DETAIL FROM THE CANNUAL REPORT 2017
“Advertising matters for employment, innovation, culture and entertainment, and supports media plurality which is fundamental to democratic freedoms. The benefits are pervasive and run through the fabric of society. Europe without advertising would be poorer, less well informed and less competitive”, explains the study called The economic contribution of advertising in Europe as why the old continent needs the advertising industry. According to the research of Deloitte, each euro spent on ads equals to a 7 EUR plus in the GDP, the ad markets creates 5.8 million workplaces in the EU and it contributes to the fact that Europeans have access to news, entertaining content and communication services cheaper and in a wider selection.
In Central and Eastern Europe as well, it is primarily the economic and political circumstances that determine to what extent can the ad industry work its magic in the society. Local ad markets rank fairly well in an economic sense, since, according to IMF, the economy of the region increased by 1.5% in 2016 and experts predict a 2.2% growth for 2017. The level of unemployment is decreasing, even though it is partly due to the high level of emigration in certain countries, and it contributes to the ageing of local societies and the weakening of economic performance in the long run. The region is still a favorable destination of foreign investors – from mainly the automotive sector – and the taps of EU structural funds were turned on again around the beginning of 2017. However, the experts of IMF believe that it will take a lot more time for the region to fall into line with Western Europe than they thought before 2008.
As compared to the economic changes in the region, the political developments give more reason for concern. According to the Democracy Index of The Economist Intelligence Unit, Central and Eastern Europe performed the worst in implementing electoral processes, pluralism and civil freedoms as well as government management, the participation of society in the political process, and the quality of political culture. At a regional level, the performance of 19 countries deteriorated compared to 2015. Out of the countries examined in the CANnual Report, 12 were labeled as a “flawed democracy”, Ukraine fell into the category of “hybrid regime” and Russia was listed as a “authoritarian regime” by the research unit of The Economist.
In parallel with the erosion of democracy, there is another undergoing political process in the region. The study The State of Populism in Europe 2016 revealed that populist politics are gaining the strongest ground in the Eastern member states of the EU. To such an extent that 6 states from the CEE region (Hungary, Bulgaria, Poland, the Czech Republic, Lithuania and Slovakia) made it to the list of countries where the support of populist parties among likely voters is the highest, besides Cyprus, Greece, Italy and France. Moreover, to quote the research, populist parties rule or are members of the coalition government in the above-mentioned six countries, so the FEPS authors – the think-tank behind the study – believe that the region deserves to be called “the heartland of the surge of right wing populism in Europe”.
Due to its involvement in the media market, the ad industry is in the center of these political turbulences in many countries. Nevertheless, proving its hardiness and undiminished potential to develop, the Central and Eastern European advertising market managed to increase its value from 9.9 billion EUR to 11 billion EUR in one year.
Böbe Barsi, International Communictions Manager, weCAN
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