Ivan Pleše (Croatian Association of Digital Publishers): Digital AdEx Provides Complete Insight into Investments in Digital Channels and Formats in the Market

The domestic media market has received its first digital AdEx – a detailed analysis of total investments in digital marketing in the domestic market, based on reported amounts of advertising leases from the largest Croatian publishers, agencies, social networks, and search platforms. The research, conducted in collaboration with the Austrian Momentum and the Ipsos agency, is backed by the Croatian Association of Digital Publishers (HUDI), which, along with its members (more than a hundred media and digital experts), aims to bring order to the domestic digital market and enable normal development. We spoke with its president and Index’s Chief Operating Officer Ivan Pleše about the unique research, work, and plans of HUDI.

What are the goals of the HUDI organization and who are its members?

– The main goal of the Croatian Association of Digital Publishers is to develop the digital media market through research projects and round tables, transferring knowledge through various educational formats, and promoting best practices and business standards for digital media. HUDI, as the leading professional association in the digital media industry, is a central gathering place for that industry, so our members include digital publishers, media agencies, advertising networks, technology platforms, research agencies, and various other participants in the digital advertising market. HUDI was founded by the six largest digital media companies in the market: Index.hr, Styria, Hanza Media, Telegram, RTL, and Nova TV.

What challenges have participants in the digital advertising market (publishers, agencies, advertisers) faced so far? On what data have they based their advertising strategies?

– There are a number of problems in the digital market – from regulatory rules and guidelines that cause more chaos, uncertainty, and ambiguity than benefits, to the lack of quality reviews of market investments, specific market benchmarks, or at least general commercial and technical business standards. All market participants in such an environment are forced to build their strategies and business models on various subjective assessments, with very little concrete and quality data on market movements, while simultaneously competing for budgets with technological giants like Alphabet or Meta.

How has this affected the market?

– The market is currently completely commercial and technically non-standardized and, in many ways, non-transparent, which is a great foundation for cheap short-term strategies of certain participants who, through continuous price reductions of media products, completely unrealistic business conditions, or by using and promoting outdated technology and business models, have been hindering digital progress for decades. The digital market itself is complex and dynamic enough, and the mentioned problems prevent normal development.

How can HUDI help?

– Since its establishment, HUDI has continuously worked on addressing and solving all the problems faced by the Croatian digital media market. This year, we conducted a comprehensive study of marketing investment in digital channels of media leasing, i.e., the digital AdEx study. We also continuously share knowledge and connect our members with various experts in the field of digital advertising, and next year we will intensively focus on standardizing the measurement of portal performance and various regulatory and legislative activities aimed at facilitating operations and increasing revenue for all Croatian publishers. We plan to establish multiple collaborations with various local and global associations and partners from related and complementary industries so that through various educational forms and professional conferences, HUDI becomes an association that brings together companies and individuals who want to work together on market development.

The work of HUDI is divided into several working groups. What are they focused on?

– Currently, there are four active working groups within HUDI. The AdEx working group, in collaboration with local and international experts in the industry, provides estimates of the size of the digital market in Croatia, while the legislative working group reviews all legal decisions related to the operations of entities in the digital market and, in collaboration with relevant state bodies, makes business recommendations. The working group for standardizing the measurement of portal traffic is working on a concept of unified measurement for all portals, and the working group for standardizing advertising formats and measuring campaign effectiveness is focused on defining technical standards and measuring the effectiveness of all media formats and products.

What does the digital AdEx mean for the domestic market?

– The digital AdEx is the first comprehensive study of marketing investment in digital channels of media leasing since the advent of the internet in Croatia. The research is based on accurate advertising amounts from individual publishers and published reports from social networks and search platforms, as well as other business entities participating in digital advertising in the Croatian market (agencies, advertising networks, etc.). The basic methodology was taken from the main research partner, the Austrian agency Momentum, which has been conducting this type of research in Austria for many years and whose methodology has proven to be very accurate after the introduction of the digital tax in Austria, providing concrete insight into all digital spending. This is certainly a departure from research based on estimates from individual digital experts and a step towards objective indicators of total digital advertising. The digital AdEx will provide the domestic market with a complete insight into investments in all digital channels and formats in the market to date, thereby creating the first healthy foundations for a higher quality development of strategies for all market participants.

What is covered by the research?

– All players in digital advertising: Croatian publishers, social platforms, search platforms, and all others with digital investments. In this way, HUDI AdEx encompasses the entire ecosystem of digital advertising in Croatia, regardless of the advertising medium or segment, i.e., type of advertiser. Data collection was done with the help of concrete data from Croatian publishers and media agencies, and for technology platforms, accurately published annual revenue results were used.

What is the value of the domestic digital advertising market according to AdEx?

– The value of the domestic digital advertising market is estimated at 53.9 million euros for 2021. In 2022, a growth of 10.3 percent is expected, but it should be noted that data collection took place between February and April 2022, i.e., at the beginning of the war in Ukraine and before all macroeconomic impacts on advertising were known. A growth of 15 percent is expected in advertising among Croatian publishers, while at the same time, a slowdown in investment growth in social networks and search platforms is observed. The growth of social networks is estimated at nine percent, and for search platforms at eight percent. We also see that initial estimates for 2022 favor publishers compared to technical platforms. This is a promising signal that I believe Croatian publishers will justify in the upcoming period.

What will be the dynamics of the AdEx research and how can publishers support HUDI’s work?

– The HUDI AdEx research will be conducted once a year, in line with other AdEx studies worldwide. The next wave will start as early as the beginning of 2023, and Croatian publishers and agencies can support HUDI’s work and contribute to the research of total advertising investment in Croatia by participating in the research organized with the help of the Austrian agency Momentum and the Ipsos agency from Croatia. The research will certainly progress year by year along with methodological adjustments to the specifics of the local market, but also considering that we expect additional market participants to join the research. We hope to soon start the first discussions with regulatory bodies on the topic of digital tax for technical platforms, which would certainly help us refine that methodology.