Politicians splurge millions on Ukrainian elections

By bne IntelliNews July 17, 2007

Aleksandra Tkachenko in Kyiv -

On July 4, Ukrainian President Viktor Yushchenko gathered a group of the country's richest businessmen together as part of his preparations for the parliamentary elections scheduled for September 30, which have been called as a way to resolve the political crisis that has gripped the country for months.

Yushchenko needs the deep pockets of these businessmen, because this promises to be a short but very expensive campaign. According to the NGO the Committee of Voters of Ukraine (CVU), the five major parties are forecast to spend $80m-$150m for the two-month campaign.

"Due to the shortage of time, the parties will not be touring much, thus the candidates will spend the lion’s share of their campaign budget for advertising in the media, especially on TV," CVU spokesperson Oleksandr Chernenko told bne.

Chernenko reckons that the three largest parties in the race – Prime Minister Viktor Yanukovych's Party of Regions, the Bloc of Yulia Tymoshenko and Yushchenko's Our Ukraine – will together with their allies spend $40m-$70m each on their advertising campaigns.

Such figures would break the amounts spent in the 2006 campaign when, according to the NGO Freedom of Choice, the Party of Regions spent $5m on its campaign, while Bloc of Yulia Tymoshenko’s ad budget was limited to around $400,000. However, these figures underestimate the overall amount, as the parties decentralized their budgets and each item was paid from a separate "pocket." Taking into account the "real" amount spent in 2006, this current campaign is predicted to cost about 20% more than the previous one.

More than his job's worth

One second of nationwide, prime-time advertising costs approximately $300 (eg. on the 1+1 TV channel), which is equivalent to the three-month salary of a school teacher in Ukraine.

Apart from direct advertising, political players will also splash out on so-called "hidden ads," which include stage-managed interviews with candidates and information ad attacks on their opponents. This type of ad is relatively cheap: a "proper" interview at, for example, Inter channel will cost about $50,000. If a politician wants to make a "wholesale" purchase of a channel’s loyalty, it would cost much more.

According to a source at 1+1 channel, the regular appearances of Yulia Tymoshenko on the evening news (twice per week) costs her $150,000 per month. The amount will be paid to the top management, while the journalists who do the "technical job" get a modest remuneration for their intensive involvement.

"In general, all the candidates will have more or less free access to mass media," says Oleksandr Chekmyshev, chairman of the media monitoring NGO Equal Opportunities Committee. "But the more money you have, the more 'equal' access to them you will get."

Largely, this is merely a matter of business, says Chekmyshev. However, in many cases the political preferences of TV channels and other outlets can present a serious obstacle for other campaigners, as these channels sometimes refuse to sell broadcasting time or space for print advertising to those whom they dislike.

The excitement of broadcasters over this new revenue source is easy to understand. In 2006, the total income from commercial advertising was just $390m; the Party of Regions' is going to spend for 60-day campaign is $85m, which is about the same as the entire global advertising budget for Procter & Gamble in a year.

This election has also brought unprecedented opportunities for election advisers, who help develop the campaign strategy for parties, including advertising. Americans are mostly in demand. The Ukrainian business magazine Delo disclosed a "price list" for the intellectual services of these consultants: Yulia Tymoshenko is paying Joe Lockhart (Bill Clinton’s ex-press secretary) $200,000 per month, the Party of Regions is paying US political consultant Paul Manafort) $150,000, while Our Ukraine is splashing out $100,000 per month for Stan Anderson, who used to work with Manafort.

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