................................................................46 Theme 1: Media Planning-Overview..........................................................................46 v

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Is It an Advantage?..............................................................................................48 Are Those Agencies “Stable”?............................................................................49 Media Planning Function....................................................................................51 Importance of Media Planning Agencies............................................................52 Structure of Media Agencies...............................................................................54 Relationship Between Media Planning and Creative Agencies..........................56 Usage of Media Tools.........................................................................................56 Research..............................................................................................................58 Problems with Research......................................................................................61 Theme: 2 Economic and Political Facts.....................................................................62 Economy..............................................................................................................62 Advertising Expenditures....................................................................................64 European Union...................................................................................................67 Theme 3: Problems and Outlook................................................................................69 Problems that Sector is Facing............................................................................69 Clients..................................................................................................................69 Research..............................................................................................................71 Expenditures........................................................................................................71 Media...................................................................................................................72 Competition.........................................................................................................72 Future of Media Planning Agencies....................................................................73 5 DISCUSSION AND CONCLUSION........................................................................76 Characteristics of Media Planning in Turkey.............................................................76 Limitations..................................................................................................................81 Future Research..........................................................................................................81 Conclusion..................................................................................................................81 APPENDIX A CONSENT FORM......................................................................................................84 B ADVERTISING REGULATIONS............................................................................86 C TURKEY’S MEMBERSHIPS...................................................................................87 LIST OF REFERENCES...................................................................................................88 BIOGRAPHICAL SKETCH.............................................................................................92 vi

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LIST OF TABLES Table page 2-1. Literacy in Turkey......................................................................................................11 2-2. Advertising Revenues.................................................................................................12 3-1. Media Agencies in Turkey.........................................................................................41 4-1. Usage of Media Tools.................................................................................................57 4-2. Media Software Usage by Foreign Partners and Local Agencies..............................57 4-4. January and June 2004Advertising Spending by Media..........................................65 4-5. Annual Advertising Spending by Media....................................................................66 4-6. Advertising Expenditures for Some Countries...........................................................66 4-7. Advertising Spending by Agency in Turkey..............................................................67 vii

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LIST OF FIGURES Figure page 2-1. Newspapers in Turkey................................................................................................14 2-2. Newspaper Ownership in Turkey...............................................................................15 2-3. Radio Stations in Turkey............................................................................................19 2-4. Radio Ownership........................................................................................................21 2-5. Television Channels in Turkey...................................................................................25 2-6. TV Ownership in Turkey............................................................................................26 4-1. Traditional Role of Media within Marketing.............................................................55 4-2. Communications and Marketing in the 21st Century.................................................55 viii

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Abstract of Dissertation Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Master of Advertising DEVELOPMENT OF MEDIA PLANNING IN A DEVELOPING COUNTRY: TURKEY By Askin Emir May 2005 Chair: Joseph R. Pisani Major Department: Advertising Turkey is a country that unites Europe and Asia, situated in southeastern Europe and southwestern Asia. Turkey is diverse in its ideas, beliefs, and cultures. It is a country undergoing radical changes, and has been for the last century; particularly during the last 20 years. Its economic structure changed making Turkey attractive to global companies. After economic changes, new companies entered the Turkish market. Those international companies carried their advertising agencies with them, and greatly altering the advertising sector. Media planning experienced numerous changes around the world and also in Turkey. The following study explored the media sector in Turkey by focusing on how media planning is practiced and its structure and history in Turkey. To understand media planning, a set of interviews were conducted in Turkey. Information gathered from these interviews was used to answer questions about the roots of media planning and its structure and its problems; the economy and its effects on media planning; and how media planning is practiced in Turkey. ix

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The first objective was to examine media practitioners’ perceptions of the rapid development of media planning in Turkey. The second objective was to better understand the media in Turkey. Last but not least is to learn media practitioners’ views on the future direction of media and media planning. The outcome of the phenomenological analysis defined the distinctiveness of Turkish media. x

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CHAPTER 1 INTRODUCTION Globalization has become increasingly important since the 1990s. More companies are entering the international markets every day. Global trade is driven by multinational companies competing for consumers around the world. With the rapid developments in technology, the cost of transportation has decreased, communication is faster, and financial transactions are much easier. Time and distance are no longer prohibitive barriers to global marketing. Companies produce and sell their products in different countries. Consumers around the world are using the same brands: they wear Nike shoes and Levi’s jeans; eat at McDonald’s and Burger King; use Dell and HP computers and Microsoft Windows; drink Coca-Cola and Pepsi Cola; and drive cars such as Ford, Honda, and Nissan. Companies enter international markets for variety of reasons; and these different objectives at the time of entry produce different strategies, and different performance goals. Many companies in the United States and Western Europe recognize that domestic markets offer firms limited expansion opportunities because of slow population growth, saturated markets, intense competition, or an unfavorable marketing environment. Thus, many companies focus on foreign markets to survive. International markets are just as important to small and midsize firms they are to the large multinational corporations. Many small and midsize can compete more effectively in foreign markets (where they may face less competition, or appeal to 1

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2 specific market segments; or where the products have not yet reached the maturity stage of their life cycle). Many companies in the US have long knowing the importance and profitability of international markets. However, there is another increasingly important reason for US companies to engage in international marketing: Imports are taking a larger share of the domestic market for many products. The US has been running a continuing trade deficit. American government and companies realize that the US is shifting from being an isolated, self-sufficient national economy to being a part of an interdependent global economy. This means that U.S. corporations must defend their domestic market share and also learn how to market their products and services abroad. For this reason, the US Department of Commerce identified 10 big emerging markets in the world that U.S. companies should pay special attention to in 1995. When entered new markets, companies want to introduce their products by hiring advertising agencies. In this process, media planning is becoming more important for clients. Advertising expenditures are higher today; therefore, clients want to know how effective their media plans are, and how their money is being spent on media. Purpose of the Study The main purpose of our study was to discover how advertising developed in Turkey and its current characteristics. The interviews were conducted with a number of media specialists in Turkey to discover the importance of media planning, by examining media-planning companies. Rationale of the Study Turkey (with a population of 68 million people) was identified by the US Department of Commerce as one of 10 "Big Emerging Markets" (BEMs) (Hurh, 1998).

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3 In addition to being near to Central and Eastern Europe, Turkey is a gateway to the Middle East and Central Asia. Turkey is one of the most industrialized nations (after the US, Western Europe, and Japan). Its economy is now the 17th largest GNP in the world, with a sustained growth rate of 5% over the last 20 years. Turkey has a rapidly growing free market economy. The government has been committed to growth and development, passing legislature to liberalize the economy. Furthermore, people in Turkey aggressively try to adopt a western lifestyle. For all these reasons, Turkey is an important market for US companies. Turkish governments, which began to implement liberal free-market policies in the early 1980s, endorsed substantial development projects in an attempt to improve the country's telecommunications infrastructure. Since the 1980s, because of development of new technologies and deregulation and privatization policies, there have been phenomenal changes in mass media systems in Turkey. Today, Turkey has more private television channels than any of the European countries. Turkey had only 2 statecontrolled television channels before 1991. In accord with the globalization process in the world, Turkey experienced a fast growth in advertising quality and steadily increasing total advertising spending in recent years. Turkey’s advertising structure is also moving away from the traditional standards to the standards of the market economy. Today Turkish advertising is ahead of many other in terms of adopting and applying the EU and US standards. Since Turkey is culturally different than most of the Western countries, the history of media and media planning differs significantly. Because of the history and the different traditions, the timing of major events in the media sector has been different in

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4 Turkey. The first newspaper in Turkey was published in 1831, but national newspapers in Turkey started publishing in the 1950s. While 1 million homes in the United States had a television set in the year of 1948, the first regularly scheduled television program in Turkey aired in the late 1960s. The history of radio broadcasts dates back to the first quarter of the 20th century. Turkish media witnessed very important changes in 1990 after the founding of the first private TV channel and radio station. The constitutional monopoly of the Turkish Radio and Television Corporation (TRT) was damaged by many radio and television channels that started broadcasting illegally both domestically and abroad in 1990. The first private TV station in Turkey aired its first program 36 years after the introduction of the broadcasting system. In this period, besides TRT, many private radio stations and television channels actually started broadcasting. Later in the 1990s the constitution was changed to accommodate new channels. In the last 14, the number of TV channels and radio stations increased rapidly. Now, Turkey has national, cable, and satellite networks. Economic changes and eagerness to achieve European and US standards were the Turkish media’s biggest motives. Choice of an advertising agency in foreign market can be challenging while local advertising agencies better understand the needs of the local markets; but these companies cannot afford an uncoordinated approach advertising (Vedpuriswar, 2001). Some companies prefer to work with different agencies for different countries; other companies prefer to have only one agency manages their advertising globally. Today, there are Turkish and also multinational advertising agencies in Turkey. Since advertising

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5 is the key factor for companies to be successful in Turkey, our study analyzed Turkey’s advertising system with a focus on media planning in Turkey. Global media took decades to progress its current state. Amazingly the Turkish media took only about 15 years to develop. Now Turkey has 12 media-planning companies (and almost none of them existed as multinational companies before the 1990s). Since media planning is still fairly young in Turkey (and developed faster than any other country in the world), this area needs further research and development. Our study should be an important resource for future researchers who want to further explore the increasing importance of media development, and to understand the main differences of media among the countries and cultures. (By analyzing how the media developed in Turkey differently from Europe and the US). Research Overview There are five chapters in this thesis. Their outline is as follows. Chapter 2 presents the literature review and has five parts. This chapter takes a closer look at the history of early Turkish advertising, newspaper, TV, and radio. This chapter will also look at the history of advertising agencies and economy in Turkey. Chapter 3 discusses the methodology being used in the study. Chapter 4 reports the results of the findings from the interviews. It gives readers a better understanding of media planning by stating quotes from the interviews. Chapter 5 provides a discussion of the results and conclusions of the research. It also mentions the limitations of the study, and makes recommendations for future research

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CHAPTER 2 LITERATURE REVIEW History of Advertising in Turkey A study of early Turkish advertising will be done by reviewing the development of newspaper, radio, and TV in Turkey. Also, history of advertising agencies and brief history of Turkish economy will be reviewed. Newspaper The structure of the press in Turkey is similar to the press in Europe, but its roots belong to a quite different tradition and one with unique historical, political, and social dimensions. The first press in the Ottoman Empire was opened in the 1730s. Between the years 1729 and 1742, a total of 12,000 books were published by the Muteferrika Printing house. Compared to Europe, the literacy rate was very low in the Ottoman Empire in the 18th century. Book and newspaper publishing started almost at the same time, therefore; Turkish people met the newspaper culture without having an intellectual book background; this still influences today's readers. People started to read mass papers which deal with "the day's" events before they read the books. In 1795, the first foreign newspaper, "Bulletin des Nouvelles", in the Ottoman Empire was published in Istanbul. The lack of capital investment and primitive methods of circulation prevented newspapers from developing their markets. During the Napoleonic era, the embassy also published the "Gazette Francaise de Constantinople" which dealt with political issues. However, these newspapers were closed for political reasons at the end of the 19th century. 6

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7 The first Newspaper was published in 1831 in Turkey. Sultan Mahmut II, who was the Ottoman Sultan in 1808, observed the important effect that the newspapers exerted on internal and external politics. He recognized the State’s need for an official organ for the dissemination of information. He personally gave the name Takvim-i Vekayi (The calendar of events) (Cakir, 1997) to the newspaper’s first issues of 5000 copies printed and distributed on November 1, 1831, and has adopted it as his own. Because the newspaper was a government owned, the first journalists were civil servants salaried by the government. In fact these editions were mainly published to announce the latest instructions to administrators and bureaucrats. The first issue of Takvim-i Vekayi had a 400*270 mm(16*11 inches) format , covered eight pages, and the text covered two columns (Ertug, 1964). There were no headlines on either news or other articles, the only separation consisted of a vacant double-space. The official section was devoted to appointments and decrees; the non-official portion to news, along with articles relating to instruction, education, crafts, and commerce. The content of subsequent issues retained approximately this character, but titles began appearing at the head of articles and improvements could be seen in technique and craftsmanship. The first advertisement appeared in the 11th issue. Between 1831 and 1873, Takvim-i Vekayi was published only 2,119 times. The first individually owned newspaper in Turkey belonged to an Englishman by the name of William Churchill. In 1836, permission to publish a Turkish-Language newspaper was granted to Churchill, who was then Istanbul correspondent for the Morning Herald. William Churchill first published a newspaper called Ceride-i Havadis (Journal of Events) on August 1, 1840 (Ertug, 1964). It was a semi-official newspaper.

