Investment in advertising in public media in 2021 grew by 12 percent in Croatia, and this year it will grow by another seven percent, thus surpassing 2019 and the time before the coronavirus crisis. This is stated by Rajna Cuculić, director of GroupM Central Europe Zagreb and a member of the Management Board of the Croatian Association of Market Communication Agencies (HURA!), emphasizing that our advertising market continues to follow the movements of the economy and GDP. Available research on investments indicates that offline spending is still primarily on television, accounting for about 65 percent, that outdoor advertising is growing above average driven by the expansion of digital OOH formats (English: out-of-home – outdoor advertising), radio remains stable, while print continues to decline.
Big Offline, Small Online
Estimating online spending, Cuculić says, is extremely difficult, almost impossible, as there is no insight into the financial data of big tech companies for Croatia. At GroupM, based on available information, they estimate that the first five hundred Croatian advertisers in online media will spend about 45 percent of the total budget, of which just over half goes to the media space of large tech companies.
– Large advertisers and brands that can afford well-diversified media plans will continue to allocate about half of their budget through offline media. However, all smaller advertisers will mostly continue to purchase online media space. Therefore, in Croatia, online spending surpasses offline spending. In the past year, we have also noticed a slightly greater interest in influencer marketing, while native advertising is in slight decline. With the development and greater availability of technologies, the share of programmatic buying is increasing. According to a global study by GroupM, many sectors are recording significant growth in advertising revenue, but there is fear of recession. E-commerce-related advertising is increasingly strengthening, but lockdowns related to the coronavirus crisis in China and bottlenecks in the local supply chain, along with the war-torn Ukraine, contributed to the slowdown in growth in the first half of 2022. It is estimated that global inflation will average seven percent, and advertising investments will grow by about 20 percent, both due to inflation and organically. However, this year there is no visible danger for the advertising industry. What we can expect from 2023 will be clearer by the end of this year. We will certainly closely monitor government moves, which will significantly impact our industry. Here, I mean all the increasing efforts to curb the influence of large tech companies and regulate platforms, such as the European Digital Services Act and various initiatives in the United States. A truly uncertain near future – assessed Cuculić.
Recovery of Traditional Media
Compared to the partial paralysis of 2020, which tested both small and large players, the situation has improved, believes Martina Ardalić, account manager at Grizli Communications. Investments, she added, in marketing activities grew during 2021 and are also growing this year. She expects this positive trend to continue, but it will depend on several factors – from the situation with the coronavirus crisis, the introduction of the euro, and inflation to events in Europe and geopolitical tensions.
– With the onset of the coronavirus crisis, budgets were cut wherever possible, OOH drastically fell, as did advertising in print media, but on the other hand, even greater space opened up for digital advertising. Everything was influenced by lockdowns, uncertainty about the development of the situation with the coronavirus, gradual increases in costs from materials to transport, as well as changes in consumer habits. Despite the bleak forecasts and recession, clients are now allocating the same, and some even larger budgets for advertising campaigns compared to 2020, but they are much more cautious in planning, budgeting, and executing activities. We see a recovery in investments in more traditional formats, but it is indisputable that online media will continue to take an increasing share of the pie. At the top of the list of the largest advertisers in Croatia, the same players continue to dominate: telecoms, banks, the automotive industry, retail chains, beauty, and the beer industry – listed Ardalić.
In recent years, there has been an increasing focus on online video platforms, as the way content is displayed and consumed changes, and thus strategies and creativity also change. Certainly, the new generation has influenced the greater use of online content, and brands, she advised, must adapt quickly. She hopes that understanding and using artificial intelligence tools will increase in our market, not just in marketing.
– Analyses worldwide show that spending and budgets for advertising have been growing in recent years, with double-digit growth in global investments mentioned for 2022. The possibility of achieving those estimates in Croatia is not realistic, as we are a smaller market compared to not only the American but also many European Union countries. What is certainly possible is that budgets for digital campaigns will continue to increase in the domestic scene, but traditional forms such as TV, print, and radio will certainly not disappear – assessed Ardalić.
