The economic aftermath of the past years, especially Russia’s invasion of Ukraine has been harsh in the Central Eastern European region, and as this new crisis unfolds, it has significant effect on consumption habits, therefore on the advertising industry. We asked weCAN agencies how they perceive the current situation, how they see the near future and what can be done by advertising professionals to come out stronger from this crisis.
Russia’s invasion of Ukraine started just over a year ago, inducing suffering in the affected areas, and economic uncertainty, energy crisis and record inflation in the region, just right after when the recovery from the economic effects of the pandemic was in sight.
This crisis has been building more gradually than the shock-like lockdowns of COVID, but it struck financially struggling economies, and the already disrupted supply chains took a heavy hit, companies barely had any reserves to tackle acute problems.
The impacts become gradually visible in the consumers’ shopping carts and might not recover that fast either: Tünde Bittermann, Client Service Director of Café Communications, Hungary said “although everyone seems to accept the substantial price increase, advertisers should be aware that consumption habits may change significantly in the next 1-2 years.” And this might bring about a shift in advertisers’ attitude, but we can’t see it just yet.
Keeping it cool with budgets
This turmoil in the economic environment with rising prices and uncertainty about even short-term changes might influence advertising budgets: when asked about their experience, our partner agencies shared varying attitudes from the client side. Most of them said that budgets are safe (so far), in Ascanius Media Bosnia and Herzegovina Media Director, Nermin Kaljača’s experience, some of their partners even announced they are channelling more money into advertising, but the reason behind that is to cover increased costs. Hrvoje Skurla, Owner and Creative Director of Pink Moon, Croatia emphasises this uncertainty: budgeting for 2023 was delayed by most clients, some of them decided for to do it by quarters as they find it difficult to plan even a year ahead. Bojan Popović, Managing Director of Ascanius Media, Slovenia explained one of the reasons behind this rather chill attitude: “Our clients aren’t panicking as they are aware that in less favourable market conditions it is even more essential to maintain market presence and build a relationship with their target audiences in the long run.”
Aleksander Mitrović, Account Director at Ascanius Media Croatia said clients haven’t changed their set budgets yet, but a shift in their attitude towards spending is visible: “clients are also expecting more value from their budgets […]. They are looking for more transparency, accountability, and efficiency from media agencies. They also expect agencies to help them navigate the complexities of the advertising landscape and offer them innovative solutions that deliver tangible business results.” In Bulgaria, Irina Tsekova, Managing Director of Café Communications Sofia has seen the other end of the scale: clients started to cut their budgets, and started to focus on cost-effective activities.
Finding balance
Agencies also need to balance their resources between keeping their clients and strengthening their bond, and participating in tenders, acquiring new business. Our partners said their priority right now is to provide the highest level of services to their existing clients: many of them mentioned that they now put even more work into developing their quality of work and offering additional services, improving themselves and diversificating their palette. Hrvoje Skurla admitted they also see new territories to venture to: “we are certainly turning to some new challenges, I would say that, like never before, we are looking at completely different types of clients and projects.”
Game of goals
To quote a classic: “Chaos is a ladder”, and weCAN agencies sure see some ways to climb this ladder in these trying times. Many of our partners emphasised the importance building of long-term partnership and trust towards each other, as Ljiljana Bojanić, Managing Director of Café Communications Belgrade, Serbia puts it “building long-term relationships with clients, prioritizing customer service, and emphasizing the value of specialized expertise” is the priority now. Our experts also highlighted the importance of specialization: full service is expensive and many times unnecessary, unique needs require tailored solutions and experts, with deep understanding and fresh knowledge, who can cater to these needs.
Weronika Szwarc-Bronikowska, Vice President of Media People, Poland also adds another layer to this: “We cannot forget about experts who can strategically combine all activities. […] Agencies should strive to build multi-generational teams with specialized experts and be able to effectively combine their competences for the desired results.”
