Hungary among the top countries

Café Communications [founding partner of weCAN] is soon publishing a comprehensive report about the region’s advertising markets. László Szarvas, the agency’s International Business Development Director answered our questions.

You are going to present the weCAN Ranking in December. What do the numbers reveal? Which countries’ advertising market performs best in the region? 

In economic terms, demonstrated by the GDP and ad spending per capita figures, Central and Eastern Europe is a “two-speed” region. Countries of the Visegrad Four, Slovenia and the Baltic states are stronger, more developed market economies that have diverse advertising markets with highly diversified spending structure. At the same time, however, if we compare the state of their advertising sector to the performance of their entire economy, or the different segments of their advertising sector with each other, we get a more nuanced picture. The size of the advertising market or the volume of ad spending in Serbia, Croatia and Ukraine is much bigger than what the current overall performance of these countries economy would suggest.

The weCAN Ranking, an index based on the GDP per capita and ad spending per capita data, shows that the performance of the advertising industry compared to the entire economy of the Baltic states or certain countries of the Visegrad Four – countries that otherwise have good economic results – is weaker than we might think. Hungary is an exception being the runner-up behind Slovenia in the weCAN Ranking. Apparently, the importance of the advertising industry and its effect on the economy is still very strong here despite the crisis, the advertising tax or the abolishment of media bonuses. This is precisely why it does not make sense to pose more challenges to the advertising and media industry by introducing new legal measures: the weCAN Ranking clearly indicates that a stagnating or barely growing economy combined with a weakening advertising industry is the worst combination with respect to the overall economy.

So it seems the Hungary was not the country hit worst by the crisis. Which countries were shaken most?

The country with the lowest performance in the region is Romania that considerably lags behind both in terms of ad spending figures and spending structure. The Baltic states – Estonia, Latvia and Lithuania – are also badly hit victims of the crisis. The Visegrad Group, however, proved to be resistant: although ad spending declined significantly during the years of the crisis, remaining budgets were optimized so quickly by introducing new tools and channels that many Western-European countries would have been glad to have their results.

Are Central European countries’ performance is still so belittled by Western countries as before?

Probably this view has not faded away completely. The lack of deeper knowledge might result in superficial opinions that lump together all countries in the region, although Central and Eastern European countries’ economic performance is very diverse. For instance, the GDP per capita figure in Slovenia is nearly eight times higher and the ad spending per capita figure is ten times higher than in Ukraine. But Internet penetration is only 11% higher and mobile subscription penetration is even 20% lower in Slovenia than in the other country. The entire Central and Eastern European region belongs to the mainstream of the developed world, so there is nothing to be belittled about it. We can mention results of any of these countries that are in the forefront even at a European level.

Which media perform beyond average?

It is clearly visible that in Hungary and in many other countries of the region online has started to overtake TV and print. This trend of more developed countries has appeared also in the most developed CEE countries. It is extremely interesting how high the rate of mobile spending is in Hungary or that direct marketing is measured and presented within the total ad spending only in Hungary and Estonia. The region’s diversity is also represented by the fact that each country has characteristics that are in the forefront at a regional level. Slovenia has the highest ad spending per capita (EUR 93.81), Serbia has the highest Facebook penetration, and Croats spend the most time watching television (6 hours and 10 minutes per day). Poland has the lowest OOH spending within the total ad spending (5%), Estonia has the highest mobile broadband subscription penetration (97%) and Slovakia has the highest smartphone penetration rate (46%).

By: Krisztián Simon

The interview was originally published in Hungarian in Marketing és Média magazine in December 2015.

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

Related article: Economic and advertising trends in Central and Eastern Europe 

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