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8 Generous space was allocated to official appointments, government communications, and decrees( Cakir, 1997). The first private (independent) Turkish newspaper was Tercuman-i Ahval (Interpreter of Conditions)(Cakir, 1997) published by Agah Efendi. Launching forth with Sinasi Efendi’s encouragement and promise of assistance, Agah Efendi succeeded in bringing out the initial issue of the Tecuman-i Ahval on October 21, 1860 (Barouh, 1968). Its purpose was not simply to praise and magnify the state but to act as a forum for ideas and arguments. Because of its simple language and the way it implicitly addressed the people themselves, it attracted interest from its very first issue and provoked a competitive response from other newspapers. Most of these newspapers were planned as weekly papers, but they never reached the goal of 52 issues per year. If we look at the collection of these newspapers, a very small amount of advertising can be seen these were death announcements, for sale items, and government ads. Two business ads were published in 1864 in Tercuman-I Ahval. One of these was an ad about the arrival of Californian dinner sets and the other one was about agricultural machines sold by the Lotel Ciznel Company. The second ad is important because two small pictures were used in the composition of the layout. The path was now paved; the number of newspapers and magazines began to increase and periodicals of various kinds made their appearance. The first newspaper to publish only economic and commercial news and articles was the Takvim-i Ticaret (Calender of Commerce) in 1856 (Ertug, 1964). Four newspapers and magazines were added in 1866 to the field; seven in 1867, one in 1868, nine in 1869, and ten in 1870. In subsequent years the number added never fell below seven or eight per year. Another newspaper, Servet-i Funun, even with its increased circulation, was not

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9 able to attract ads and it still had not become a desirable medium for advertisers. Most ads were still very small and the monthly revenue was between 12 and 15TL. When we analyze the period of Abdulhamid, which begins with Tercuman-i Hakikat, we are not able to find any advertisements in the modern sense. The reason for the small amount of ads was the government’s vigilance and influence over the press. Prior to 1864, when the “Press Regulation” went into effect there had been no legislation pertaining to the press. These new regulations contained stern provisions. The publication of periodicals requires government permission which the government could withdraw at any time. Besides, the authority of the government to close periodicals temporarily or permanently was recognized. These regulations stipulated numerous acts that there were to be treated as offenses and laid down heavy penalties for violation (Ertug, 1964). Advertising, like most of the business of the day, was not of major proportion. The result of all the competition was that newspapers bid against one another on the basis of price. This may be another reason for the slow rise of advertising in Turkey. Second Constitutional Government The despotism of Abdulhamid II was overturned by the initiative of the Turkish Army. The constitution was again put into effect on July 23rd, 1908 and elections to the parliament were held shortly thereafter. The newspapers that came out the day after the constitution was reinstituted were unrecognizable. They were filled with articles and pictures that simply could not be compared with the newspaper of the preceding day. The Turkish press suddenly came alive; eagerness and excitement were boundless. Articles, pictures, and cartoons accusing and slandering the past regime overflowed the pages. It was during this period that the

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10 first advertising agency was established which bore the name “Ilancilik” and ultimately become the largest advertising agency in Turkey (Barouh, 1968). The period from 1909 through 1918 encompassed the War in Tripoli, the Balkan War, and World War I (Ertug, 1964). The Republican Regime In 1920, Mustafa Kemal, the first democratic president of Turkey, set up the Anatolian News Agency to provide for the circulation of news during the War of Independence. The aim of the press during the war was simply to win the war and not to provide a platform for different points of view. Besides, most of the newspapers were also activists of the war. The Republican regime, declared on October 29, 1923, opened a new area for the Turkish press by increasing first the amount of circulation and then the amount of ads. Just after World War I, two foreign companies, one American and one German, began to produce some ad campaigns. The first one was for motor cars and the second one was for pharmaceuticals. These campaigns increased the earnings of newspapers and their interest in advertising. On November 3, 1928, the Turkish Republic abandoned the Arabic characters and adopted an alphabet based on the Latin alphabet. This step proved to be a turning point for the press and advertising business. The number of readers suddenly declined sharply (Table 2.1). However, with the ease of learning of the new alphabet the proportion of literacy among the people rose rapidly (Barouh, 1968). For this reason, the number of newspaper readers and consequently newspaper circulation increased. During these years, the highest circulation of any newspaper was 30,000.

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11 2-1. Literacy in Turkey Year Male Female % of Total 1997 852 260 11 1955 5,479 2,436 41 1960 6,158 2,743 40 World War II Throughout the period of World War II, beginning in 1939, the Turkish press was subjected to restrictions on paper consumption, depriving them of the opportunity to develop technically. During the first years of this period, the earnings from advertisement fell and fell sharply after 1942. A Coup for Every Decade After 1945, as Turkey changed into a multi-party system a "press madness" was once again experienced. Radio lost its pre-eminence relative to newspapers, which were increasing in number every day. The Democratic Party (DP), the governing party of Turkey from 1950 to 1960, won the first elections after the change in the system. The DP soon took strict measures against freedom of speech instead of liberalizing it, as they had promised in order to win the elections. Between 1955 and 1960, 2,300 press cases were heard, and 867 journalists were sentenced to prison. Newspapers that opposed DP policies faced financial handicaps. The party was democratic as a position, but dictatorship as a government. In the 1960s in Turkey, the notion of advertising with its contribution to sales and therefore to profits of a business enterprise was very new. It was not realized in full by the businessmen. Radio was used as a medium only after 1951. “Advertising has gained importance only after the development of domestic industry” (Neyzi, 1965). Another reason was that there was still not yet a capital market where savings could be channeled into the hands of investors. As the rate of capital accumulation was relatively low, the

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12 stage of mass production, which permits large scale advertising and yields high returns, had not been reached in Turkey. “Businessmen lack entrepreneurship, and do not recognize the benefits of advertising for their companies. If an engineer becomes the executive and everything is asked from him in the company, how could he possibly know about advertising to contribute and comment on?” (Alemdar, 1966). Turkey experienced three coups between 1960 and 1980 and entered a rapid process of economic development and industrialization. The press gained new confidence with the 1961 Constitution. The advertising revenues increased rapidly in the 1960s (Table 2.2) (Alemdar, 1966). 2-2. Advertising Revenues Year Ad Revenue in TL $ 1962 25,682,211 2,853,579 1963 34,132,881 3,792,542 1964 46,746,235 5,194,026 Print media was the most widely used and daily newspapers handled more than 50% of Turkey’s consumer advertising. “These newspapers will survive and exist in the future” (Cillov, 1965). However, there were weaknesses in print media; the main one being lack of selective advertising. This is an outcome of two main reasons: The newspapers did not know exactly who their readers were. There were not many professional and trade papers or magazines which had enough circulations to provide a fair return for advertisers. Another weakness with regard to print media was the reluctant attitude of the intellectuals towards advertising in the newspapers. With the second coup in 1971, freedom of speech was curtailed once again. Yet, in the ten years between the two coups, the concept of press freedom, technological

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13 advances, and the rapid delivery and increased circulation of newspapers, all meant big changes. These were the years that the connections between the Turkish press and big business were established, resulting in substantial capital investment. Starting with the 1980 military coup, Turkey underwent a process of restructuring in every field, and the transition to liberal economics was the major priority. The "liberalization process" was understood only in the economic field (not in the political field), more than 200 books were burned and 200 journalists were sentenced to jail among 600 press cases following the coup in 1980. As a result of the new liberal economic decisions, which led to the end of press subsidies by government, newspapers had to try to find new sources of finance. As the competition increased, the newspapers began to engage in a battle for a bigger market share. Many newspapers could not take the pace and disappeared from the market, while others emerged. Since the beginning of the 1990s, with the spread of the private television and radio channels, multimedia conglomerates emerged with capital held in common by the banks and the enterprises. “The impact of the print media in Turkey is fairly low. The average circulation of the daily newspaper is 4 million, serving a population of 64 million people. This is partly because newspapers are not affordable for a big part of the Turkish population”. One newspaper costs more than two loaves of bread. High prices in turn are partly due to the state monopoly on paper and high import taxes for paper. The profits in the print media are made by advertisement revenues. Around 41% of the countrywide advertisement expenditure is invested in newspapers (Hadjidimos, 1998/99). The readership of

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14 newspapers declined from 1980 to 1999 because of the army coup that seized many publications and newspapers. One of the biggest developments in 1994 was the merging of Milliyet and Hurriyet, the two leading newspapers in Turkey. With all their media organization (newspapers, radio and television companies, publishing houses and distribution services), this is the largest publishing group ever in Turkey and controls a disturbing proportion of the news media in the country. The newspapers (Figure 2-1) offer houses, electronic goods, cars, cash, and planes in return for coupons from their papers. Most of the times, the owners of these media groups also own a share of the big companies. Although a very large amount of money is being spent for the promotions, many newspapers are unable to pay the salaries of their employees. NEWSPAPER(1,042 Titles Approx.) 32 National 1,000 Local 10 Regional 2-1. Newspapers in Turkey According to the official figures, there are 5,369 periodicals (including newspapers, magazines, etc.) published in Turkey, of which about half are weekly. The number of daily national newspapers published is 32, while there are 1000 local and, 10 regional

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15 newspapers. There are 2,578 local and nearly 50 national magazines. Quality in publication has been improving due to advances in printing technology. The same developments have also increased newspaper circulation Newspaper ownership has become more concentrated in turkey. The five biggest newspaper companies, Dogan Media, Media Group, Cukurova, TMSF, Ihlas holding now control 85 percent of the circulation of all national dailies and Sundays (Figure 2-2). Cross media ownership is also increasing. Same companies own Turkey’s biggest TV channels and radio stations as well as magazines. NEWSPAPER DOGANMEDIA IHLASHOLDING TMSF CUKUROVA MEDIAGROUP HurriyetGozcuTD News Turkiye Star AksamGunesBulvarTercuman Hurriyet MedyaD MilliyetSimgePostaRadikalF.Forum ABCTanitim MEDIGRUP TakvimSokGunaydinPas SabahFotomacYeni AsirCumhuriyet 2-2. Newspaper Ownership in Turkey Radio The first official radio broadcast aired in 1922 in Istanbul, however; development of radio as a medium was very painful, fast, and surprising. The legal root for radio broadcasting and communications was laid in 1925 with the passing of a law establishing wireless broadcasting. In 1925, two transmitters were set up in Ankara and Istanbul for radio broadcasting. Radio Ankara started broadcasting

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16 in October 1927. According to Article 121 of the 1961 constitution, radio broadcasting was given a new status with the approval of law 359 in 1963, which in time led to the establishment of the Turkish Radio and Television Corporation. When it was franchised to a private company (1926-1936), the broadcasting service (radio only) had been under direct government control as an administrative agency of the state (Sahin, 1981). There was no problem with being directed by the state. In fact, it was quite consistent with the other features of the single party rule by the Republican People’s Party (RPP). After the introduction of the multi-party system after the Second World War, however, argument developed over the use of the broadcasting service. The problem was raised almost immediately, complaints about the one-sided use of the state radio by the RPP. After the 1960 coup, Prime Minister Menderes and his subordinates were brought to trial, charged with, among other things, the abuse of the state radio for partisan purposes. The case was later merged with the Constitution Case on grounds that the abuse of the state radio constituted material evidence of the violation of the Constitution (Weiker, 1963). The Radio Case became recognized as an important landmark in the history of Turkish broadcasting. Radio advertising was relatively new when compared to print media. Radio advertising was established in Turkey in 1952. Radio was used for political purposes from the beginning and finally after 1961, the Turkish political system developed into a multi-party structure rather than a two-party one. After that, the Turkish administrative organization was centralized. In addition, the broadcasting organization remained under the central hierarchy for more than 30 years (Sahin, 1981). Especially the universities and the free press defended the independence of the TRT resolutely.

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17 After all these changes, radio became a medium where potential advertisers could advertise. The increase in radio advertising in the 1960s is connected with the over all increase in radio sets produced and the increase in the number of radio stations (Ertug, 1964). According to the Prime Ministry Statistical Institute figures as of March 1965, the number of registered radio receivers in Turkey was around 2,315,210 and more or less than half of this amount was distributed in the large cities. The continuous and booming development of radio advertising during the 1970s seems to confirm that advertising had become a very important; also, on January 2, 1975, TRT1, TRT2, and TRT3 started broadcasting in Turkey. The Turkish radio maintained for a long period very rigid rules about advertisements. The reasons were that radio broadcasting was controlled by the government and was not envisioned or planned as an advertising medium. The reasons for the increase of radio advertising versus newspaper advertising in Turkey were Compared with print media, radio advertising does not necessitate large sums of money; therefore many of the small agencies are engaged in radio advertising. Radio advertising has a low cost compared with print media. It can be presented at selected times. It transmits the persuasive voice of the salesman directly to the consumer. It reaches persons in a wide number of places engaged in a wide range of activities. It has audience selectivity available through scheduling at different periods and in different cities. Also, the relative increase in the importance of radio advertising is due to technical improvements, increase in the number of video sets and an increase of advertising expenditures in the country. Compared to print media, radio advertising does not require

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18 large sums of money, therefore many of the small size agencies were engaged in radio advertising. As a result of this, the quality of the advertisements was not a priority. Interesting thing is 50% of radio advertising in Turkey was done only in Istanbul, the biggest city in Turkey. Private Radio Stations Development of private radio stations in Turkey occurred after the introduction of the first private TV channel, Star 1, in Turkey. Once this first privately owned television channel had been established to compete with TRT, a lot of new private television and also radio channels began to reach Turkish audiences. As a result, the broadcasting system experienced a series of hasty and radical changes. By the beginning of 1993, there were almost 500 local commercial radio stations and 100 local television stations operating without licenses. “The government was faced with little choice: as the private radio and television channels had won the hearts of the nation, there was little else that could be done but to legalize these channels” (Capli, 1998). Today there are more than 1,200 radio stations in Turkey with 36 National, 108 Regional, and 1,059 Local stations (Figure 2-3). TRT remained in a separate position in this field, both from the aspect of its perception of broadcasting and from its legal structure. TRT Law No. 2954 is a document that clarifies the different position of TRT. Today, TRT is a broadcasting institution providing public service. TRT has 7 television channels. They are: “TRT1, which addresses the general public and has a perception of diverse broadcasting; TRT2, which makes broadcasts of culture and art; and TRT3, which has a "youth" channel identity with different types of music programs and sports programs. Furthermore, TRT3 is a

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19 bridge between the members of Parliament and citizens, with its live broadcasts from the Turkish Grand National Assembly at specific hours of the day. TRT4 is an educational RADIO STATIONS 1,203 + Stations 36 National 108 Regional 1,059 Local 96 Foreign 675 Turkish 382Foreign+Turkish 46 Arabesque 2-3. Radio Stations in Turkey channel which includes the open university and open high school lessons and its broadcasts support the national education policy. TRT-INT and TRT-AVRASYA with its broadcasts abroad has the function of a bridge between Europe and Asia. Lastly, the TRT-GAP broadcasts in the provinces in the Southeastern Anatolia Region.” Even though survivability of the existing stations was questioned in light of economic limitations of the Turkish advertising market (Dndar, 1992), others, including the mass circulation Sabah and Hurriyet newspapers and the conservative Turkiye newspaper, were lined up to start their own stations. Prospective broadcasters were caught up in a race to grab as much of the electromagnetic spectrum as possible while the legal void persisted. This led to reception difficulties and frequent chaos in large cities like Istanbul, Ankara, and Izmir (Erlevent, 1992). The plunder of the frequencies on the

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20 FM band was just as persistent, and the consequences for the TRT just as serious. According to a survey conducted in the fall of 1992, the four TRT radio networks were preferred by less than 20% of the Istanbul radio audiences. As mentioned earlier, radio ownership has also become more concentrated in Turkey. The biggest newspaper companies, Dogan Media, Media Group, Cukurova, TMSF, Ihlas Holding, Dogus, and Medya Grubu now control almost 90 percent of the radio stations. (Figure 2-4). Television In 1948, there were about 70 stations on the air in the US, while Turkey opened its first TV station (TRT-Turkish Radio Television) in 1964. With the approval of the 1961 Constitution, changes, restoration, and developments were witnessed in Turkey in all fields. Radio and television broadcasting, the most effective means of communication, was assigned to TRT according to the provision stipulated in Law No.121 of the Constitution which stated: "The management of radio stations and television networks are regulated under the law as autonomous public corporate bodies." The Turkish Radio Television Law No.359 was approved on December 24, 1963, and went into effect on May 1, 1964. TRT was broadcasting programs for six or seven hours each day and these programs were transmitted to a very small catchment’s area due to low transmission power. Until 1984, TRT's television channel (TRT1) was the only channel offered to the viewer. That same year this channel began to broadcast its programs in color. (Capli, 1998).

