Analysis of Advertising Markets – On the Way to Recovery

The years of solid growth was disrupted by COVID-19 in Central and Eastern European media markets, causing an 8% i.e. a 1.2-billion-Euro decline in 2020. Besides this setback in budgets, the pandemic accelerated digitalization throughout the region, making online the only segment that could grow during this crisis. In the meantime, the transformation of consumer behavior fundamentally changed the way businesses are expected to turn to their audience.

weCAN, the network of independent advertising agencies of Central and Eastern Europe recently published its 7th annual report called the CANnual Report. The report features the detailed analysis of advertising markets in 15 Central and Eastern European countries with focus on the effects of the COVID-19 pandemic in those markets. Besides compiling extensive data on the development of CEE’s media markets over the past year, weCAN experts draw parallel between the impacts of this recent pandemic-induced crisis and those of earlier critical situations throughout the region such as the economic crisis of 2008, the annexation of Crimea or the Agrokor crisis. The report includes an article by guest author Dr. Mária Törőcsik, an economist and professor at the University of Pécs, who describes the evolution of CEE consumers’ attitudes since 1990.

A region shaken by the virus

The CANnual Report 2021 reveals that the coronavirus stopped a half-decade-long steady growth: the overall ad spending of the region dropped by 8% in 2020, equaling a 1.2-billion-Euro loss compared to the previous year.

Many of the weCAN experts reported that after the initial shock and a freeze of advertising budgets, business had been relatively quickly back on track as campaigns had mostly been postponed not cancelled, or restructured by channeling more money into digital. Businesses had had to adapt to new consumer behavior patterns by moving to online platforms or strengthening their online presence, consequently, digital ad spending grew by 100 million Euros (or 1% YoY), making it the only media type that could have been able to do so in the middle of the crisis.

Thanks to these adjustments, more than half of the CEE-countries experienced just a minor setback or even a slight growth in advertising spending figures. The markets that suffered the least were the ones boasting a strong digital segment like most Visegrad countries, Russia and Ukraine. In Russia, with the most powerful digital market in CEE, figures dropped by 16% in Euro as the Ruble hit an almost five-year low-point. In Ruble, however, the decrease was only 4%.

The average share of the media types reflects that the long-standing trends were accelerated by the pandemic. Television is still the most popular channel (on average) in 15 countries, but looking at the overall ad spending it is notable that advertisers already spent more than half of their budgets online (51%, i.e. 7.12 billion Euros) in 2020, much more than on television (36%, i.e. 4.97 billion Euros). The print segment has been in a significant decline for years, but the pandemic situation ended the stability of outdoor and radio as well – both losing from their average share.

Contrasting state budgets of COVID-communication

The report features a comparison of 6 coutries regarding their government’s spending on “corona-communication” in 2020. These countries represent the vast differences among budgets allocated to informing citizens about security measures (such as curfews and obligations to wear masks), state measures and generally lifting people’s spirit.

The Hungarian Prime Minister’s Office spent altogether 79 million Euros (net) on advertising: more than 75% of it on COVID-related communication, which is a similar percentage to Romania’s. Serbia, Poland and Russia represent the average proportion spent on the fight against the coronavirus, while the CEE-country that proportionally invested the lowest amount in informing its citizens was Slovenia, spending less than 1% of its 10-million-Euro state budget on a sole pandemic-related television campaign.

Escaping forward

Although the COVID-19 pandemic caused a grave decrease in CEE’s ad spending, most weCAN experts agree that markets are recovering much quicker than they have done after the 2008 global crisis. Most of them expect pre-crisis levels of ad spending to be reached and even exceeded already in 2021, in many countries with an estimated YoY growth-rate as high as 10-15%.

The full report can be downloaded from www.wecan.net.

weCAN

University of Pécs

Mária Törőcsik

media markets

digitalization

marketing agencies

analysis of advertising markets

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The CANnual Report 2021

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