Online advertising in first half: dismal first quarter followed by mild rebound

The local online advertising industry had a different performance than most players had expected six months ago. Some of them speak about bloodshed in first quarter. However, things started to warm up to the idea that the market may have found a bottom. Nevertheless, all players say Romanian advertising industry suffered a sharp decline over the past six months of the year.
Online advertising market: chaotic and below 2008

On a media market 35-45% below prior-year period, online advertising slumped by “merely” 20-25% - which is translated into the fact that a higher portion of advertisers’ marketing spending was steered into the online environment, said Mihai Seceleanu (photo), managing director of InternetCorp.

“The negotiation of media spending on TV advertising was completed much later this year, holding back the negotiation of expenditures for other mediums. Clients are now more selective in choosing the websites to go with, preferring to allocate their budgets to top-rated sites that could deliver audience and the expected results. Furthermore, 2009 is the first year of decline in net costs in Romanian digital advertising, as a response to dumping offers from TV, print media and outdoor”, said Mihai Seceleanu (

Orlando Nicoara (, managing director of MediaPro Interactiv said the online ad market had a weak performance, which returned very weak results, with few campaigns and few active clients. According to his estimates, the online advertising industry had a 10-15% decline year-on-year.

Magdalena Zander (, executive director of INTACT Interactive’s sales operations, shares the same opinion. The market suffered a staggering 40% decline year-on–year, as she commented.

For the first quarter, there are players reporting 65% decline. In the second quarter however, the market started to warm up, but failed to outstrip 2008 level”, said Zander.

“If in December ‘08 –January ’09, advertisers said they would increase share in digital ad spend and reduce it in TV ad, the reality wasn’t exactly the way they said it would be. TV stations cut their GRPs to below 100euro/point, and at the end of first quarter, even those companies confident in their good performance started to feel the pinch of a liquidity shortage. It will be interesting to see what happens in July-August when sales reports for Q2 emerge”, said Alex Visa (, managing partener HyperActive.

Biggest market trends

The biggest trends in online advertising market as identified by Cristi Petriceanu, chairman of IAB Romania, are the absence of cash-strapped sectors from the advertising landscape, a higher number of performance campaigns, display campaigns losing share, and hence a war of prices started by providers.

Bogdan Gavrila (, New Media INTACT Media Group said in the first half of the year, the market experienced a deepened battle for budgets between mediums, which gave the winning edge to online over print media and out-of-home advertising.

Advertisers’ marketing directors try by all means to sell their products.

“In general, everybody is focusing on sales and immediate results, and in the digital medium, it triggers a decline in CPM and increase in CPC/CPL or in alternative communication mediums”, said Visa.

In 2008, online advertising market was worth 12.9 billion euros, with a like-for-like growth rate year-on-year of 20%. However, this advance of the industry could be very well replaced in 2009 by a slowdown of the growth pace or even by a decline, according to an annual advertising expenditure survey conducted by IAB Europe and analyzed by PricewaterhouseCoopers.

“In most of the markets, the advertising looked flat or negative in the first half, compared with last year. The monthly results are very unpredictable”, said Alain Heureux, chairman and CEO of IAB Europe.

Among the main trends of the market as identified by the IAB’s CEO are: the use of digital platforms for direct marketing purposes, looking for performances and clicks rather than branding.

“I have also noticed a great creative work from some independent or large creative agencies proving emotions and consumer engagement can be obtained in the digital world”, said Heureux.

As he continued, the year 2009 will be probably flat on the most mature markets in Europe, and still growing in the smaller emerging markets.

We might finish positive by 4-5% if we can prove to advertisers that digital platforms are capable to deliver brand preference, top of mind, share of voice and all other branding metrics” Even if we finish flat, our market share compared to all other media will have grown significantly as they are decreasing, meaning that in many markets we might pass the 15% market share becoming one of Top 3 media”, Alain Heureux added.

The top advertisers in the digital medium in Europe were players in car, insurances, banking, travel, telecom and FMCG which have continued their online ad spending policy despite crisis.

According to the findings of IAB Europe and PwC survey, the countries enjoying the strongest YoY growth rates were Slovenia (77%), Poland (60%), Austria (45%), Finland (34%) and Turkey (33%).

The top ten markets in Europe account for 93% of the total value of the advertising market. The total value of online advertising in 2008 was 72,417,533 lei (19.66 million euros), up 70% year-on-year, according to the recent edition of Romanian Online Advertising Study), carried by IAB Romania and PricewaterhouseCoopers.

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