Diversity within Unity: the Advertising Market of the Visegrad Region

The first thing to notice when observing Visegrad Four is that they rank very high within the region under the scrutiny of the CANnual Report: they take place at the top half of the list of the fourteen countries in almost all respects. We can draw two conclusions based on these rankings: although the sub-region’s countries are more or less at the same level, the Czech Republic stands out considering the GDP per capita and ad spending per capita figures as well as the Human Development Index (HDI), an indicator that compares countries based on life expectancy, literacy, education and standard of living.

The Czech Republic ranks as second within the entire CEE region in respect of almost every index, overtaken by Slovenia only in most cases, and by Slovenia and Estonia regarding GDP per capita figures. It implies that the Czech Republic has a high ranking within weCAN Ranking as well: it is the third of the fourteen countries, competing head-to-head with Hungary of the second place.

The other three countries – that are very similar to each other regarding their performance – slightly lag behind the Czech Republic. The only index that shows a different picture is weCAN Ranking. In this ranking, Hungary overtakes the Czech Republic, while Poland takes the fifth place and Slovakia the tenth. This means that the advertising sector’s influence within the entire economy is larger in the Czech Republic, Hungary and Poland than in Slovakia.

Whichever way we look at the data, it is clear that the Visegrad Four belongs to the most developed countries within the region studied by the CANnual Report.

Television’s dominance eroding

The distribution between old and new media of a country’s total ad spending reveals a great deal about the development of the advertising economy when compared to overall European or global trends. Due to the growth of the online segment, the dominance of television and print media that had absorbed the greatest part of ad spending for decades, has vanished in the last 15 years. In the most developed advertising markets, online ad spending does not only reach the level of TV but even exceeds it. At the end of the 2000s, the trend was set back by the bursting of the dot-com bubble, but by the end of the decade, it was significantly accelerated by the economic crisis that shifted advertising spending towards smaller budgets and better efficiency.

In response to this process, TV and print companies created new themes, addressing smaller and smaller target audiences. It is no accident that there are over 100 native-language TV-channels in Hungary.

According to the CANnual Report, the larger the share of online within total ad spending, the more developed the advertising market is. Based on this assumption, Visegrad Region is the sub-region within Central and Eastern Europe that is closest to Western trends. These four countries top the list of online spending (both in terms of nominal spending and online’s share in the total figures), and three of them has a high ranking in terms of Internet penetration as well. The Czech Republic stands out with its 82% figure – which is the highest national rate in Central and Eastern Europe –, while 75% of the Polish and 73% of the Hungarian population have access to Internet. With the exception of Slovakia (with 69%), all Visegrad countries are above the regional average of 71%.

In accordance with this tendency, the Czech Republic has the lowest share of TV of the total ad spending within the entire region: television’s share is only 29%, which is far below the regional average of 45%, similar to Hungary, where TV’s share is only 31%. Poland and Slovakia (with 47% and 46%, respectively) are still among the lowest TV spenders in Central and Eastern Europe. All these data reveal that in the Visegrad countries, online is taking over television, which means that they are more similar to Western advertising markets than other countries of the region.

Other traditional platforms

It is worth taking a look at the ad spending of other media types, too. Regarding the share of radio, print and OOH, Visegrad countries’ figures are in line with or below the regional average. It must be noted that Poland has the lowest share of OOH and print ad spending in the entire region; while radio, which has the fourth highest share within the total spending in the local market, held a strong position with a growth rate of 5% in 2014.

Print on the decline

Print’s share within the total ad spending has been declining in all countries – including the Czech Republic and Hungary – during the last years. In the Czech Republic, the two types of weekly mediums that could avoid collapsing and even managed to have a slight increase were TV program guides and gastro magazines. The volume of print runs of dailies has, on the contrary, fallen by an average of 25% since 2008. Print market is undergoing a slow but constant decline in Slovakia as well. Thus, publishing houses try to recover the revenues they lost in print formats by going online. By now, all major dailies have developed their successful online news services.

In general, Polish print market has shrunk, however, there are still examples of publishers trying to find niche markets and launch new titles. In 2014, in terms of sold copies, the majority of press media reported more than 10 percent of decrease. On the other hand, in April 2015, two major marketers introduced their new weekly tabloids in taut competition with each other. Riding on the wave of the popularity of themes such as culinary and fitness, Burda has launched three magazines at the turn of 2014 and 2015. Bauer also expanded its portfolio of popular women’s magazines.

So it would be a mistake to declare that print is completely dead. The above examples present that targeting a specific audience based on gender, age or field of interest can still bring in good results.

Mobile and e-commerce

Regarding mobile broadband penetration, the region is much more heterogeneous. The regional average is 56%, which means that one out of two people has a mobile internet subscription and a smartphone. Slovakia and Poland are in line with the regional average, while the Czech Republic is slightly above it, and Hungary is well below. It is interesting, as Hungary is the country where iPhone has the highest share among mobile devices within the Visegrad Region. (Considering the entire CEE region, the country with the highest rate of Apple users is Russia, where more than half of smartphone users have an iPhone.)

As for the popularity of e-commerce, Visegrad countries are in the top 5 of Central and Eastern Europe. The first country is Estonia, where 76% of Internet users buy goods and services online, followed closely by Poland and the Czech Republic. The fourth and fifth places have been taken by Slovakia and Hungary with high figures also.

All data and international index presented in the CANnual Report as well as weCAN Ranking demonstrate that Visegrad Four, this more or less coherent but still diverse area, stands closest to Western and global trends with respect to the development of their advertising market in Central and Eastern Europe.

 

Highlights

Hungary has the highest share of mobile advertising spending within the total online ad spending: 10%

In Poland, 71% of users utilize the Internet for online banking – more than in any other country in the region.

Slovakia has the highest smartphone penetration rate: 46%

The Czech Republic has the highest Internet penetration within the region: 82%

 

The article was originally published in Hungarian in Marketing és Média magazine in February 2016.

For more information on the advertising markets of Central and Eastern Europe download the CANnual Report 2015 for free.

 

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