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21 RADIO DOGANMEDIA IHLASHOLDING MEDYAGRUBU DOGUS SHOWBASIN TMSF CUKUROVA MEDIAGROUP Hur FMCNN TurkiyeRadyo ForeksRadyo D Radio Sport TGRT FM Number OneFMKlas FM NTV RadyoRadyo 101Radyo Eksen Super FMKral FMJoy FMMetro FmLokum FM Alem FM 2-4. Radio Ownership Turkish broadcast is fairly young; however, Turkey has more private TV channels and radio stations today than any other European country. Literacy was still considered low in Turkey, so people showed great interest in TV. The importance of TV in Turkish society, together with the two military coups in ten years, caused the newspapers to isolate themselves from politics during the 70s. Until the first private channel was founded in 1990, the state television was the only source of visual news. Since the 1980s, due to the rapid development of new technologies and deregulation and privatization policies, there have been phenomenal changes in mass media systems in most parts of the world, and these changes also affected the media systems in Turkey. Turkish governments, which began to apply liberal free market policies in the early 1980s (Catalbas, 2003), approved large development projects in an effort to improve the country's telecommunications infrastructure. Until the late 80s, stateowned TRT enjoyed a monopoly. In the world, there was a remarkable improvement in the telecommunication industries, and based on that, Turkish media witnessed very important changes in 1990 following the appearance of the first private TV channel and radio station. The conditions

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22 were created for private radio and television broadcasting, both in an objective and subjective way. In this period, besides TRT, many private radio stations and television channels actually started broadcasting. Private TV Stations The history of private television in Turkey is 15 years old. In 1982, there was single state-run channel (TRT) broadcasting in black and white; in 1984 it started broadcasting in color; and in 1989, there were three state-run channels broadcasting in color. At the end of 1992, there were six state channels and six private channels, all broadcasting in color, with several other channels lined up to grab a frequency (Rossant, 1992 & U!ur, 1991). Changes in the broadcasting system were expected with the surprise victory of Turgut zal’s Motherland Party in the general elections of 1983. zal was an unabashed free marketer, a staunch advocate of the free circulation of goods and ideas. He promised wide-ranging privatization of the state economic enterprises. He made no secret of his adoration for all things American, including the commercial broadcasting system (Cemal, 1989 & Gldemir, 1992). It was assumed, therefore, that once in power, zal would take steps toward the privatization of the state monopoly on broadcasting to expedite Turkey’s economic and cultural integration into the globalization process, which he described as “synchronization with the civilized world”. The TRT remained intact during zal’s first term, which ended in 1987. The pressure for allowing private television stations to operate began to build during the early years of his party’s second term. The main legal hurdle was Article 133 of the Constitution, concerning the state monopoly (Sahin& Aksoy 1993) . Although zal’s

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23 party did not have the two-thirds majority required amending the Constitution, it could have easily gained the backing of the opposite parties. In late 1989, however, zal gave the first signal of the impending change when he told reporters that even though it was unconstitutional to set up private television channels on Turkish soil, there was nothing illegal in broadcasting into Turkey from abroad, like Cable News Network (CNN). A few months later, in May 1990, a company called Magic Box announced its intention to do just that and began experimental broadcasts into Turkey from its transmitters in Germany. One of the partners of the Swiss-based company was Ahmet zal, the son of the president (Aziz, 1991). The first private television sector started in September 1990, a commercial channel (STAR 1), benefiting from a loophole in the monopoly law, it began broadcasting its programs in Turkish via satellite from Germany. Ahmet Ozal, the son of the late Prime Minister Turgut Ozal, and his partner Cem Uzan started broadcasting from Germany to support Turgut Ozal’s election campaign (Hadjidimos, 1998/99). Others followed rapidly in Star 1’s wake. By the end of 1992, Show TV, Kanal 6, Flash TV, HBB, and the second station, Teleon, were also broadcasting into Turkey from abroad. Furthermore, the simple and monolithic structure of the Turkish broadcasting media was shattered by the mushrooming of private and commercial television and radio stations during the early 1990s. In the summer of 1993, private broadcasting was permitted in Turkey by parliament. By the time parliament legalized private broadcasting, there were already 700 private radio and TV stations in Turkey.

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24 The growth in the number of radio stations was even faster. More than a dozen commercial stations went on the air in 1992 in "stanbul to tear down the control that had previously been enjoyed by the four TRT radio networks. (Inan, 1992). The transformation was sudden, especially for TRT. “It took three major American networks a whole decade to lose one-third of their audience; the TRT suffered much heavier losses in a matter of a few months. According to AGB, which provides ratings based on data measurements taken in Ankara and Istanbul, the total share of the four commercial TV channels-ShowTV, InterStar, Teleon, and Kanal6was 70.8%, while TRT’s five channels got a mere 24%, and the remainder went to satellite channels and videos . Among the 15 most highly rated programs during the first week of November, 1992 were 10 ShowTV programs, 2 InterStar programs, 1 Teleon program, and 1 Kanal6 and TRT program each. The TRT’s loss in advertising was just as dramatic: In September of 1992 alone, TRT’s combined advertising revenue fell while ShowTV’s revenue climbed, followed by InterStar (Rossant, 1992). The advertising community was convinced that TRT was losing the advertising battle. The once-mighty TRT was broke, making it difficult to pay the salaries of its full staff. The old order had been destroyed effectively without much discussion of the new one to replace itno commission reports, no citizen group meetings, and no white papers. In a matter of fifteen years, the number of the TV channels and radio stations increased rapidly. Currently, in Turkey there are terrestrial networks, cable networks and satellite networks. Presently, there are 19 national, 15 regional, 229 local, and 53 cable channel in Turkey (Figure 2-5). This is one of the most colorful, most exciting media environments in a region stretching from the Balkans to India. In Turkey, there are

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25 800.000 subscribers in 20 regions and right now a new tender is out spreading cable distribution to all 80 provinces (Colakoglu, 2004). Recent years also have brought increasing freedom to Turkish media. As Turkey moves toward membership in the European Union, efforts to meet European standards have fostered unprecedented change. TV is the medium in Turkey with the greatest TELEVISION 19National 15Regional 229 Local 21 Private 6 State 6 Pay 1 Digital 53 Cable 5 Traditional 11 Foreign 5 News 19 Main 13 Music 2-5. Television Channels in Turkey impact on public opinion. The satellite-based broadcasting ventures were all commercial, thus introducing a whole new set of issues and parameters. The advertising market nearly doubled in size between 1991 and 1992 (Sahin&Aksoy, 1993), responding to the increasing competition in the broadcasting market. The prices of foreign broadcast programming doubled and broadcasting “stars” changed jobs frequently, lured to new channels by astronomical fees and salaries. However, the fate of the newly born commercial broadcasting marketplace remained uncertain. In November 1992, there were six commercial and six state channels on the air, competing vigorously for advertising

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26 revenue. If we take into account that the total advertising revenue received by television stations was around of $400 million in 1992, then the sustainability of commercial television in Turkey becomes rather questionable (Dndar, 1992). The highest earning station, Show TV, was expected to reach a $120 million mark in annual revenues in 1992 (Berkan, 1992). In many cases, the financial pressures resulted in cost-reduction schemes that, just as everywhere else, led to importing of cheaper American and Latin American series. Foreign series accounted for more than half the program slots in a week, and the top 10 most-watched programs were quiz shows and comedies, with the exception of two news magazine programs. Predictably, the logic of the market began to lead to a new kind of homogenization in programming. TV ownership is in the same companies mentioned before (Figure 2-6.) 2-6. TV Ownership in Turkey History of Advertising Agencies in Turkey Advertising has become important since the 1950s. By the 1960s, there were about 300 firms in Turkey engaged in the business of advertising in one form or another. Among these, nearly 200 dealt with radio advertising exclusively. Not more than 25 of them provided complete advertising services (Barouh, 1968).

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27 Advertising as a profession was very new in Turkey in the 50s. In the 60s, it started to develop and show some progress, but none of the agencies were in a position to fulfill the very first condition required for agency-membership in the European Association of Advertising Agencies: “The experience and ability within its own organization to supply a media buying and a creative plan, and be able to advise on sales and distribution problems, and to supply a marketing plan and to interpret research” (The Constitution of the European Association of Advertising Agencies, 1966). The advertising agencies in Turkey did very little with regard to marketing and in handling sales and distribution problems. Most of the agencies did not have the knowledge of what marketing is, nor its principles. In fact, with regard to market information and advice, it was the advertisers who assumed the burden to search for facts and offer them to the agency so that the agency can prepare advertisements in line with the general policy of the advertiser. No advertising agencies existed that provided ideas about merchandising and sales promotion either. The quality and artwork of the advertisements prepared by these agencies were also not good. Needless to say that none of the agencies in Turkey were members of the European Association of the advertising Agencies (Alemdar, 1966). None of the advertising agencies in Turkey was organized well enough to carry out what is called Market Research. For the time being, only PEVA was engaged in market research. It is also interesting to note that none of the advertising agencies subscribed to the serial media research programs from the Peva-institute 1 . Advertising agencies did purchase the time and space but the available knowledge best suiting the need of the advertiser for his/her product, with regard to media selection 1 PEVA was engaged in market research in Turkey in 1966. It was the only institute which engaged in market research.

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28 was based on nothing but past experience and some statistical figures of Basin Ilan Kurumu and the Prime Ministry Statistical institute. So, it would be correct to say that when an agency advises the advertiser for the selection of a certain medium, it is most likely an arbitrary evaluation with no scientific basis. Basin Ilan Kurumu was created by law No.195 on January 2, 1961 (Alemdar, 1966). It is a separate legal entity and among its various functions, such as providing credit facilities and financial aid to members of press, the very first is to distribute official announcements and advertisements of state enterprises which do not have a registered branch office or a representative in Turkey. In the 1960s, a small number of agencies were working through big advertising agencies. When small agencies were unable to obtain recognition, it was possible in Turkey to have the accounts processed through a recognized agency and thereby obtain a portion of the commission granted by media to recognized firms. This was not the only problem that small advertising agencies faced; some clients deliberately exploited agencies’ need for new business and forced agencies to finance their operations by credit extension. The small agencies were happy to work through a big advertising agency and place their advertisements. In a newspaper, with 15-20 % commission, this would not have been received otherwise. The big advertising agencies were also happy with working these small agencies on two counts at least. First, they received extra 5-10% commission from the advertising which they did not prepare but just placed them the print media. Second, they can exert monopolistic power in the market and since their initials appeared in the newspaper when the advertisements were printed this way, they create propaganda for themselves as if

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29 they were having a large number of accounts. This system seems likely to persist indefinitely unless an organization among advertisers in form of an association or a federation, which places the advertisements of small advertising agencies, is founded. As a second solution, the newspaper and the magazines may give returns on an annual base, with relatively high percentage. When an agency was getting a 25 % commission from the advertiser, some of them were transferring some of this commission directly to the advertiser, and according the agencies, the reason for that is 25 % was higher than the percentage which needed to yield a reasonable profit to the agency. Especially among larger and more profitable accounts, many principal agencies currently rebate part of their commissions to their clients. Some of the criticism of advertising is probably due to the work of less efficient agencies which under the umbrella of the mandatory 25% commission system, were able to obtain business primarily through cutting of prices rather than their business ability. The fact that publishers were willing to pay 25% commission to advertising agencies did not mean that any one could start in the business and automatically collect commissions. Since there was no advertising association, there were no legal or otherwise written requirements for the establishment of an advertising agency. But media allowed commissions to only those organizations that they recognize as advertising agencies. Recognition means that a particular medium acknowledges that an agency possesses the financial stability, personnel, and other qualifications to warrant its performing the service for which the commission is allowed. It may be stated that by far the most important consideration in obtaining recognition is the amount of the agency’s billing. (Barouh, 1968).

