UKRAINE`S ADVERTISING MARKET AMIDST TRANSFORMATION: CURRENT STATE AND DEVELOPMENT TRENDS

In today’s world, advertising is one of the most important tools for business success. This is especially true for Ukraine where the advertising market has changed a lot in recent years because of the war, economic problems and fast digital growth. These changes make it hard to understand the market using only old and general economic methods. The aim of this article is to study the current state and development trends of the Ukrainian advertising market, using both economic and structural analysis. The article uses several research methods: the economic-statistical method to calculate the elasticity of the advertising market in relation to household income (the median of annual elasticities in constant 1999 prices for 2001-2021 as household data after 2021 are unavailable), the comparative method to compare Ukraine’s market with world and European markets and PEST analysis to study political, economic, social and technological factors. The results show that the advertising market reacts more strongly that household consumption to changes in income (the median annual elasticity is 2,83 versus 0,64) and its largest declines coincide with crisis periods. The study also shows that crisis period, such as 2009, 2014, 2020 and 2022, were accompanied by a faster move of advertising budgets from traditional media, such as TV and print to digital channels. The PEST analysis outlines the context of these changes: the war and new media laws, currency devaluation and dependence on foreign platforms such as Google and Meta, changes in consumer behaviour and the growth of new technologies like CTV and programmatic advertising, together with new risks from AI search tools. A comparison with European countries shows that Ukraine follows the same digital trends as other markets but at a much faster speed. The scientific novelty of the article lies in the use of yearly elasticity in constant prices instead of one general correlation coefficient, which makes it possible to trace how the market’s reaction to economic shocks changes from year to year, and in the combination of elasticity analysis with PEST analysis to explain the causes of structural change. The results can be useful for advertisers when they plan budgets during crises, for regulators when they think about the market’s dependence on foreign platforms, and for future researchers who study the Ukrainian advertising market.