Before we talk about
ID Fabrika I would like to talk to you more generally
about advertising in Russia. Could you give us a
assessment on the state of the advertising sector
in Russia, and how good Russian companies are in
branding?
(Mr. Erickson)
Regarding the current state of affairs within
the advertising industry, a primary component
to understand is that the Russian market is currently
experiencing a growth rate which has been developing
consistently since the pitfall of late '98 when
the market suffered a severe financial correction.
Currently we see this consistency continuing from
our clients in the form of ever-increasing budgets
for their brand development activities. In regards
to the current level of branding ability Russian
businesses offer, we see only a limited number
of agencies currently providing branding services
which are on par with the market's expectations.
A key goal for ID Fabrika is to break away from
the few existing agencies that do exist and to
establish ourselves as a leader in the field by
attracting clients who are looking for unique
and creative talent, both strategically and in
execution, to develop their brand identities.
(Mr. Koscheev)
What is also important to mention is that our
client's expenditures are now extremely high and
their competition is getting extremely tough.
This is why you cannot just simply advertise.
You have to create brands which communicate to
the consumer through emotional appeal, not just
to be pushy, not just to make people buy, but
to allow them the ability to have options and
alternatives and to ultimately assess and make
decisions naturally. This approach is very difficult
to implement and represents a new era for marketing
in this country. If you look at the branding business
from the view point of advertising agencies, there
are only a few agencies in this market which offer
branding as a service. The majority of agencies
are now beginning to rely on third party or sister
business to provide this particular service. You
cannot just simply satisfy the consumer's needs
through promoting the product's attributes, what
you have to do is to discover the consumer's insight,
to recognize what feelings they have inside and
to try and reach them emotionally through the
brands persona. That's what we are trying to specialize
in, not just simply create the product itself,
no, the product is there, what we want ultimately
produce is a personal dialogue between the consumer
and product. That is our mission.
Before we move on to details can you explain ID
Fabrika as a company, and about your development?
(Mr. Erickson)
We are a new company, a design company by nature,
offering the ability to create visual identities
for what we define as either the consumer or corporate
audience. Consumer audience correlates to brand
identities which are ultimately implemented into
the packaging of goods and services. Corporate
audience refers to the development of an organization's
identity, or corporate identity, which is meant
to define and reinforce the organization's fundamental
characteristics. Although we are a young business,
due to our partnership with McCann WorldGroup
we have succeeded in developing a strong relationship
with a number of multinational companies involved
in the development of new brands for the Russian
market. Our activity in corporate identity development
tends to be oriented more towards Russian businesses.
Where do you expect the majority of your revenue
to come from, corporate identity projects or consumer
related ones?
(Mr. Erickson)
For now the two services seem to be evenly split
in terms of revenue. Although branding budgets
tend to be larger in nature due to the extent
of our involvement and time required, clients
requiring design services for corporate ID development
tend to be more plentiful. Long-term we see the
majority of our revenue coming from our branding
activity, so this is where we'll proceed to build
from now that a fundamental client base has been
established.
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(Mr. Koscheev)
I agree that our branding activity will ultimately
be our primary focus and revenue generator. Branding
has become a primary element in marketing worldwide.
There are hundreds of brands appearing monthly
in markets such as the United States, and this
is happening to some extent in Russia as well.
Clients are beginning to understand that branding
has become to be known as an extremely important
marketing tool for their business. We believe
a company's understanding towards this way of
marketing makes them a primary target for our
new business activity. We are looking to do business
with companies who realize the value of branding
and are able to recognize the competitive benefits.
There is still a long way to go in educating this
market on branding, so obtaining access to the
key decision makers on the client side is our
primary objective in order to achieve this.
What role does creativity play in the functioning
of your business?
(Mr. Erickson)
Ultimately this needs to be our fundamental strength,
not only in terms of creative execution, but also
in terms of how we approach research and planning
as well. Due to my experience stemming from a
creative background in design, I am consistently
trying to reinforce the attitude internally, and
to clients alike, that our creative ability represents
our primary strength.
(Mr. Koscheev)
My perception is that we are a nation which is
not interested in being sold to, we really look
to obtain the explanation from ourselves through
creativity. We are not in the habit of being pushed
or instructed to like an idea. We prefer by nature
to receive information, digest it, assess it and
make an independent decision. On top of being
right or wrong, it is a personal decision. It
is important to us as consumers to have food for
thought, because instruction is not the right
way for us. Creativity is the key approach to
generating emotional appeal, and it is this appeal
which creates the personal dialogue between consumer
and brand.
Western businesses are obviously here in Russia
and they using advertising to build their brands
here. You have your own experience as a team and
you are a local company. How can ID Fabrika help
Western companies coming to Russia, and what advice
would you give to the companies interested in
entering this market?
(Mr. Erickson)
We see ourselves as a one of the fundamental tools
they will ultimately require for marketing their
goods and services successfully long term. We
provide the resources to assess the particular
market and category, the talent to decipher the
research and define a strategy which is based
on the consumer's needs and product's benefits,
and to ultimately create the identity which visually
defines the brand. My advice would be to source
a branding service which has recognizable creative
talent, the technical ability to manage the implementation
through to its launch, understands the importance
of the turnover phase to above-the-line activity,
and will take the responsibility of acting as
the brand's keeper long term.
Now that our readers have a better understanding
of your company, could you provide us with some
detail regarding to your professional backgrounds?
(Mr. Erickson)
We have a combination of international and local
market experience, so we believe we have a good
understanding of the concerns clients coming to
this market have. For me, my interest in working
in the international arena traces back to my education.
I attended college in Canada, so this was my first
experience in understanding international design
and the challenge it offers. My first opportunity
to work abroad was Poland in 1994, when I registered
my own legal entity. It was during this period
that I began to understand the correlation between
marketing and the role traditional graphic design
played in the development of brand identities.
Russia has been a similar experience, in terms
of the rapid development of local goods and services,
so ID Fabrika to some extent is an extension of
my previous business.
(Mr. Koscheev)
The combination of our international experience
and various professional backgrounds provides
us with a diverse range of tools to assess our
clients needs. My initial background was in foreign
languages where I specialized in English and French.
My professional career has been focused on marketing,
first working with Philip Morris as a Marketing
Executive and then moving to Swedish Match company
as Marketing Manager. After Swedish Match I was
then a Marketing Director at Liggett-Ducat heading
their marketing department. After Liggett-Ducat
I directed my own branding consultancy business
for a time before joining ID Fabrika in mid 2002
as Brand Development Director.
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