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30 The advertising agencies were financially weak and were not in a position to offer required services; they also lacked qualified personnel and equipment besides sufficient capital. Most of the ad agencies in the mid 1960s were not only ad agencies, they were also provided some other services “ Upon visit to an advertising agency, at the entrance a secretary met me and asked whether I had come to see the doctor or the advertising agency” (Erol Moran, Moran Reklam Advertising-Alemdar, 1966). Only renting an office was enough to open an agency. Because of this attitude, the prestige of the advertising profession and the confidence of the advertisers in the agencies were certainly damaged. There was no organization even among the advertising agencies themselves to set minimum requirements to open an advertising agency in Turkey, or at least to become a member of the organization, so anybody can own a little advertising agency without fulfilling any obligation or requirement. When agencies bought space or rented time in the media they were asked to pay in cash but they were not in a position to get cash from the advertisers. Some managed to stay in the market but a high percentage of them, after a short time, faced the situation of bankruptcy under these conditions, and either went out of the market immediately or tried to extend their survival in the profession by lowering the quality of their artwork. In either of these cases they ruined one thing, the prestige of advertising agencies. The phenomenal growth of advertising and advertising agencies in Turkey during the 1970s (Barouh, 1968); is indisputable. There are a several reasons for this: Growth in productivity per worker in some industries: An efficient way needed to be found to stimulate demand for this growing production.

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31 Growth of transportation: This growth made national markets and central producing points feasible. Small increase in level of education: A literate, better educated population is more eager to live better (education raises peoples’ life expectations) so they can be influenced more easily by advertising. The important condition for printed ads is that the general public must be able to read. Shift from the older economy of scarcity to the present economy of opulence in some major markets. This newer economic development has changed advertising from the simple informative announcement to the strong competitive product claims, and psychological appeals of greater intensity to consumer emotions Growth of brands, variety and merchandise: Advertising helps to build preference for certain brands. Growth of large-scale industry Growth of free-enterprise vs state-enterprise Growth in income Growth of specialized advertising organizations Well-established agencies were concerned about not producing effective quality advertisements. “In advertising, the essential thing is not to spend large sums of cash or place large size advertisements, but to have effect and impact. In fact, the value of an advertisement is measured through its effect and impact on the reader. It is possible to produce good advertisements with less spending. If it is studied, it can be realized that in Turkey, advertisements which are prepared by spending large sums of money are without impact and effect 90 times out of a hundred” ( Balkanli, 1961). A great percentage of advertising agency owners had a college background and some had advanced degrees. The principal backgrounds were journalism, literature, medicine, radio speakers, artists, radio technicians, old employees of existing advertising agencies, and advertising manager of big companies. Agency owners had no advertising education in universities. Most of them had early training in related fields. Because of

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32 the highly personal nature of the advertising agencies and the large number of agencies in Turkey, it is difficult to make broad generalizations about those agency organizations. About 90% of the agencies have developed an internal organization based upon functions performed. Under this system, specialists are grouped in the same department. Although the number of specialized departments will vary widely from agency to agency, the followings are the functions one would find in any principal agency in Turkey before the 1990s; copy, art, contact, radio production, traffic and accounting, accounting, publicity, and marketing research. Advertising agencies did not show great efforts to improve their functioning, especially if the cost of such an action was relatively high and not likely to bring immediate returns. The main reason stopping or delaying the agencies from taking such measures is the lack of competition among the advertising agencies. Although advertising agencies assert that they did not make many profits from their profession, the advertisers did not accept this argument. They said that it was just the contrary of what the agencies have been saying, and the advertising agencies in Turkey were easy-money makers with regard to the services they provide. Even though there were a lot of shortcomings and bottlenecks exist, sometimes high quality advertisements which are eligible for international prizes were being produced. For instance, two advertisements of Basin Organizasyon Advertising Agency have won the first prizes of Premio Europe Rizoli-1966 (Alemdar, 1966) prepared for magazines and newspaper. Ilancilik was the first advertising agency in Turkey and it was founded in 1909. Until 1952, Ilancilik was one of the big advertising agencies. Ogilvy & Mather was

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33 founded in 1952 in Turkey. 13 years later Manajans Thompson opened its first office in Turkey in 1965. Repro in 1969, Cenajans in 1970, Pars McCann Erickson and Guzel Sanatlar 1973 started opening their first offices in Istanbul. With the development of newspaperradioand television, the advertising sector needed new advertising agencies to promote their clients’ products. Until the 1990s advertising agencies had their own media planning departments. After the late 1980s and early 1990s, with the changes in the sector, those agencies felt the need to have a separate media planning department. Until the mid-1980s, most of the ad agencies in Turkey were local agencies and they were only providing limited range of services. With the transition to a liberal economy in 1982, multinational-global companies started entering the Turkish market and the advertising agencies had to increase their range of services to meet the demands of the newcomers. This created to environment for the existing advertising agencies to become a partnership with large international advertising agencies (such as Y&R, Grey, Saatchi & Saatchi) so that they can get a chance to provide wider-ranging and better quality services, including media planning. However, Turkish media lacked systematic data compilation and syndicated research services. It is only in recent years that some data have been made available to decision-makers regarding media vehicles and their target audiences. Knowing that the media companies the corporations themselves are the providers of the information raises the questions of objectivity and reliability. Among various categories, print media has the largest share of media expenditure after TV. Brief Review of Turkish Economy Turkey’s economy was relatively open to the international markets during the 1920s. The time period of Turkish economy between 1923 and 1929 can be regarded as liberal. The apparent success of the Soviet Union’s drive to develop heavy industry its

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34 First Five-Year Plan (1928-1933), impressed Turkish politicians. From 1930 onward, a new economic strategy was developed in Turkey (Cepni, 2003) to stimulate the process of industrialization through newly established State Economic Enterprises. The poor industrialization records of the private sector, the lack of entrepreneurship, and particularly the adverse effects of the Great Depression were the main factors behind the adoption of statism. In 1933, the first Five-Year Industrialization Plan was announced which was based on the Soviet recommendations. Turkey was the second country in the world to apply Industrialization Plans covering five year time periods following the models of the Union of Soviet Socialist Republics (USSR). Turkey devalued its national currency by 116 percent against the dollar and the Turkish Lira price of dollar was raised from 130 kurus to 280 kurus in 1946 (Cepni, 2003). In 1947, Turkey had become a member of both the International Monetary Fund (IMF) and the World Bank and also joined the International Labour Organization (ILO). Also Turkey started to receive financial assistance from the United States of America. The year 1950 was the cornerstone for the transition to parliamentary democracy in Turkey. The Democratic Party came in to power in 1950. Very important developments were achieved between 1950 and 1953. Due to the significant amount of US capital flowing into Turkey, the main economic goals were achieved to a large extent without facing serious difficulties and privatization in the early years of the 1950s. Turkey has started to suffer a trade deficit from 1947 onwards. The economic life through the end of 1950s the view was not very promising. Although the main policy was announced as trade liberalization, the opposite happened because new State Economic Enterprises (SEEs) were founded and the overall weight of the state in economic affairs

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35 expanded rather that contracted. After the 1950s, private industry was increasingly concentrated on the final part of the production of consumer goods (Cepni, 2003). The liberal decade of the 1950s came to an end in 1958 due to careless and uncontrolled expansionism. Turkey experienced its first major macroeconomic crisis during the post war period. Import – Substituting Industrialization (ISI) strategy was pursued from 1960 to 1979 (Togan&Balasubramanyam, 1996). During this period, Turkey managed to achieve high economic growth rates. The import-substitutions strategy which followed until 1980 was designed to make the country an independent producer of manufactured goods. The industrialization attack initiated during the 1950’s achieved some of its main objectives. It can be said that Turkey protected import substitution industries over exports as well as industry over agriculture from 1950 to 1979. During this period, Turkey followed an inward oriented development strategy. Due to quadrupling of oil prices between 1973 and 1974, and the bad economic situation of the late 1970’s, the trade balance of the country deteriorated even further (Cepni, 2003). Besides its serious economic pitfalls, Turkey started to face political difficulties in foreign relations during the same period. The Cyprus crisis in 1974 caused a tension in Turkey’s economic and political relations with the US. The United States congressional embargo on transfers of military equipment to Turkey became effective on February 5, 1975. During the 1970’s Turkey also kept the nominal interest rates below the rate inflation. Negative interest rates contributed to the adoption of capital-intensive techniques and establishment of capital-intensive industries. It became clear that radical measures were needed. In 1978, Ecevit’s government began negotiations about new credits with the IMF, the World Bank, and OECD (Appendix C).

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36 In July 1979, an agreement giving $1.8 (Cepni, 2003) Billion new credits was reached. Suleyman Demirel came to office in October 1979, and his government made implementation of the program its highest priority. This new minority government founded by the Justice Party made a number of decisions, which are known as January 24 Decisions. The task was given to the undersecretary for economic affairs in charge of planning, Turgut Ozal. This was the point at which Turgut Ozal came onto the political scene as he had been responsible for designing the package. The war between Iran and Iraq (1980-1988) created opportunities for Turkey to sell its products and transit trade increased in this period. With limited access to the Persian Gulf, Iraq became dependent on Turkey for export routes for its crude oil. The increase in petroleum prices increased the purchasing power of Middle Eastern countries and produced a rise in the demand of Turkish goods and services by these countries. Developments in foreign trade can be analyzed under two main headings; measures taken for “import liberalization” and measures taken for “export promotion”. On the import liberalization side, various radical measures were taken. As a first step stamp duty was reduced from 25% to 1%. Imports regulations were simplified. After such a drastic change in import regime, it was recognized that domestic producers must be protected against unfair competition coming from their foreign rivals. In 1990, new steps were taken. An import guarantee deposit scheme and licensing were entirely phased out. A list called “The List of Imported Goods” (Yulek, 1998) was drawn up; customs duties and Mass Housing Fund levies were consolidated into a single list. It can be claimed that existing import regime in Turkey is more liberal than many developed countries. Residents of foreign countries were free to invest in Turkish private

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37 securities and were making necessary transfers freely and repatriate profits. Also they were free to transfer necessary capital to engage in commercial activities. The banks and other residents in Turkey were free to obtain credits from foreign sources and more. The export of capital was larger than $3 million (Yulek, 1998). The stabilization and structural adjustment program (SSAP) was introduced (Cepni, 2003) in Turkey in January, 1980. This program can be regarded as a turning point in the Turkish economy history. It is possible to divide the 1980’s into two broad phases, roughly separated by the general elections in November 1987. The military took over in September of 1980 to deal with domestic instability, but the military government adapted this program as well. The reform was leaded by Turgut Ozal, who then became deputy minister and minister of economic affairs. The military regime formally ended in November, 1983, following a three-year military regime. Ozal served as president from 1989 until his death in 1993. When Turgut Ozal became Prime Minister, he used many novel ideas in order to integrate Turkey with the rest of the World on an economic basis. The main achievement was the introduction of a free market economy. From that time, the Turkish economy has been constantly growing in size. Agricultural exports had been the boon of economy; however, heavy industry, auto industry and tourism were dominant. The new government took office in December, 1983. The Ozal administration, the first civilian government since the early 1970s to rule without coalition partners, made economic reform its priority. In the 1980s, the Ozal leadership introduced a new political identity, alliance pattern, economic foreign policy, and ethnic policy. The zal leadership reassigned some foreign trade and relations with international institutions. Ozal’s personality and his previous experiences help to understand his ideology which

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38 determined his domestic and foreign policy initiatives. zal destroyed many taboos and established a new system under his control. zal's ideology was a synthesis of technological Westernization and cultural Turkism and Islamism. One part of his ideology was the Ottoman and Islamic culture. The second part was economic and political liberalism. He claimed that modernization could only be achieved through liberalization. He used economic liberalism to achieve political pluralism and visa versa (Ataman, 2002). This champion of privatization chose to “open Turkey to the outside world” by suddenly and radically liberalizing the economy and finance through credits and under the close supervision of the IMF and the World Bank. Turkey soon became an integral part of global economies. Foreign capital began to flow in, especially in credits and through foreign direct investments. Ozal brought to value of the national currency (Turkish Lira) to a realistic level, the Turkish economy became more competitive, and its financial credibility as well as its reserves of foreign currency rose with its booming exports. A reduction in government involvement in production activities, an increased emphasis on market forces, the replacement of an inward-looking strategy with an export-oriented strategy, and an attraction on foreign investment were some of the main policy tools of the new program. the development of an unsustainable domestic debt dynamic the unhealthy structure of the financial sector, with particular problems caused by the state banks and by the failure to address structural problems. Although there are periodical ups and downs in the Turkish economy, there are three main crises that seriously deteriorating the economy seriously. These are 1994 crises, November 2000 and February 2001 (Todaro, 1997) crises.

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39 Turkey is already a fairly open economy, both in terms of trade in goods & services and portfolio flows, especially when adjusted for the size of the economy. Imports and exports combined represent more than 60% of GDP (and rising). Growth of export has been phenomenal over the past decade with exports of goods rising from around 20% of GDP in 1994 to 30% in 2003. With continued economic reform and closer economic integration with the EU, the Turkish economy will become even more open in trade terms, which should benefit efficiency and growth. The major problem is Turkey’s limited openness in terms of foreign direct investment. FDI averaged less than 1% of GDP over the past decade (Aktan, 2002), a dismal performance by any standard. However, EU convergence and increased macroeconomic stability and privatization could help attract substantial FDI over the next few years. The following chapter discusses the methodology being used in the study.

