S4 plans to break Ukraine

Having built its position on the local market, Kraków-based advertising agency S4 is setting sail abroad. Last August, it started its first subsidiary in the Ukrainian city of Kiev. By the end of 2007 the firm will have launched offices in Romania and Bulgaria. Apart from Eastern Europe, S4 also operates in the UK, providing services for developer Parkridge.

The agency, which was founded in 1998, has cooperated with giants like BP Polska, Danone, Wawel and Philips Polska, among others. Last year its revenues reached zł.21.5 million, up zł.5.8 million from 2005.

S4's vice president, Michał Stanisz, sees strong potential in the Ukrainian market. "We have already developed a solid client base there, featuring Rainbow Tours, Obolon brewery, Bella Trade and the Goodyear Group," he says.

According to data from STB, a Ukrainian TV station, the advertising market in Ukraine is growing by 30 percent annually. Still, the situation in Ukraine differs from Poland's not only in size. "The luxury goods market segment is bigger in Ukraine, especially in Kiev, for example," notes Stanisz. Finding the appropriate cultural approach to marketing is another challenge.

Polish advertising is still a couple of years ahead of its eastern neighbor, says Krzysztof Najder, the CEO of Stratosfera, a strategic marketing consultancy. "Agencies such as S4 may be successful there," he says, but stresses that Eastern European markets will develop rapidly. Therefore S4 needs to act fast to get a decent share of the market.

The firm does have an advantage, though. Both Najder and Stanisz point out that the Polish experience of economic and social transformation may be an advantage in doing business in post-communist countries like Ukraine and Bulgaria.