Advertising Slip Sliding Away

Michael Hedges May 20, 2013 Follow on Twitter

With resigned entente it’s accepted that advertising as media’s primary revenue source is slipping away. Advertising in newspapers and magazines fell to the internet first and fastest, readers attracted more to the web’s cornucopia and media buyers following. Television advertising held steady until viewers strayed, the web offering more, sooner, everywhere. Publishers and broadcasters answered by building paywalls. Then internet advertising began slowing.

Retail advertising remains intertwined with consumer behavior and the digital realm propels both. “The digital business is not only an effective weapon against the economic crisis,” said IAB Poland CEO Wlodzimierz Schmidt, quoted in wirtualnemedia.pl (May 17), “but it is one of the engines driving economic recovery. There is no doubt it is caused by factors that will be identified with the dynamic development of the internet industry in the coming years.”

Internet advertising in Poland in 2012 increased about 10% over the previous year to PLN 2.2 billion, roughly €525 million, reported IAB Poland. Most of that (43%) is static display advertising, the biggest spenders being the financial, automotive and real estate industries. Video ads gained 65% with mobile ad spending up 135%, though from tiny starts. 

The overall digital advertising growth rate, however, slowed last year in Poland. “In 2012 we had the UEFA European Football Championship,” noted IAB Poland research manager Pawel Kolenda, quoted by Rzeczpospolita (May 16). “It was apparent that some advertisers withdrew from the internet due to noise around the football events.” First quarter 2013 figures from IAB Poland show the internet as the only advertising sector growing.

Media buyers like digital platforms for all the obvious reasons. The vast compliment of available web-based ad platforms along with measurement confusion prevents rate inflation. Pressure from ad clients to “be there or be square” drove the internet advertising growth rate for much of the last decade, mostly in hopes of reaching young people – those digital natives – as they are weaned from their parents household budgets.

About 80% of Polish young people aged 15 to 25 years spend five hours a day or more online, according to a UnitedCast survey quoted by mediarun.pl (May 6). Only 13% said they clicked on ads ever. Two-thirds said there’s too much web advertising and it’s too aggressive and intrusive.

“For a long time we’ve seen a general downward trend in interest in advertising among young people,” said internet entrepreneur Daniel Potasz. “To a large extent this is the result of excessive (advertising) and, often, a lack of creativity. Banner ads on the web “may be insufficient,” he suggested, for attracting young people’s attention to a product.

When major media house Agora Group released first quarter 2013 financial results (May 15), posting a slight year on year loss, the company noted ad spending in Poland for the first quarter had declined 7.5% against the same period in 2012. Forecasting for the whole year – guidance, it could be said – the company sees ad spending falling 8.5% against 2012 with newspaper advertising dropping 25%, magazine advertising 16%, television 10.7% and radio off 7.4%. Cinema advertising should be up a tiny bit and internet advertising up 2.5%.

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