This is the third year in a row when the media market has shrunk, with ad spend falling to EUR 316 million, 9 percent below the level of 2009, according to Initiative‘s 2011 Media Fact Book. Figures also suggest that the market will continue its slump this year, dropping to EUR 306 million, while industry insiders hope for green shoots in 2012.
Steve Dallas, managing director at Initiative, shared his view on the market’s continued downfall. “The media market decrease began to temper itself last year, and in 2011 we expect a much lower reduction, of around three percent. Although a lot more advertising space was sold, prices continued to decrease in 2010. All communication channels have been affected and have registered much lower income, except for digital, which, in terms of revenue, is at the same level as print.” The media market is only expected to return to positive territory in 2012, according to Octavian Popescu, Lowe Group vice-president and COO. “Overall, our expectation is that the advertising market will decrease by a small percentage again this year, but with some signs of economic growth appearing and with elections on the horizon next year, we expect it to begin to grow again in 2012.”
TV tops the table
This year, TV consolidated its position on a declining market (increasing its share from 65 percent of net spend in 2009 to 66 percent) after a share decrease in 2008. As the crisis continued, television held onto its status as the favored entertainment source, reported the Fact Book.
“Romania remains a media market dominated by television. TV did not suffer as badly as some of the other traditional media in 2010, and increased its share of overall revenue to 66 percent, but with so much choice in terms of the commercial stations available, combined with an increase in viewing and a further small fall in revenue expected this year, prices will remain under deflationary pressure in 2011,” predicted Popescu.
CME kept its leading position, followed by Intact Group, both in terms of ratings and also sold GRP. These were followed by Realitatea-Catavencu, the public broadcaster’s main station (TVR1) and Dogan Media.
Print press sees the writing on the digital wall
In line with the trend of 2009, the print market continued to suffer from lower advertising outlay and readership, forcing publishers to implement more anti-crisis solutions listed in the Media Fact Book as changing the frequency of publication, massive image changes, promotional offers when buying certain titles and so on, all in an effort to survive.
Compared to the significant 35 percent decrease in reported advertising revenues in 2009, 2010 only brought a 4 percent decrease.
But while the print press has put a brake on its declining trend in terms of budget, due to the anti-crisis measures taken in 2010 (higher discounts, decreased rate cards, bundled offerings, increased share for barter and so on) the net figures are expected to continue decreasing.
Another noticeable effect is the percentage of advertising expenditure moving from newspapers to magazines. In 2009, the ratio was 53 percent versus 47 percent in favor of newspapers while in 2010 it reached 50:50.
Internet grows alone in 2011
The internet reached EUR 26 million in ad spend in 2010, compared to EUR 19 million the year before, and the figure is predicted to grow even further, to EUR 34 million in 2011. However, advertising through this medium is in continuous flux, said Popescu. “The way internet advertising is used by clients is rapidly evolving; it is no longer just about classic display advertising on websites. As the online market continues to develop and mature, the way people are using the internet is changing. This can be witnessed in the explosion of social media in Romania: Facebook now has over 3.2 million Romanian users and the rate of growth shows no sign of slowing down.”
The Media Fact Book reports that internet consumption in Romania is widespread among people over 30, with more than 50 percent of internet users fitting into this category. This is however regarded as typical for emerging markets and similar breakdowns can be found in Asia and Latin America. Specialists expect the maturing trend to continue.In the latest report on the status of the telecommunications market published by ANCOM (the National Association for Communications) in June 2010 and quoted by the Media Fact Book, Romania has a total of 6.25 million broadband connections nationally, up 23 percent against last year.
The increase is thought to be driven largely by mobile connections (mobile internet and smartphones), which now stand at 3.32 million connections, a 36.6 percent increase from June 2009.
According to Media Fact Book experts, 2010 was the year that saw the “rise of smartphones”, as well as the year when mobile marketing became dissociated from just SMS marketing. In 2010, one out of ten mobile phones sold by operators in Romania was a smartphone. This led to a penetration rate for smartphones of nearly 11 percent of total mobile phones.
Some 70 percent of all online marketing budgets is estimated to be spent on awareness campaigns, both traditional or innovative formats. Search Engine Marketing (SEM) continues to grow to 23 percent of ad spend, and social media and others around 7 percent, according to Initiative data.
Increasing internet to herald toppling of television?
In 2011, Initiative expects that TV will slightly decrease its share of the total net market to 65 percent and the internet will become the second most important medium on the market, with 11 percent. The total net ad spend is projected to decrease at a much lower rate than in 2010, with an overall drop of just three percent.
Quoted in this year’s edition of the Media Fact Book, Lucian Croitoru, adviser to the Governor of the National Bank of Romania, stated that “positive growth rates in Q4 2010 and Q1 2011 suggest that the recession is over”, which may also suggest a recovery of the media market.