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CHAPTER 3 METHODOLOGY Research Design and Method This study relies on qualitative data collection and generation. Media practitioners’ impressions, ideas, concerns, observation, and knowledge about the development and structure of media in Turkey were collected. Data in this study includes the author’s research notes, logs, journal articles, informal and formal interviews. Selection of media practitioners consisted of several steps. The first was to determine the candidates. In order to represent the whole field, all the media agencies operate in Turkey were determined. Since the total number of agencies is only 12, all were contacted via email followed by phone. Then the selection was made largely based on their willingness and interest to discuss these issues and to reflect on their own experiences. All agencies were willing to participate in the study; however, five of them couldn’t participate due to scheduling conflicts. The list of agencies contacted is given in Table 3-1. The contacts were made at the highest level possible. Seven Media Planning Company CEOs and two Media Managers were interviewed. The interviews were conducted at the companies’ offices so that the interviewees feel comfortable and their staff members could supplement the companies’ archival material. The interviews were conducted face-to-face, which builds a rapport between participants and includes the exchange of nonverbal communication (Frey et al 2000). 40

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41 3-1. Media Agencies in Turkey Agency 1 All Media 2 Carat Media 3 4 5 6 7 8 9 10 11 12 Media Com Medya Hizmetleri Medya Turk Mindshare OMD Starcom The Media Edge Universal McCann Zenith Media Mediamax First, the purpose of the study was explained to the respondents and the process was reviewed before the interview. Release forms were signed by the interviewee including permission to audiotape the interview with the option that the tape could be turned off any time, and confidentiality would be maintained at all times if requested. The chosen format for the interviews was semi-structured and the questions were open-ended. The semi-structured interview format involves a basic set of interview questions that is intended to generate discussion, allowing the interviewee or interviewer to discuss particular issues in depth. Open-ended questions were used because of the ability to provide greater in-depth information than close-ended questions (Frey et. al., 2000). Additionally open-ended questions are “more useful when researchers are exploring a little-understood issue, want unanticipated answers, and are studying respondents who may resent pre-selected answers” (Frey et. al., 2000, p. 100). Since there is little to no previous research on Media Planning in Turkey, the semi-structured format and open ended questions were an appropriate method for research. According to Patton (1990) the dynamics of interviewing are similar to a guided conversation. The interviewer becomes an attentive listener who shapes the process into a

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42 familiar and comfortable form of social engagement a conversation and the quality of the information obtained is largely dependent on the interviewer’s skills and personality. In contrast to a good conversation, however, this type of interview is not intended to be a two-way form of communication and sharing. Since the key to being a good interviewer is being a good listener and questioner, tempting as it may be, I did not put forth my opinions, perceptions, or feelings during the interviews. The interviews were recorded on audiotape and by hand, and any confusion was cleared up through follow-up e-mail correspondences. Names and dates were checked for correct spelling through email correspondence and archival research. Interviews took 60 minutes on average with 40 minutes the shortest and 1 hour 20 minutes the longest. The interviews were conducted in Turkish. Transcription of the raw data includes word-for-word quotations of the participant’s responses as well as the author’s descriptions of participants’ characteristics, enthusiasm, body language, and overall mood during the interview. Notes from the interview were used to identify speakers or to recall comments that are garbled or unclear on the tape. The major advantages of this transcription method are its completeness and the opportunity it affords for the interviewer to remain attentive and focused during the interview (Patton, 1990.) Tapes, transcripts, and translations were stored in a cabinet. After each interview, a transcribed copy was sent to the research participant for verification and approval. There are several objectives for this study. The first one is to examine media practitioners’ perceptions of the rapid development of media planning in Turkey. The second one is to get information that would be useful in understanding the media in

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43 Turkey and the last but not least is to learn media practitioners’ views on the future direction of media and media planning. Data Analysis Method Data coding was done using a method developed by Colaizzi (1978.) But, first the large amount of data was organized using manual methods. The data as recorded were transcribed verbatim for each subject. These transcriptions were subjected to phenomenological analysis using a methodology developed by Colaizzi (1978). The procedural steps used were as follows: All the subjects’ descriptions were read (to gain a feeling for them). Important statements were extracted from each description, phrases and sentences that directly relate to the investigated phenomenon. Statements were eliminated that contained the same or nearly the same statements. Meanings were formulated by spelling out the meaning of each significant statement. In this step, the meanings arrived at must not separate the connection with the original description. The formulations discover and bring out those meanings hidden in the various contexts of the phenomenon that are present in the original descriptions. Clusters of themes were organized from the combined formulated meanings. This allowed for the emergence of themes common to all of the subjects’ descriptions. A detailed description of the phenomenon resulted from the integration of the above results. The detailed description of the phenomenon is as unequivocal a statement of the essential structure of the phenomenon as possible. A final validating step was achieved by returning to the objects and asking if the description formulated validated the original experience.” Research Questions Research Question 1: Examine media practitioners’ perceptions of the rapid development of media planning in Turkey

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44 How did the rapid increase in the number of companies in advertising sector after 1990s affect the media planning process in Turkey? How did Turkish advertising sector adopt and apply Europe and USA standards to Turkish advertising? How did Turkish agencies, which were fairly young, survive the competition from strong foreign competitors? How are the media agencies structured / organized? Are there any differences between Turkish and multinational media agencies’ organizational structures? There are 12 media agencies in Turkey and only two of them are local agencies. The rest of the ten agencies entered Turkey around 1990s. Are they here for good or is this temporary? Research Question 2: Information that would be useful in understanding the media in Turkey How has the major economic crisis in the 1990s affected the development of media? How has the relationship between the creative agency and the media agency evolved? Who provides the secondary research? How do media agencies access that information? What is the correlation between the economy and advertising spending in Turkey? How is media planning done? Which media planning tools (GRP, CPP, CPM) are used by the agencies? Research Question 3: Learn media practitioners’ views on the future direction of media and media planning What cautions should media agencies take for healthy media growth? What are the main problems media agencies facing today in Turkey? What is media planning’s future in Turkey?

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45 The following chapter reports the findings from the interviews. Direct quotes from the interviews will be used to provide a better understanding of the media in Turkey. The methodological consideration for this study has foundations in qualitative research. This chapter summarizes and explains the research methodology utilized in this study. The research was conducted in the form of qualitative research and semi-structured interviews employed to examine Media Planning in Turkey.

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CHAPTER 4 FINDINGS The main purposes of this study were to explore the rapid development of media agencies in Turkey and their structure to understand the media in Turkey and to learn how it is the structured. This study is based on qualitative research. Seven media specialists from the leading media agencies were interviewed to learn about how media planning and buying is done in Turkey today. Particularly, this study examines both multinational and local media agencies in Turkey. This chapter presents the findings of the analyses that resulted from the individual interviews. The raw data from the interviews was organized into conceptual frameworks that represented the major findings on development of media agencies in Turkey. Three themes were identified from the interviews with seven CEOs from the media agencies. The first theme was Media Planning Overview. The second theme was Economic and Politic Facts. The third theme was Problems and Outlook. Under those three themes, several sub-themes were cataloged because they were closely interconnected. Theme 1: Media Planning-Overview The liberalization of foreign trade since the 1980s has caused world brands to enter into Turkish markets. The resultant competitive environment increased the significance of advertising and contributed to the enlargement of the advertising sector. 46

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47 Since the beginning of the 1990s there was a remarkable increase 2 in the number of media agencies in Turkey. In the course of the interviews, two reasons stood in the forefront by the respondents for that increase; “After the 1980s coups, Turkey became a country where the economy was growing very fast; therefore, it got local and national investors’ attention. This attention caused a big competition in the advertising sector; therefore a big progress in marketing business and advertising sector. Clients started investing more money in advertising.” “Besides that, in emerging democratic Turkey, clients started spending more money on advertising. While the private TV and radio stations started broadcasting, new advertising options started becoming available. This gave the advertisers and consumers new alternatives and old “non-advertiser” companies an opportunity to advertise their products. As a result of these two factors, the advertising pie got bigger.” All of the respondents agreed that with the arrival of private channels in 1990, television became the major advertising medium. Its share in the total advertising expenditure increased from 43.72 percent in 1990 to 51 percent in 1992 (atalbas, 2003). The bulk of this increase, however, was shared between large private channels. As it mentioned in Mediacat 3 by Yildiz Dagistani, CEO for Medya Turk “After the introduction of private channels, the meaning of media planning has changed. Also, consumer behavior has changed since there are more TV channels and radio stations now. Advertisers decided to change their strategies as well. Target audiences, Gross Rating Points (GRP), reach, and frequency were considered by media agencies. Media planning was not only buying a spot for the clients anymore”. (Mediacat, 2004) 2 In 1994, Medya Hizmetleri, 1996 Zenith, 1997 Carat, 1999 Starcom, 2000 Mindshare, 2001 Mediacom, 2002 Optimum Media, 1995 Medya Turk opened their first offices as a separate media agencies. This information can be found at http://www.reklamverenlerdernegi.org. Last retrieved 3/10/05. 3 Mediacat is a monthly media planning and advertising magazine published in Turkey.

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48 Since advertising expenditures got higher as compared to before, media agencies became more specialized companies. “Advertising agencies used to be full-service agencies, but after 1995, media departments were separated from the advertising agencies, and they opened as different companies. They became independent after 1995.” The first advertising departments opened in the universities during this time. Is It an Advantage? As the demand increased, it was obvious that existing advertising agencies were not good enough to meet the needs of new companies, so new advertising agencies were opened. Also, some of the multinational advertising agencies (which thought it was not a good idea to open offices in Turkey a couple of years ago) entered the market by acquiring well known companies in Turkey. One of the respondents, who has been in the sector from almost the beginning, mentioned that, “because of the new political and economic environment, Turkey’s advertising sector was having its most attractive time.” By the year 2000, these multinational agencies’ share rate went up to 100% from 50; resulting in more power over the company. Hulusi Derici, CEO of M.A.R.K.A. advertising agency said in Marketing Turkiye that those agencies did not enter Turkey to advertise Turkish products. They followed global products (Marketing Turkiye, 2003a). One respondent also emphasized this topic.“When they first enter the Turkish market, advertising as a profession was taking its modern marketing form, so the new Turkish advertising agencies adopted multinational companies’ structure.” Because multinational agencies entered Turkey, it gave Turkish agencies the opportunity to be aware of any new technology in media planning. This enhanced the quality of work (Marketing Turkiye, 2003b). Because developing markets are always

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49 more active than Western markets, this makes them more attractive (Marketing Turkiye, 2002). There are also some drawbacks of having multinational agencies in Turkey. According to a BBDO Vice President, to keep their current clients, multinational agencies became more “bureaucratic” and it made these companies “spiritless” (Marketing Turkiye, 2003c). Working as a part of a multinational agency made Turkish agencies less likely to seek clients because they were quaranteed enough clients to keep them in business. (Marketing Turliye, 2003d). Are Those Agencies “Stable”? There are optimistic and pessimistic opinions about how stable the media agencies in Turkey are, since they have a very short history. There are 10 multinational and two local media agencies in Turkey, and they are all located in Istanbul. Two years ago, there were four more local media agencies, but because of the powerful multinational agencies, they could not survive. Medya Turk, being one of the two local media agencies now, is trying to endure against giant multinational competitors. They started as a small department in RPM Radar, and by 1995, they were serving as a separate media agency. It was also believed that Medya Turk was planning on acquiring a multinational agency. There are big and small media agencies in Turkey. “The small agencies have no credibility and to be able to stay in the business, these agencies try to get any kind of client with any commission by creating third-class advertisements.” At the same time, because of the competition, the big advertising agencies have a big role in creating an untrustworthy environment in this sector. However, it is predicted that as time passes, the big agencies will start to gain credibility, and in the near future, this insecure atmosphere will be more reliable.

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50 In practice, Turkish media agencies have the same standards as any developed country; however, they also have a lot of problems. Those problems are not only agency related, but also concern the media. All of the CEOs agreed on one of the problems the sector was facing today, and that is the lack of consistency. “Turkey doesn’t have a transparent media sector and that makes all the efforts useless. If it was transparent, everything the media agencies do to improve the practice of media planning would be more appreciated. There is a big gap between the prices on the rate cards and the prices that media agencies are given by either newspapers, or TV and radio.” Media is creating all these problems by offering different prices for its clients without any reasonable cause. “In spite of all the negativeness, it was best for media agencies to separate from the creative agencies.” Media agencies need to be transparent (Mediacat, 2004a), and they need to take advantage of the competitive environment by enlarging the sector. The common belief among the CEOs was that the agencies will not disappear, “they will survive and have more responsibilities in the future.” The reason is the attraction a Western company or product holds in the eyes of the Turkish locale. Turkey adapts to Western cultures very quickly, and their products are trusted. Thus, knowing that a media agency is owned by an international company makes the company more appealing to Turkish clients. According to one of the respondents, “media planning sector is growing very fast. Today almost all multinational agencies have a branch in Turkey. Since the revenues are not changing, this makes the advertising more competitive. Every year, the clients change their advertising agency, and the media planning agencies try to increase their

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51 service quality.”, “media agencies have to have principles, if they can practice these principles, we can call those agencies successful ones.” On the other hand, some of the respondents think that even though media agencies will remain the same, there will be an interesting change. “They will all become local agencies.” The common problem with multinational agencies is that they are either becoming “cumbersome” in nature or they are having problems staying “abreast of the local conditions”. However, this trend is not limited to Turkey ground, but happens in most the developing markets like China and Russia (Marketing Turkiye, 2003d) Media Planning Function As mentioned by Smith (Smith, 2002), around the world, in the late s and through the late s, buying moved into independent media buying companies. In the early s, these companies started to become "full-service media agencies," adding media planning to their service mix. In today’s media world, the client is free to use different creative resources as necessary, with the independent media operation providing the continuity. The media planning and buying function in Turkey also has changed their form from their earlier days like every other country.. Classical media planning and buying is only one of media planning’s functions; accordingly, communication strategy, service strategy, and marketing strategy are some of the functions of media agencies today. Consumers are one of the most important aspects that media planners need to consider. Contemporary advertisers want to connect with the consumer by creating ads, which is the major concern for media planners too. They also try to attract as big a target audience as possible. “If you know your consumer, you will be successful at the end.”

