Continued Growth on the Advertising Market
The size of the 2017 advertisement cake was HUF 240.98 billion
Budapest, 28 February 2018 – The Hungarian Advertising Association (MRSZ) and its co-associations once again used the Evolution conference to publish their data on the 2017 advertising expenditure. The size of the 2017 ad cake was HUF 240.98 billion, which compared to the previous years’ HUF 216.09 billion constitutes a similar, 11.52% growth. Each segment of the ad cake retained its position from last year, and an increase was noted in all media types.
The ranking of the media types did not change compared to 2016. On-line continues to be the strongest market player, representing 31.71%. Nevertheless, even despite drawbacks, each and every segment realised some growth. The largest increase (18.48%) took place in print, followed by the growth of the internet (14.38%) and the 13.44% expansion of the public domain.
The state became the largest player of the advertising industry already back in 2016, and its role has strengthened ever since. ”If you look at the numbers through an outsiders’ eyes, you will see great results and a healthy market. At the same time you cannot overlook the fact that the state takes more than HUF 40 billion from the ad cake. However, compared to the previous year, we can see higher numbers also in the commercial segment, which gives us good reason to be hopeful, even though current ad expenditures are still below the pre-crisis GDP-proportionate levels . If we can achieve such results under the current unpredictable regulatory environment of the industry and the continuous changes that burden the market, we can clearly conclude that we could realize an even greater development in an environment that is supportive of the industry.”—states Zsolt Urbán, President of the Hungarian Advertising Association. According to the data of the Association, the outstanding 80% increase in state expenditure, the so-called “great state advertising boom” of 2016 was followed by a further 34% growth in 2017 (source: Kantar Media). Compared to 2016, the state spent almost 20% more on television advertising in 2017.
Compared to the national presence, in 2017 the proportion of global players on the digital market grew from the previous year’s 51 to 53%. “We are glad to see that the pace of development has not slowed down, but it is visible that the infuence of global players is growing.”—added Péter Hivatal, member of the board of the Advertising Association.
Background of the ad cake slices with respect to digital advertising, print, direct marketing, public domain marketing, radio and movie theatre advertising:
Regarding digital ad expenditure, István Sopov, president of IAB Hungary pointed out: “Digitalization has continued on the advertising market, which resulted in a 16% growth last year, with advertisers spending some HUF 80 billion. As a reminder, 10 years ago companies were spending only HUF 15 billion on digital advertising. According to the AdExpect survey of IAB Hungary, also 2018 will experience a two-digit expansion.”
Krisztián Kovács, President of the Association of Hungarian Television Broadcasters (MEME) summarized the data describing the television advertising market as follows: "2017 was the fourth year in a row to experience continuous growth on the Hungarian television advertising market. The increase amounted to 7.5%, and exceeded the HUF 60 billion level by HUF 4 billion. With its 25% share television managed to maintain its weight on the total advertising market. It is interesting to note the remarkable expansion of non-spot ad expenditure. Our survey carried out in co-operation with EY has shown that the state continues to be a central marke player, as its television advertising expenditure rose by some 20%, and in 2017 reached HUF 7.5 billion."
Tibor Kovács, President of the Association of Hungarian Newspaper Publishers highlighted that “the Hungarian print media realised an 18.5% growth on the advertising market, thus after many years print media boasts a two-digit expansion again, enhancing last year’s turn of trends, as recent data support an impressive development for 2017.” The ad revenue of the print market was HUF 38.330 billion, whereas revenues from newspaper sales amounted to HUF 59.983 billion in 2017. In addition to print expenditures, pubishers also realised HUF 8.47 billion revenues from on-line advertising. Thus the accumulated total revenue of the print market was HUF 106.783 billion. “The growth results not only from the volume of state expenditure, but also from the rise of market-based, commercial advertising. One of the greatest challenges that different brands face nowadays is where to find appropriate advertising environment. The authenticity of the measurements and the co-operation of the market on which these measurements are based increase trust in advertisers of the print media.”—added Tibor Kovács. The revenue data indicate that print media is a developing segment, supported by several pillars which vouch for its good performance. “It is not by chance that advertisers are turning with more and more openness towards print media. Newspapers and magazines come to occupy a much more important place in the media mix than before, merely due to the fact that customers focus solely on this content when they consume them, and they are not preoccupied with anything else, which is extremely important from the aspect of the reception of the advertisement.”—said Tibor Kovács.
