How to survive on a shrinking market

Whether 2011 was the year in which local advertising agencies took over European creativity festivals, locally, market players had to deal with budgets reshuffling and decreases in prices on the suppliers’ side, as well as a redefining of strategies by media agencies

The 2011 Cannes Festival of Creativity was a Romanian affair, with the local office of BV McCann Erickson winning the first two Grand Prix of the 2011 Cannes Lions Festival of Creativity—in the Promo & Activation and Direct contests—for a sneaky campaign in which it replaced the familiar Romanian flag on the local ROM candy bar with an American flag, sending a country into panic.


With a total of nine ‘lions’ the last two of which were a Titanium – an award given for the best and most innovative idea in the entire festival – and a Gold Lion in the Integrated category, McCann last year set the bar high for any Romanian agency that wanted to impress international audiences.


Later in the year, the same agency scored the Golden Rose – Agency of the Year at the Golden Drum international advertising festival in Portoroz, Slovenia. McCann was awarded for the campaigns it ran for Vodafone (The Wedding, Vodafone Cerebel and Vodafone Chivu) and Kandia Dulce (American Rom).


Creativity was not McCann’s only trump card last year, however, as Universal McCann, the media arm of the advertising group, has regained one of the most coveted after media accounts in Romania: Vodafone.


Estimated at 15 million Euro, the media account for Vodafone, the second telecom operator on the Romanian market and one of the main advertisers in Romania, was handled, from February 2010 until July 2011, by OMD Romania, part of Omnicom, following an international pitch.


The change from McCann to Omnicom was coming after more than ten years in which Vodafone’s media account in Romania (initially Connex on the Romanian market) was handled by Universal McCann.

Omnicom made headlines at the beginning of this year in Romania, as OMD and PHD, part of Omnicom Media Group, and The Group, Romanian communication holding led by Zoltan Szigeti and Mihaela Nicola, forged a partnership through which The Group becomes shareholder in OMD and PHD in Romania.


Given all these changes, how do market players adapt?


An analysis at the beginning of the year by the Romanian Association for Audiences Measurement (ARMA) compared the first nine months of 2011 to the decrease witnessed in the same period of 2010. ARMA experts estimated that by the end of 2011, media investments would only reach half of the value registered in 2008, which was the peak year in Romanian advertising.


According to ARMA, despite the forecast growth for 2012, most market players think this is not the moment to come out with optimistic scenarios. A recovery in the advertising market should come as a direct consequence of improvement in the economic climate, which, at the time did not hint to values close to those registered in 2008. In regards to Romania’s economic situation, forecasts were made based on an official GDP growth of 3.5 per cent, however, should 2012 not bring any improvements to this end, ARMA was still reserved with regards to a favorable prognosis for the advertising market. There were some views about 2012 being a crisis-free year because it is an election year, which could lead to a possible economic recovery, but with the political tumult Romania has witnessed this summer, all bets are off.


On this background, data offered by the Media Fact Book 2012, a product of Initiative Media, put the total media market value at about 309 million Euro, way down from the 2008 peak of 540 million Euro. The Media fact Book shows a media market contraction that marginally continued in 2011, with a decrease of two per cent over the previous year. All media was impacted, except for the online environment, which grew by 30 per cent and is expected to follow the same trend in 2012 as well.


Print was the most affected medium, dropping eight per cent over 2010, followed by OOH (out of home advertising) – minus seven per cent, radio (-five per cent) and TV (- four per cent).


The TV market was the most stable one in 2011, as top media groups hold 70 per cent of the total net market. TV stations organized their sales policies to sell more inventories at a lower price.


In 2011, the dynamic growth of Internet advertising continued and it is expected to keep the same trend in 2012 as well. Social networking sites continue to develop, attracting more and more users, hence a heftier slice of advertising budgets.


As media habits are changing, especially for urban young adults, digital has become the second most important medium for many brands and their preference for online and social media is reflected in their media strategies.




The Media Fact Book says that, being used mostly as a tactical support, Radio has dropped marginally in 2011, losing ad revenue in favor of online and social platforms, which are more engaging and offer a higher flexibility for creative communication.

Last but not least, the print market continued its decreasing trend in 2011 but less dramatically than in previous years. Despite innovative projects created by publishers in an attempt to rejuvenate the print market, circulation and readership fell for almost all publications, several titles moving exclusively online, while others were closed or restructured.


With no audited figures in place at the time the Media Fact Book was printed, the OOH market registered a decline of seven per cent in 2011, with a total spent of 31 million Euro. At the same time, the Cinema market in Romania is defined especially by the number of multiplexes launched along with new shopping malls in Bucharest and other big cities, and where new technologies like digital, 3D and 6D generated an increase in audiences.


The Media Fact Book divides the local media market in 2011 as follows:


               TV: 64.7 per cent

               Internet: 11 per cent

               OOH: 10 per cent

               Radio: 6.5 per cent

               Print: 7.8 per cent