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.
The advertising industry has already undergone a major transformation, where COVID only accelerated the digital shift, now the war in Ukraine and the consecutive energy and economic crisis have an undeniable effect the industry, meanwhile new technological and regulative changes are further propelling development.
When asked about the next 1-3 years of our industry, weCAN experts all listed the same major trends which will shape the near future. They all highlighted the rise of AI use in advertising: the industry just got a taste of what this tool is capable of, but it will sure shape our work in a big way. As Tünde Bittermann, Client Service Director of Café Communications, Hungary put: “It is important to note that AI may speed up some processes, but it cannot replace real ideas and creativity (for now). It is naive to think that our target groups can/will devote much more time to receiving our messages, so creativity will be even more important, if only for the sake of attracting attention.”
weCAN experts also agree that the ongoing shift to digital channels will only intensify, where first party data will be more important than ever, and personalization will become key in being efficient. Influencer marketing is also staying with us as it’s seen a more authentic and also more adept way to reach target audiences – and also their posts cannot be blocked by ad blocker.
But the technological environment, the geopolitical and economic climate is changing so rapidly, that it’s hard to give predictions even for just a couple years, as Hrvoje Skurla, Owner and Creative Director of Pink Moon, Croatia said: “This change cannot only be related to the crisis. The adjustment that society and the market is currently going through brings us to a situation we have not been in until now (at least our generation) – a completely new set of values is in focus, completely new tools are on the horizon, and we are just at the beginning.”
The aftermath of the pandemic, the current war and the impending crisis has already affected many industries drastically, which of course has an impact on their take on advertising. weCAN experts await bigger changes in this field in the automotive industry: not only the challenges of supply, but the transition to electricity and the new positioning of price categories all account for huge changes in this industry. The banking sector also awaited to undergo a major transformation, with the dramatically high inflation and their ongoing digital shift, consumers have different expectations. The economic environment also heavily influences the FMCG sector, especially food products, but our experts mention the same affect in the real estate/construction sector, along with tourism and hospitality, luxury goods and the entertainment industry.
To remain relevant, advertising agencies need to keep up with the ever-changing environment, one part of which is being cost-effective. Irina Tsekova, Managing Director of Café Communications Sofia summarizes: “Agencies should review the way they budget, minimize costs that are not directly related to teams and optimize the number of experts in areas outside of digital.” One element of this is the already mentioned digital tools. “Digital channels can be more cost-effective, media agencies must ensure that their campaigns are highly targeted and effective. In this way, data and analytics play a crucial role in helping media agencies navigate the challenges of an inflation-driven recession” puts Aleksander Mitrović, Account Director at Ascanius Media Croatia.
Investing in technology goes hand in hand with acquiring new skills, and another aspect of the human element is crucial, building long-relationship with clients, which is based on trust and mutual exchange of information. Ascanius Media Bosnia and Herzegovina Media Director, Nermin Kaljača emphasises the role of agencies: “More information from the Client’s side gives the agency the room not only to provide better advertising services based on the client’s goals, but also to act as an advisor in formulating those same goals.”
These turbulent times bring about changes not only in our work but where, how and who we work with. It’s important to note that the agency sector is evolving regardless of crisis, some periods simply accelerate the evolution, as it became evident with covid and digitalization, as Bojan Popović, Managing Director of Ascanius Media, Slovenia put. Ljiljana Bojanić, Managing Director of Café Communications Belgrade sees the future of agencies in the intersection of the aforementioned expectations: “the agency sector is likely to see continued consolidation and specialization, with a focus on offering unique and differentiated services, leading to more collaborative partnerships with clients.” Weronika Szwarc-Bronikowska, Vice President of Media People, Poland also mentioned that advertising agencies will hopefully act as promoters for ESG strategies and will be guardians of values.