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52 “In the past few years, the media planning function has moved towards the independents, a development that really marks the coming-of-age of the independent media operation. For the longest time the creative agencies held on to media planning with the argument that media planning needed to be partnered with the creative group for true strategic innovation to happen(Smith, 2002)”. Besides changes to its function, there are some changes in relationships between clients and media agencies. Media relationships have proven to be longer than creative relationships. It used to be that agencies rotated creative groups on and off a business in order to keep the thinking fresh. They did so at the behest of the client, who needed to stay with the agency because of the need for media operation continuity. “In today's media world, the client is free to use a number of different creative resources as necessary, with the independent media operation providing the continuity.”(Smith, 2002) The Turkish advertising media market has been focused on both planning and buying, as opposed to their limited buying function before. Not only multinational clients but also local clients are interested in both media planning and buying, clearly stated by four of the respondents “...it is not right to call it only media planning and buying agency, it is also an integrated communication agency”. Importance of Media Planning Agencies Today in Turkey, 65% of the advertisers receive media planning services from an agency. This level is twice as much as it was two years ago. (Aydin, 2004). The importance of media planning agencies is understood and media agencies have gained more respect compared to the past years. “I am already working with a creative agency, why do I need a media agency?” was a question from clients in Turkey 5 years ago. The reason is that advertisers have become more knowledgeable about media planning’s role

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53 in advertising. Today, these media agencies have established an identity separate from the creatives, and are now competing on an individual basis. Turkey is a country where world trends are followed very closely. According to one of the interviewees, “today in Turkey, media planning is practiced much better than in most of the European countries. Especially after introducing the first private TV stations, it was inevitable for Turkish advertising agencies to expand media planning in Turkey.” When comparing the media planning in Turkey and Europe, it is evident that media planning in Turkey is more complicated. The planning process is getting harder for the Turkish media agencies. “Media agencies need new tools to be able to deal with this interesting and complicated environment.” According to a respondent, “analyzing the media planning agencies’ role in advertising will give clients a sound understanding of the media function within the advertising industry, along with the media trends, the analysis of audience research and media alternatives, setting media objectives, and developing effective media plans.” In Turkey, this role is becoming extremely important. “Advertising is an investment,” and, “clients have to be able to obtain the benefits of this investment. That is what media planning’s role should be.” With the increasing comprehension of the role of media planning in the globalized world, media planning departments have become media planning agencies. That’s the new identity for media planning departments. “In the future, in Turkey, media planning agencies will gain more importance and will have more responsibilities.” As compared with the past, the clients’ perception of the advertising agencies is more positive today. “Media agencies have to keep up their good work, and improve it with technology to gain more trust of their clients.” Clients see media agencies as a long

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54 term investment, and because they spend a lot of money on media, they want to know where/how their money is spent (Yurddas, 2003). Thus, media agencies are always under a magnifiying glass. As mentioned before, with the country’s economy picking up after 2001, clients started investing more money in advertising and since most of their spending went to media, they wanted to know how effective their media plans were. This led to the adaptation of the auditing system in May 2003. Thus, Media Audit, as a concept, is fairly new in Turkey. Media Audit and Consultancy, MAC, was brought to Turkey by Murat Ayin, “Our intention is not control if media agencies are doing a right job. We are trying to make sure that clients know how to increase the effectiveness of their media investment” (Marketing Turkiye, 2002). However, its use was limited to some of the international advertisers in Turkey to measure the effectiveness of their media plans. Today it has been adopted by all media agencies. Structure of Media Agencies Media agencies structure has changed from the beginning. It used to be the second step after creating the advertisement (Figure 4-1), however today it is one of the steps taken throughout the communication strategy (Figure 4-2). It is considered as important as creative.

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55 Traditional Role of Media within Marketing 4-1. Traditional Role of Media within Marketing 4-2. Communications and Marketing in the 21st Century Communications and Marketing in the 21 st Century Marketing Research Marketing Strategy Strategic Communications Strategic Implementation Strategy Environment Assessment Consumer Assessment Marketing Objectives Marketing Mix Promotions Price Distribution Product Media Sales Promotion Public Relations Personal Selling Communication Objectives Communication Strategy Creative Marketing Research Marketing Strategy Strategic Implementation Environment Assessment Consumer Assessment Marketing Objectives Marketing Mix Strategy Promotions Price Distribution Product Creative Sales Public Personal Promotion Relations Selling Media

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56 Relationship Between Media Planning and Creative Agencies The relationship between a creative agency and media agency, according to all of the respondents, “depends on the client”. Agencies have two types of clients; the first type is the international companies that the agencies started serving after joining with a multinational agency. The next one is mostly local clients that they earned by competing. Media agencies either work directly with the creative agency from the beginning of the advertising campaign or they only receive the media brief and work with it. In each case, client presentations are made together by the creative agency and media agency. Today, both the creative agencies and the clients appreciate the importance of media planning agencies. They think that the media strategy and the creative strategy have to be the same. Even though clients still need more exposure to the media agencies’ importance and their role in the advertising campaigns, they are more informed than a couple of years ago. According to one of the respondents, “media agencies always have to work with the creative departments. It would not even be a discussion to keep them separate. If we keep them separate, they would not be as successful as they are today”. “Sometimes when a client is looking for a creative agency, they ask their media agency to find the best creatives to work for them”, “and this is an ethical problem in Turkey because creative agencies do not want to be picked by media agencies”. Traditionally and culturally, picking an advertising agency for a client is not appreciated by creative agencies. Usage of Media Tools In 1994 H. Guclu Castaban (Castaban, 1994) did a study on media selection of Turkish advertising agencies. In this study he mentioned that almost 80% of the media plans used TV, followed by newspapers (76.5%), magazines (55.9%), and radio (35.3%).

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57 In the same study, it was mentioned that qualitative factors such as reach, Effective Reach, Total Media Plan Cost, Cost per Thousand (CPM), Cost per Rating Point (CPRP), Gross Rating Point (GRP), Gross Impressions (GI) Frequency Distribution, and Average Frequency were either used by some of the media agencies or not used at all (Table 4-1). The reason for not doing the media weight was the lack of data and expertise. 4-1. Usage of Media Tools Foreign Partner% Local Agency% Reach 91.7 91.7 GRP 90 50 Cost Per Thousand Average Frequency Effective Reach Frequency Distribution Total Media Plan Cost Cost Per Rating Point 100 80 100 100 90 90 75 75 85.7 84.6 92.9 75 In 1994, clients were not really interested in how many GRPs the media plan has yielded (Table 4-2). Mostly clients evaluated the media department’s performance within the overall success of the advertising campaign. They were satisfied if their advertisements were placed in popular TV shows or high circulation newspapers such as Hurriyet, Milliyet, Sabah (Castaban, 1994) 4-2. Media Software Usage by Foreign Partners and Local Agencies Reach and Frequency Analysis Foreign Partner% Local Agency% Program of AGB 100 38.1 Other Computer Packages 46.2 4.8 In-House Computer Programs Non-Computerized Programs 69.2 23.1 9.5 71.4

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58 All of the agencies that were interviewed are using all the above mentioned qualitative factors and are using software. Multinational agencies have the advantage of being included in a network because it is cheaper for them to get the software. They are required to use all the media tools. Medya Turk, one of the two local agencies has had to buy its own software program to do the media plans. They believe this to be one of the biggest disadvantages of not being a part of the media network, “they have to provide their own software which is not as good as the multinational agency’s software.” To be able to compete with its giant competitors, Medya Turk pays special attention to usage of any media tools by them. Multinational agencies have access to the media planning and other ‘know-how’ techniques of their mother companies. They are able to receive technical assistance and training from them. They have a competitive advantage in computerized media and analysis. Research Research expenditure in Turkey was $40 million in 2002 and $80 million in 2003. AGB, TGI, BIAK, RIAK, and Bilesim are available media researches in the Marketplace (Table 4-3). AGB Anadolu installed Turkey’s very first national peoplemeter system in Istanbul in 1989. The data was collected by using diaries from a sample of 150 4 panel households. This was the first Television Audience Measurement in Turkey and it provides television viewing data today. 4 Household in 1990/150, 1991/220, 1992/330, 1993/440, 1994/660, 1995/1060, 1996/1060, 1997/1300, 1998/1630, 1999/1951, 2000/1951, 2001/1951, 2002/1951, 2003/1951, 2004/1951, 2005/2201.

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59 Table 4-3. Available Media Research in the Marketplace Type of Research Function AGB TV Viewership Data TGI Syndicated Target/Product Usage Data BIAK/TNS RIAK/HTP Bilesim International Print Audience Measurement Radio Audience Measurement Competitive Monitoring (TV-Print) In 1992, the clients, advertising agencies, and TV channels came together and founded TIAK 5 , TV Tracking and Research Commission, in order to audit AGB and make it more effective. The English Joint Industry Committee model was adapted to Turkey. Today AGB has 21 6 offices around Turkey, and AGB’s households reached 2201 in 2005, representing 40,613,018 people who are older than five years. Their software are TeleMonitor, which tracks TV viewing behavior, AdPlan, which is based on the past data and predicts TV media planning, and TeleSpot+ which analyzes the advertising campaigns’ reach, GRP, and costs. For the purpose of research, two main databases are used. TGI 7 (Target Group Index) is a single source database. Face to face interviews and surveys are conducted on 5 AGB Users in Turkey today; AdR.kom.tr, Carat Media, Media Maks, The Media Edge, Maxxes Istanbul, Mind Share, Starcom, ATCW, Zenith Media, All Media, Optimum Media, Mediacom, Universal McCann, Media Turk. 6 AGB offices are located in Istanbul, Ankara, Izmir, Bursa, Balikesir, Kocaeli, Denizli, Mugla, Antalya, Konya, Zonguldak, Adana, Antalya, Gaziantep, Kayseri, Malatya, Elazig, Samsun, Trabzon, Erzurum, Van. 7 19 ities are covered, Istanbul, Kocaeli, Bursa, Balikesir, Izmir, Denizli, Kutahya, Antalya, Eskisehir, Ankara, Konya, Adana, Samsun, Diyarbakir, Gaziantep, Trabzon, Malatya, Sanliurfa, Erzurum

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60 20,000 people every three months, and this represents 25,983,144 people aged 15+ in 19 cities and 12 districts. Hane Tuketim Paneli 8 is another single source database used. Surveys conducted on 20,000 people every three months, representing 25,983,144 people aged 15+ in 19 cities and 12 districts. BIAK research provides average issue readership for major newspapers and weekly/ monthly magazines. 9,000 face to face interviews are conducted every three months, on a total of 48,000 people aged 15+ representing 25,983,144 people. For radio, Radio Listenership Measurement System (RIAK 9 ) is used, and it is contracted through HTP. There has not been any specific research for Outdoor (billboards, etc.) so far, although some companies have tried to explore i. Wall (Istanbul networks) company has plans to implement the European research system in Istanbul. Based on the reaction that the company will get from the market, the next phase will be set by Wall. Major outdoor suppliers distribute monthly reports on outdoor investments with detailed information. TGI research provides for Outdoor consumption. Investments data is only available for tactical Outdoor units, billboards and rackets/bus shelters. For Cinema, viewers’ profile is available through Fida Film and TGI. Monthly cinema visits and competitive investments data (Rate cards) are provided by Fida Film 8 12 cities are covered, Istanbul, Bursa, Izmir, Antalya, Kocaeli, Konya, Ankara, Adana, Samsun, Gaziantep, Kayseri, Erzurum 9 21 cities are covered, Istanbul, Ankara, Iazmir, Bursa, Konya, Antalya, Adana, Kayseri, Kocaeli, Mugla, Balikesir, Samsun, Gaziantep, Denizli, Malatya, Eskisehir, Mersin, Zonguldak, Trabzon, Diyarbakir, Erzurum.

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61 and Energy Media. Post analysis of a cinema campaign is limited to the number of tickets that are sold during campaign period. Problems with Research Most of the CEO’s interviewed thought that the data they are receiving from different companies is not enough for them to do their media plans or help their clients to build better business plans. “We are not able to follow the research technology around the world. However, it is not only the media agencies’ problem, but also the client’s, and they need to finance research too”. “Being in the EU will give us the opportunity to follow the technological changes.” When multinational research companies enter Turkey, they also bring their rules with them. In the process, the cultural differences and diversities tend to be underestimated. “Adaptation is necessary” (Marketing Turkiye, 2004c). Most of the research done in Turkey is quantitative in nature. However, there is a need for more qualitative research in this sector “research is about people, we need more qualitative information about consumers.” Today the research industry in Turkey is at a strategic inflection point. Now, more so than ever, the industry feels the need to develop its own way of research. “The future has scope for improvement in research.” Today, the Turkish economy is in a position that would not be effected by Asian and US stock market crises. The word was out by December 17, 2004; EU summit to start accession negotiations with the aim of Turkey’s full EU membership. This provided solid ground for the euphoria in the financial market. Also, the announcement that an agreement had been reached with the IMF on the new three year economic program convinces the businesspeople and the markets that the transformation in the Turkish

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62 economy was sustainable. There are optimistic opinions about Turkey’s economy in the future. Inflation in Turkey is falling and economic stability is increasing, and besides that, it is expected that Turkish Lira, after excluding six zeros, will be appreciated in real terms (Is investment, 2005) Even if Turkey faces any such crises in the future, it will not affect the media market anymore (Marketing Turkiye, 2003a) Media agencies are also having trouble getting data from their clients “even our clients do not have data about their business, and it is hard to try to make media plans without that data.” Theme: 2 Economic and Political Facts Economy Economical changes, crisis, and challenges have a grave impact on the Turkish media sector. “When there is a problem with the economy, the advertising sector is the first to experience investment interruptions.” The first step advertisers take when there is an economic crisis is to reduce the advertising expenditures. “They need to understand that advertising is not ‘wasting money’, it is an ‘investment’” (Mediacat, 2004). Turkey has, in the past, suffered from high levels of macroeconomic instability. Over the last ten years, the average economic growth has been very modest. Sustained economic reform following the 2000-01 economic crises has, however, improved the economic stability and has resulted in significantly higher medium-term economic growth. These crises affect the consumers’ purchasing habits and consequently the media consumption. Thus, during the 2001 crises the media consumption fell by almost 50% of the previous year (Marketing Turkiye, 2004a). “When the economy is well in Turkey, advertising expenditure and purchasing is higher. Economy and advertising sector are two parallel areas where the latter is directly