György Huszics, President of the Association of Direct and Interactive Marketing summarised the data of the direct marketing market as follows: “The size of the data driven sector continues to grow: compared to the previous year, with a 3% increase the volume reached HUF 32.8 billion. The expansion echoes international trends. All signs point to the direction that 2018 will bring further growth for the data driven market players.”
Increasing utilization and significant growth characterized the OOH segment in 2017. Bálint Hantosi, OOH President of the Hungarian Advertising Association pointed out: “In 2017 50% of the revenues of the Hungarian OOH market was realized on billboards, but we can observe the onset of a restructuring and levelling also on the domestic market, in line with international trends. The revenues from and the utilization of citylights and other advertising platforms (such as advertisement pillars, ads placed on vehicles and public lighting poles, indoor ads etc.) have grown significantly, compared to the more moderate increase in the revenues and utilization of traditional billboards. Digitalization, which characterizes the international scene has reached also the Hungarian OOH market, and this trend is expected to clearly accelerate over the following years in a way that will likely benefit all market players (advertisers, local governments and media owners).”
András Radetzky, President of the Association of Local Radios said: “The radio market managed to grow even despite the well-known turbulences. Although the industry is very much exposed to media politics, it managed to maintain its position in spite of the ownership restructurings and spectacular litigations it witnessed. The modest growth proves that advertisers continue to have faith in radio. Even in the lack of a national commercial radio station, ad expenditure grew slighly compared to the volumes of previous periods. Part figures indicate that local radios increased by 16% in total, whereas radios in Budapest and the regional networks saw a rise in non-spot expenditure compared to 2016. There was no significant change on the consumer side: radio audiences spend a little more than 4 hours daily, and the total population (15+) almost 3 hours listening to the radio.”
In 2017 ad revenues of the movie theatres continued to grow: the 4% increase shows that more and more advertisers choose cinemas as part of their media mix. The efficiency of cinema advertising results from the fact that the number of audiences has been continuously growing over the past years. Zsuzsanna Kiss, Media Sales Director of Cinema City/New Age Advertising emphasises: “Advertisers decide to spend more and more in cinemas over the past years thanks to the highly successful Hollywood blockbusters that attract crowds to the movie theatres. Last year’s Top 5 list is a good example with movies that please all target groups. Based on the list, between 14 and 31 December 2017 (that is during a 17-day period) together with the pre-screenings, the Star Wars: The Last Jedi attracted 749,326* people into the movie theatres, landing on the first place of the list, followed by the animation GRU3 with 572,117* viewers. We were glad to see a Hungarian movie on the third place: the film Kincsem was seen by 452,257* people in Hungarian cinemas, which shows that Hungarian movies are becoming more and more popular and successful in our movie theatres. Using cinemas as a medium we can target and reach receptive audiences with great affinity, therefore we can increase brand awareness in an uncomparable way that contributes to enhanced ad recall.”
Hungarian Advertising Association
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This year was the 18th time for the Association of Hungarian Advertisers and its co-associations (IAB Hungary, MEME, MLE, DIMSZ, OOH, RAME, HEROE) to set up a joint professional co-operation to collect data on last year’s advertising expenditure. Similarly to previous years, during the data collection for 2017 net-net revenues were added up according to different media types. The goal of the Association of Hungarian Advertisers and its co-associations is to provide data for the market, data that can be used for comparison and analysis. Therefore great emphasis has been given to the application of a consistent methodology in the data collection. Overlaps between different types of expenditure have been filtered out by professional organizations, just like last year, to consolidate the methodology of data recording. For most of the media types the numbers have been derived from audited data. Where no audited data were available, professional organizations provided industry estimates to establish the size of advertising expenditure.
Most of the advertising cake is based on the data collection of professional organizations, similarly to the practice of previous years. The data collection on digital advertising expenditure took place with the contribution of PwC Hungary. The data related to television advertising were processed by EY. Kantar Media contributed to the presentation of the data.