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63 related to the economy.” The best period for advertising in Turkey was between 1999 and 2000, when advertising spending reached around 1.4 million USD (Mediacat, 2004). After that, following the crises, Turkey’s economy was finally stable. After 2001, the increase in the advertising expenditure was 18%, with a predicted increase of around 20-25% by 2005 (Mediacat, 2004). On the other hand, one of the respondents believed that “just because economy is doing well, it does not mean that advertisers will be willing to allocate more money to advertising”, but she also mentioned that, “if anything, a steady economy at least makes it possible to predict what is going to happen in the second part of the year”, “because the economy is stable, it gives us the opportunity to make long term plans” “Turkish advertising sector is still ‘fragile’. We all know how economic crisis affected the advertising sector in the past. Instead of cutting the budgets, if clients kept advertising during the crises, it would have been more beneficial for them”. Economic crisis carried the advertising sector in a different continuum. After 2001, the clients were called ‘Kings’ by advertising companies, as opposed to the title belonging to the ad agencies before. Because of the strong competition among the advertising agencies, clients had more power to negotiate the prices, tilting the demand and supply balance in their favor. Traditionally, due to ethical reasons, the advertising agencies in Turkey never encroached upon the competitor’s clients. However, because of this environment, now it was okay for them to do so. This corrupted the image of the ad agencies in the eyes of the clients. “Information transfer used to be from agency to the clients, but now, the transfer is from client to the agencies.” Even though agencies have their multinational partners and

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64 they do transfer technology from different countries to Turkey, it is not enough for clients. “Today’s changeable marketing environment has divided target markets into smaller segments, increasing the need for media agencies to do their media planning based on specific target markets”. “Classical media planning is going to be a history.” (Mediacat, 2004) Advertising Expenditures There are 12 media agencies in Turkey right now, and all are members of “Reklamcilar Dernegi” (Advertisers Association). All are located in the biggest city in Turkey, Istanbul. All are using media tools that are used in Western Europe (Mediacat, 2004). The advertising sector in Turkey has the same standards as the European countries but with lower expenditures. Only in a couple of years the sector moved away from its traditional standards to becoming more modernized. With the entry of new companies and the resulting increased competition, Turkish manufacturers were forced to advertise more. Over the last couple of years the Turkish economy has begun to stabilize and its effect on advertising is unquestionable. “The media has started growing rapidly, which have promoted Western-style lifestyles, values, and consumption through private radio and television channel.” (Uray& Burnaz, 2003). Compared with Europe, the average advertising expenditure per person is lower. “In 2003 the ratio between gross advertising expenditure (per) and gross national income (per) is 0.5% in Turkey, whereas the mean ratio is 0.87% in European countries In 1996, the average advertising expenditure per person was $14 in Turkey, whereas it was $197 in Europe. The growth in total expenditure from 1996 to 1997 was 49% in Turkey compared to 4% growth in Europe”

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65 (Uray& Burnaz, 2003). Television, with 54.7% share, is the leading medium in total Turkish advertising expenditures (Table 4-4). The Turkish economy's 2004 growth rate of nine percent was positively reflected in the advertising sector, a fact of particular significance to the media. Total advertising expenditures had reached $1.2 billion in 2004. Mehmet Ali Yalcindag, the chairman of the Dogan Media Group and head of the International Advertising Association (IAA), thinks this figure could reach $1.5 billion in 2005. According to him, there will be a significant increase in advertising expenditures in the upcoming years in line with economic growth. As the economic recovery continues, advertising spending in 2009 is projected to climb to $4.5 billion. He also emphasized Turkey's potential to attract more foreign investors during the European Union (EU) process and asserts that advertisement customers from foreign countries will bring the sector a new intensity. 4-4. January and June 2004Advertising Spending by Media US$ (%) TV 298,482,759 54.7 Print Media 186,275,862 34.1 Outdoor Radio Movie Total 30,275,862 19,310,345 11,517,241 545,862,069 30.6 5.5 3.5 100.0 The recent economic stability has been fruitful and returned to the levels seen four years ago. A 36-percent growth rate was reached in 2004 over 2003. A 30-percent growth rate in the advertising sector in 2005 was anticipated by media specialists. The government says the economy will grow five percent this year. Advertising incomes generally contemplates 3-5 times the state economic development rate. It means we will surpass $1.5 billion in 2005. We will also see $4.5 billion in 2009, because our gross

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66 national product will be around $400 billion. Despite the positive developments, the media sector is concerned about the low expenditures in Turkey. Advertising customers in Turkey spent $1.2 billion in 2004 (Table 4-5) 4-5. Annual Advertising Spending by Media Year Expenditures($MM) 1993 700 1994 375 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 635 770 950 930 925 1,055 540 953 882 1,200 $1.2 billion is very low especially when compared with any European country; for instance, advertising expenditures in Germany by 2004 was with $19 billion, and no need to mention Japan’s advertising expenditures with $38 billion (Table 4-6). Global growth of 5.8% in advertising expenditures to $331.4 billion by the end of 2004 is predicted across the 44 global markets. Turkey’s allocation in advertising in the worldwide is only 0.36 %. It is emphasized by Pinar Kilic (Mediacat, 2004), president of TIAK and BIAK, “To make the work more valuable we do not need to increase the amount of advertising. 4-6. Advertising Expenditures for Some Countries Expenditures (MM$) China 23 Germany 19 Japan UK 38 14

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67 We only need to increase the media prices. The prices are too low. Discounts on media prices are up to 97%” (Table 4-7) 4-7. Advertising Spending by Agency in Turkey Agency Net(MM$) 1 OMD 147 2 Universal 138 3 4 5 6 7 8 9 10 11 12 Mindshare Zenith Media Mediacom MediaEdge Medya Turk All Media Medya Hizmetleri Mediamax Carat Starcom 104 78 56 55 47 36 14 12 8 5 European Union In 2005, Turkey came one step closer to its goal of European Union membership when the European Union’s commissioner for enlargement announced that there were no more obstacles to opening negotiations on accession. While it is not known how long it will take to achieve EU membership (if ever), an often used benchmark is ten years. It was a hot discussion among media specialists if Turkey was ready to join the European Union. “We can make Turkey be perceived differently through individual or team efforts. But the value of the sectors of a country is perceived as equal to the value of the country. I believe the advertising sector has succeeded in reaching the levels of the West, something that many of the other sectors have not been able to achieve.” Many media specialists like Jeffi Medina believe that Turkey’s advertising sector is ready for the European Union. “It is not because we are a sector full of ‘Einsteins’; we have the advantage of keeping up with the West since we are communications based and open to

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68 the West. Today, all of the very prominent and important advertising agencies are already here in Turkey. Consequently, all their foreign technology, know-how, equipment, systems and methods have come along with them to Turkey. The advertising sector is making use of these. The importing of communication methods has become much easier than the importing of an industrial complex. Then naturally we should view the improvements in the sector as normal” (Medina, 2003). When comparing Turkey and Europe, it could be said that the Turkish advertising sector is equal or possibly better in some aspects. “This comparison is done according to the approach to advertisements, the sophistication of handling the issue, vision in a strategic sense and technical solutions. In comparison, I believe our commercials on the Turkish televisions are better than the Greek ones. When compared with Germany, they may seem better in terms of techniques; they have poured a lot more money into it, but I believe ours is much better in terms of its contents. Even though we are regarded as equal or very close to the advertising sectors of the developed countries, we should not forget that the working conditions are not similar to that of the Western countries. The inflationist environment is the primary factor that prevents us from making long-term plans. We entered this vicious cycle of inflation in the 70s so this means we have not been making long-term plans for the past 25 years. Of course we are making plans, but not in Western norms. The environment prevents us from entering a long-term brand creation process. The Western world has therefore had an advantage from the start”(Medina, 2003). The recent rescaling of the Turkish Lira is also a positive development for the sector.

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69 On the other hand, some of the respondents believe that Turkey is not ready for EU membership, “The Turkish media sector is not ready for European Unionin terms of media foundation and staff quality”. The media sector may be ahead of Europe, but some of the rules and practices do not fit the standards the EU is looking for. The respondents think that “some regulations make it impossible to be included in EU. Advertisement prices, rate card practices [since nothing is transparent] are making it harder for the Turkish media sector to be a member of the EU.” Also, some of the media specialists interviewed said that in the past they did some media planning in some developing European countries such as Kazakhstan, Uzbekistan, and Bulgaria. As much as they were pleased with the results of the campaigns, they think that it is not a good idea to continue became they do not really know the advertising environment in mentioned countries. Instead, they usually prefer to find a local company in the country and conduct the campaign throughout the local company. Some of the Turkish companies who are doing business in European countries want their Turkish advertising and media agencies to do their advertising campaigns. Theme 3: Problems and Outlook Problems that Sector is Facing “Advertising sector is developed very fast, that is why it is facing these problems today.” Clients As mentioned earlier, clients in Turkey need to be more educated about the media planning function and its importance. Interviewees were in agreement on the problems caused by clients on many different aspects;

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70 Most of the clients still see media agencies as only media buying agencies “clients are not knowledgeable about media planning function and its importance”. They need to understand and appreciate the importance of media planning. “Clients still think that a media agency takes care of the next step after a creative agency. They need to understand that it is an integrated communication.” Most of the respondents think that “Clients have to evaluate the media planning agencies’ work based on the quality and strategy, not based on prices.” Because clients mostly do not trust media agencies, “clients do not want to sign any agreement with an agency in case they decide to work with another agency. This creates huge stress between the agencies. “Clients mostly complain about the “commission system”. While agency commissions were around 20-25 %, because of the competitive environment now it is around 5-10%. They think that because media agencies want to make a similar amount of money [to what they were making before] they are pursuing the clients to spend more money on media [To solve this problem, they need effective media audit system.]. “Clients think that media agencies are trying to encourage them to spend more money on media so that they could make more money.” They do not also pay the agencies for their presentations, and “ agencies have no problem with that because of the competition.” Media specialists think that “ today’s clients do not have enough experience to run a business. That is what creates most of the client problems.” Also, client profile is different today. “It used to be much easier to work with clients because it was easy to pursue them; today it is more difficult to please them.” Because every big business is a family business now “the “patron’s” daughters and sons are also in the business. It was a one person business in the past, but, today, there are a lot of people involved in the decision making process.”

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71 Research Research is one of the most important tools when talking about media planning. Since the importance of research is understood by today’s media specialists, they want to work with more reliable data. Some of the problems with research were mentioned during interviews; This sector needs more investment “Both media agencies and clients need to invest more money on research.” However, investing more money on research would not solve the problems “Because we do not now how to share the data, we can not use some software programs in Turkey.” Agencies know how to interpret the data, “but there is no qualified staff at the client’s side to evaluate the reports”. When multinational agencies entered Turkey, they also brought their own software. This was great for the advertising agencies, but according to the respondents, this was also a disadvantage in one point of view“multinational agencies bring their own software which they created for different countries and they try to use it in Turkey.” Research is not available for every media in Turkey “There is no GRP, Frequency information for Cinema, radio, or outdoor.” Also, “There is not enough client data.” Expenditures Advertising expenditures are too low in Turkey especially when compared with Europe. “Average advertising expenditure per person is low in Turkey (the main reason for that is low advertising prices).”-“Advertising pie is small and it will stay small. Investments will be limited for a while. ”Also, sector does not need any new media agency because “there are more than enough media agencies.”

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72 Media Media culture, in modern terms, has a short history in Turkey. With this disadvantage, media does not offer its best for its costumers today. Most of the problems the media sector is facing today are caused by media. Media has “Unstable prices”. There are huge differences between the prices on the rate cards and the prices that are given to media agencies;” therefore, the prices are not transparent. That’s why nobody really knows what the real advertising expenditures are. There is no objectivity. No media agency ranking is available from an objective source” Competition There are no rules on competition. “Especially, in last five years, there were a lot of “sales pitches. “Before, when clients were looking for an agency; it was for picking the best one for them. Today they try to get the lowest prices from the agencies. To be able to win a job, agencies give any price clients want.” The most important reason for that is there are a lot of agencies and not enough clients. “There are more advertising agencies than clients. The advertising pie does not feed this crowd.” Another reason for this problem is that “Clients try to minimize the cost and decrease the prices. If their agency does not decrease the prices, they change their agency; therefore media agencies end up decreasing their prices. There is nothing media agencies could do to solve this problem.” The sector is after short term solutions, everybody is trying to save the day. To be able o solve this problem agencies have to cooperate with each other to force the media to standardize its prices since all of them are facing the same problems. Agency commission is another problem “The commission went down to 0% from 25%. This is very dangerous for advertisers. What does 0% commission mean?” There is also no competition between

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73 the media planning and media buying agencies. “Until 1990s, media planning and buying were done by advertising agencies. They were not even charging for creative work.” Clutter on TV is another problem “The clutter is so high especially on TV.” On the other hand, one of the respondents thinks that there is no clutter. “Only the TV “prime time” programs have the “clutter” problem. The only thing that needs to be done is that shortening the commercial break.” The clutter brings another problem “TV stations especially use the clutter as an excuse to increase their prices.” It is believed that advertising campaigns are as not effective as they were before. “Effects of advertising are still not known in Turkey”, and also “Sometimes budget allocations are made by waving their hands [el yordamiyla].”Everybody complains about all the problems mentioned above,” but nobody tries to do something about them.” Future of Media Planning Agencies When asked “What is the future for media agencies in Turkey?” different answers, each with different perspectives were provided. Most of the CEOs were trying to make predictions about the future by giving special attention to the economy. “The currency on the rate cards was US dollar, but because of the YTL, it is going to be Turkish Lira.” Interviewees had optimistic opinions about the economy and its effect on media in the future. “Since our economy is doing fine, we are expecting to see its effects on the advertising sector. Even though clients learned how to deal with crises, we hope we do not have any more economic crises.” According to four respondents, the sector will change its structure in the future. “Media agencies will become more specialized agencies, so they will become smaller.” “Media agencies will become communication planning agencies. Like media agencies, creative agencies will change too. Media planning and buying services will be handled by

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74 separate companies. Media planning, agencies will gain more importance than media buying agencies. Generally, media will lose its importance, TV will be the first one to lose its importance, and there will be fewer advertisements on TV. Product placement will be used more. Some people say that creative agencies and media agencies will start to collaborate, but this is not going to happen.” “Growth of the sector will be more salutary. New advertisers will join the sector in the near future.” Consumers will be more important in the future according to most of the respondents. “Target audiences will not be the same ‘city people’ anymore. They will target mostly suburban people”. “Media agencies will try to communicate with consumers more than they do today.” Being included in EU is another point media specialists talked about during the interviews. “There is almost nothing left in the European media sector we can benefit from since we have the same standards with them, we are not behind them anymore.” “Because of multinational agencies, the Turkish media sector has today’s standards, but their time has ended. The Turkish media sector gained what it is supposed to gain from multinational agencies, and also, clients were educated by these agencies and their cultures in Turkey but the time is over for international agencies in this country, in some point, agencies will become local agencies.” (Marketing Turkiye, 2004b). “Media agencies will become local agencies; there will be no more joint ventures.” (Marketing Turkiye, 2003d) It is also believed that changes will be felt by media agencies and media “sector will create alternate mediums.” “Sponsorship opportunities will grow.” ‘Transparent media prices’ and ‘Incise profit’” are some of media specialists wishes.

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75 “RTUK’s decision to limit advertising breaks will also have effects on advertising sector; There will be new advertisement prices, new rate cards Clients would be the ones who have the biggest advantage from this change, consumer is the second, and advertising sector is the third. Quality of advertising will increase; consumer will have very positive reactions to the advertisements.” Even though most of the CEOs were talking about opportunities Turkey will face in the future, some of them mentioned a couple of unfavourable points; “Bigger companies will acquire the market, and there will be no room for smaller merchants.” “Turkish brands do not have a future. There will be only 10 brands remain.” The following chapter provides a discussion of the results and conclusions of the research. It states the limitations of the study, and makes recommendations for future research.

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CHAPTER 5 DISCUSSION AND CONCLUSION Characteristics of Media Planning in Turkey The main focus of this study is to analyze the evolution of media planning and its current structure in Turkey. This chapter provides a summary of the key research findings and discusses the implications of these findings for future research. Our objectives are; Objective 1: Examine media practitioners’ perceptions of the rapid development of media planning in Turkey. Objective 2: Providing information that would be useful in understanding the media in Turkey. Objective 3: Learn media practitioners’ views on the future direction of media and media planning. After analyzing the interviews held with seven CEOs from the major media planning/buying agencies, three themes were identified: Theme 1: Media Planning-Overview, Theme: 2 Economic and Politic Facts, Theme 3: Problems and Outlook. The interviews conducted with experienced media specialists provided sufficient information to outline the characteristics of the media planning industry in Turkey. Research Question 1: What is the media specialists input regarding rapid development of media planning in Turkey? : Rapid increase in the number of companies in the advertising sector after the 1990s affected the media planning process in Turkey; The development of media planning in Turkey was exceptionally fast due to the globalization of media agencies. Foreign investors have played a big role in the development of media planning and buying in Turkey. 76

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77 Both foreign and domestic investors understood the importance of advertising, and invested money in advertising. Introducing the private TV channels in Turkey has had significant impact on the media sector. Multinational agencies’ positive influence on Turkish investors is unquestionable. Because of the rapid growth, the media planning and buying sector has not stabilized yet and has a number of issues to solve. Even though it was not appreciated before, media planning’s function is understood and appreciated by today’s advertisers in Turkey. Media planning agencies in Turkey have maintained the same standards of business practices as any European country. Research Question 2: Characteristics and Problems of Media sector in Turkey During the last 15 years the advertising industry experienced major changes as international companies entered into the market, acquired local agencies, and formed large advertising organizations. Initially, most of them employed what is known as a full-service agency where the agency offers its clients a full service including planning, creating, and producing the advertising; performing research, and selecting the media. However, with the rapid increase in TV and radio channels, purchasing advertising media became more complex, and the importance of marketing services increased dramatically. The agencies established research departments which gather, analyze, and interpret information that is useful for developing advertising for their clients. Also, media departments have started using software programs to allocate the budget in an effective manner. By the end of the nineties, these departments became separate companies. One provides only creative services and the other handles all other media planning and execution services. The new structure introduced a new set of problems such as communication problems. Also, each company started trying to maximize their profit and

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78 the profit sharing became a problem. In a very short time, a fierce competition among the agencies started. The number of players increased at first but has stabilized over the last five years. However, agencies are still complaining about the vicious competition. One of the most important findings in this study was about the future of local agencies in Turkey. Most of the local media agencies were not able to survive the competition from strong foreign competitors. These companies swept the local agencies out of the picture with their capital and experience which most of the local agencies lacked. The strong recognition of Western companies also played an important role. The biggest local agency is able to survive mostly because of its strong and long term relationship with Toyota. Toyota was their client before the agency separated as a media agency and remained their client through the transition. However, it is likely that this local company will be acquired by a multinational agency in the near future. Multinational agencies brought their experience, capital, and wisdom to the table, and the media sector has learned a lot from them in the last 15 years. Most of the interviewees stated that the advertising spending has not been increasing; therefore, there is no room for a new multinational agency unless it acquires the last two local agencies. Everybody we interviewed was pretty satisfied with the improvement that Turkish advertising has made over the last 15 years. However, they recognized that the rapid development brought serious issues that need to be addressed. The most important one was “nontransparent prices”. Almost all the interviewees complained about this problem. Most media do not even have a rate card, everything is based on primitive negotiations. Advertisers, media, and agencies need to collaborate to prevent inflation of rates. Clients need to convey what their expectations are in terms of prices. Media has to be able to

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79 identify their costs so that they can have rate cards, and explain their prices to the competition. Advertising agencies need to protect their clients’ rights so that they can earn their trust. Communication seems to be the problem among media, clients, and advertising agencies, and it is difficult to have a fair competition in this environment. Agencies should stop working on a commission and they should be paid set prices for their work. This will create a more trusting environment between media agencies and clients in Turkey. All the interviewees mentioned that they use media tools. To use media tools effectively one needs good research which is a fairly new science in Turkey. Most of the research done is only for television. For instance, Turkish media agencies use GRP, CPM, CRPR, Average Frequency, Frequency Distribution, and Effective Reach especially for TV. They have just started using them for Radio. Media planners in Turkey have recently started using research in their media plans. They are aware of the importance of research in media planning. Even though it is fairly young in Turkey, it is believed that there will be more research and research companies. Also, the sector is in need of more “qualitative” research. Media agencies and media now know the importance of research. They need to educate their clients so that they will invest their money in research to generate more dependable data. Major economic crisis in the 1990s affected the development of media. Advertising spending and the economy are correlated. Companies tend to spend more when the economy is good; however, the first expense they cut is advertising when the economy is bad. However, in the future, the affect of the economy on advertising spending is

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80 expected to be limited since the companies are more educated about the importance of advertising. A major focus among the media specialists was to make the advertising pie bigger. It is mostly believed that the Turkish advertising sector was ready for the European Union in terms of technology and practice. Advertising expenditures are low in Turkey when compared with other European countries. The sector does not need more media agencies. Research Question 3: What is the Future of ‘Media agencies’ in Turkey: The future of media agencies seems bright to the media planners. There is still a strong correlation between advertising spending and the economy, however, a stable economy during the last couple of years has made media planners believe that the sector is moving in the right direction. It is predicted that there will still be multinational agencies; however, buying/selling departments will become separate agencies. Also, an increase in the specialized services’ agencies such as direct-response agencies, telemarketing, direct mail, public relations firms, and interactive respond agencies is expected. Currently, the compensation system for the agencies is based on a commission system where the agency receives a special commission. However, due to the aforementioned problems, the sector is slowly moving to the incentive-based compensation where the agency’s ultimate compensation depends on how well it meets predetermined performance goals. A future goal of the media agencies is to provide a system where each agency can be evaluated periodically to measure its dependability.

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81 Limitations The study investigated Turkish media sector by interviewing experienced media specialists. However, since the study focused on media planning, more quantitative data is needed to understand the practice of media planning and buying. This data is difficult to obtain since it is confidential. The focus of the study was to understand the characteristics of media planning in Turkey today. The lack of data, concerning past media planning, made it difficult to compare then and now. Future Research Further research on the practice of media planning and buying would be valuable. It is important to discover how media planning has been handled with limited data. Almost every interviewee complained about their clients’ lack of understanding concerning the importance of media planning and buying, and their distrust of media agencies. Looking at the facts from a client’s perspective would provide an alternative view. Last but not least, a closer look into the media and media vehicles and their function might be useful. Why do they prefer to have nontransparent prices and how does it affect them? Conclusion The objective of this study was to explore the Media Planning, determine its characteristics, point out its problems, and predict its future in Turkey. Turkey is a progressive Islamic country that unites Europe and Asia. Its geographical position gives Turkey advantages in the political arena, but this may no longer matter due to the globalization process. The Middle East loses its importance due

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82 to the globalization process, and it will effect Turkey’s political position in the future. Being the only liberal Muslim country makes Turkey unique. Over the years, Turkey has moved in a more liberal direction; furthermore, it is a country undergoing radical changes, and has been for the last century. The country’s economic structure has also changed making Turkey a great market for global companies. These changes will benefit Turkey when it becomes a member of the EU. It will be one of the poorest EU economies on a per capita basis. However, Turkey’s level of economic development will be comparable. The political and economic impact of EU convergence would be positive, as Turkey would benefit from continued EU supervised reforms, increased economic stability and higher foreign investment flows. Being in EU will change a lot of things in Turkey, and the advertising sector will be one of those areas. Turkey, as a developing country, is trying to catch the European standards in terms of living, service, and technology. Today, the Turkish advertising sector is ahead of many other sectors in terms of adopting and applying the EU and US standards. The advertising sector is fairly new in Turkey, and modern marketing has a very short history. Although the sector is having a lot of problems, the advertising expenditures are increasing, and advertising as a profession is better understood by clients and consumers. It is believed that advertising expenditures will be higher in the future. The sector has come a long way since its beginning. Today, there are award winning advertisements and Turkish advertisements are appreciated by European countries. People, media planners, specialists, etc., who are serving the sector, have a lot of knowledge about the new technologies and media strategies. They are taking

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83 advantage of being part of a multinational company. They are aware of clients’ needs and ensure that they are knowledgeable about the media planning and buying process. It did not take the Turkish advertising sector long to catch up with today’s standards. This gives us a clue about the progression of advertising in Turkey. The sector is in good hands, and although it is facing problems, it will continue to improve. Let’s just watch!

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APPENDIX A CONSENT FORM Dear Mr. / Ms.________________: I am a graduate student at the University of Florida. As part of my thesis, I am conducting an interview, the purpose of which is to learn about how Media Planning developed in Turkey and its structure today. I am asking you to participate in this interview since you are the CEO of a big media agency in Turkey and I would greatly appreciate if you would give me the chance to interview you. Interviewees will be asked to participate in an interview lasting no longer than 1 hour. The schedule of questions is enclosed with this letter. You will not have to answer any question you do not wish to answer. Your interview will be conducted in person at your office after I have received a copy of this signed consent from you in the mail. With your permission I would like to audiotape this interview. Only I will have access to the tape which I will personally transcribe, removing any identifiers during transcription. The tape will then be erased. Your identity will be kept confidential to the extent provided by law and your identity will not be revealed in the final manuscript. There are no anticipated risks, compensation or other direct benefits to you as a participant in this interview. You are free to withdraw your consent to participate and may discontinue your participation in the interview at any time without consequence. If you have any questions about this research protocol, please contact me at (352) 284 9619 or my faculty supervisor, Dr. Joseph Pisani, at 392 7966. Questions or concerns 84

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85 about your rights as a research participant rights may be directed to the UFIRB office, University of Florida, Box 112250, Gainesville, FL 32611; ph (352) 392-0433. Please sign and return this copy of the letter in the enclosed envelope. A second copy is provided for your records. By signing this letter, you give me permission to report your responses anonymously in the final manuscript to be submitted to my faculty supervisor as a part of my course work. I have read the procedure described above for the master thesis interview assignment. I voluntarily agree to participate in the interview and I have received a copy of this description. ____________________________ ___________ Signature of the participant Date I would like to receive a copy of the final "interview" manuscript submitted to the instructor.

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APPENDIX B ADVERTISING REGULATIONS Television: Medical and tobacco products, alcoholic beverages, political propaganda and gambling. Radio: Medical and tobacco products, alcoholic beverages, political propaganda and gambling. Print: Medical and tobacco products. Cinema: Medical and tobacco products, political propaganda and gambling. Outdoor: Medical and tobacco products, alcoholic beverages, political propaganda and gambling. 86

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APPENDIX C TURKEY’S MEMBERSHIPS Turkey is a member of The United Nations The World Trade Organization (WTO) The Organization for Economic Cooperation and Development (OECD) The International Bank of Reconstruction and Development (World BankIBRD) The International Monetary Fund (IMF) The Multilateral Investment Guarantee Agency (MIGA) The Islamic Development Bank The European Bank of Reconstruction and Development (EBRD) The Asian Development Bank The Black Sea Economic Cooperation (BSEC) : Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russian Federation, Turkey and Ukraine The Economic Cooperation Organization (ECO) : Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan The Developing Eight (D-8): Bangladesh, Egypt, Indonasia, Iran, Malaysia, Nigeria, Pakistan and Turkey 87

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BIOGRAPHICAL SKETCH Askin Emir was born on June 20th, 1973, in Istanbul, Turkey. In 1994 she graduated from University in Ankara with a Bachelor of Arts in art history and archeology. She worked as a sales representative for 3 years. Between 1997 and 2000 she worked as a media planner in an advertising agency. She moved to Florida in 2000. She began working as a resident manager at the University of Florida Division of Housing in 2002; and she was still working there in May 2005, when she received her Master of Advertising degree from the University of Florida. 92