Media in CEE: New Opportunity and New Challenge - Dr. Petra Golja, Dr. Rudolf Bretschneider, GfK Austria

GfK Media Media in CEE, Inma 2008 Vienna Petra Golja, Rudolf Bretschneider 1. October 2008

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GfK. Growth from Knowledge
Media in CEE: New Opportunity and New Challenge
Researcher's Perspective
Dr. Petra Golja, Dr. Rudolf Bretschneider, GfK Austria


Our Business Cards

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Dr. Petra Golja Dr. Rudolf Bretschneider

Head of Media Research at GfK Austria
Consultant of GfK Austria (since 2008)

CEE Media Team Coordinator
Managing Director of GfK Austria

Member of Media Competence Center from 1971 till 2007
in GfK group international
Foundation of 19 CEE GfK Companies

Graduate at University Vienna
Graduate at University Vienna

All print currency systems in Austria
Lector at University of Vienna

Lector at different relevant Institutions
Author of relevant articles, books etc.


THE
agenda 3

1 GfK and CEE

2 Basic Market Facts in general

3 Media market in CEE
4 Position of Newspapers for Top News in CEE
5
Conclusion

1
GfK and CEE
A complete full service market research network


Question to you: Which of these CEE countries … ?
5


What Is CEE: In GfK Terminology CEE Is The Whole Post-Soviet Territory
(inc Austria – the regional hub)
6

CEE in a nutshell:
At the moment 19 countries (inc Russia, Ukraine, Poland, Romania, ex-Czechoslovakia or ex-Yugoslavia)
332 million inhabitants, extremely high market dynamics (GDP growth in some countries above 10%!)


The History of GfK CEE Market Leadership
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Austria 1950 Ukraine 1998

Hungary 1989 Croatia 1999

Poland 1990 Slovenia 2001

Slovakia 1990 EST RUS Serbia 2002
LT
Czechia 1991 LV Bosnia 2004
BY
Russia 1991 PL
KAZ
Kazakhstan 2005
CZ UA
Bulgaria 1994 SK Baltic States 2006
A
H
Romania 1996 SLO
HR
RO Macedonia 2007
BiH
SCG
BG Albania 2008
MK
AL

1.800 GfK employees in 19 countries with 332 Mio people

2 Central and Eastern Europe: Basic Market Facts


The Very First Characteristic of CEE: Speed of Change
9


Justice and retribution is among top10 personal values only in CEE
10

W-EU CEE CZ HU PL RU 1
1 Protecting the family
Protecting the Protecting the Protecting the Protecting the Protecting the 0
family family family family family

2 Honesty Material security Justice Material security Material security Health and fitness

Stable personal Stable personal Stable personal
3 Having fun Justice Material security
relationships relationships relationships

Stable personal
4 Freedom Friendship Friendship Retribution Friendship
relationships

Stable personal
5 Self-reliance Justice Self-reliance Honesty Friendship
relationships

6 Authenticity Self-reliance Health and fitness Authenticity Duty Justice

Personal
7 Friendship Fulfilling work Material security Friendship Retribution
support

8 Material security Health and fitness Retribution Spirituality Honesty Fulfilling work

9 Self-esteem Duty Self-esteem Self-esteem Public image Self-reliance

10 Enjoying life Personal support Duty Justice Freedom Social stability

Source: GfK Roper report RRW 2007 QC1, QC2


Protecting the family is the fundamental personal value for all consumers;
however material security is very important across CEE countries.
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1
Global W-EU CCE CZ HU PL RU
1
Protecting the family 1 1 1 1 1 1 1
Honesty 2 2 13 12 5 8 15
Stable personal relationships 3 3 3 3 15 5 4
Friendship 4 7 4 4 7 4 5
Self-reliance 5 5 6 5 12 11 9
Authenticity 6 6 12 11 6 13 12
Duty 7 12 9 10 21 6 11
Self-esteem 8 9 11 9 9 12 13
Freedom 9 4 19 16 16 10 24
Material security 10 8 2 7 2 2 3

• In Hungary and Poland, material security is the second most important among personal values,
and this is in line with the fact that there is the lowest future economic confidence in these 2
countries.
• Self reliance and authenticity is generally less important for the CEE countries.
• Freedom is less important value in the CEE region compared to either the global or to the
Western-European consumers, while in Russia it is far less important than in other CEE countries.
Source: GfK Roper report


CEE Consumers Are Open to Other Cultures – They Feel Quite Close to
Both US and European Cultures. Good News for Foreign/International
Brands (=Your Advertisers) ...
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Percentage of Consumers who feel close to own national
culture and distant to any other

Source: GfK Roper Reports Worldwide 2007


Has the EU Inspired a Slight Increase in Affinity to European Culture
In The New Entrants?
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Change: 2003-2007
Czech Republic +6pts, Spain +4, France +4,
Germany +3, Poland +2 UK -7pts, Italy -4

% Western European who feel very/ % Central Europeans who feel very/
somewhat close to European culture somewhat close to European culture



Lifestyle and Leisure: In Some Cases, Consumers Are Getting Deeper
Into Work, Leisure Activities, Purchasing
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Relationship with work is changing – fulfillment through work, working hard and
longer working hours
Hungarians TALK about work, Polish people DO work
In the Czech Republic, balance between work and private life

Working on a paid job Being with spouse Being with kids

37,1 hours a week in WE 40,5 hours a week in WE 24,8 hours a week in WE

41,5 hours a week in CEE 27,1 hours a week in CEE 19,6 hours a week in CEE



CEE Has Generally ‘Smaller’ Social Network Compared
To The Rest Of The World.
15

Total Average Size of Social Network

W-EU

Global

CEE



Heterogenity of CEE Is Well Documented by Differences in Brands Perception.
This Has Clear Impact on Pricing and Communication Strategies and Tactics
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Source: GfK Roper Reports Worldwide 2007


In CEE Permanent Avoidance Of Advertisements Is Greater Than In W-EU
17

Source: GfK Roper report RRW07 Core, QI8


Total Population: Estimation and Projection
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Migration, lower birth rate and higher levels of life expectancy lead to shrinking population

Bulgaria

120 Croatia

110 Czech Republic
Population size index

Hungary
100
Poland

90 Romania

Russia
80
Serbia and Montenegro
70
Slovakia
100 = population in 2000
60 Slovenia

2000 2010 2020 2030 Ukraine
Source: UN Population Division/OECD

3 Media in Central and Eastern Europe


Money makes the world go round and advertising expenditures the media.
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Advertising expenditures

TV Radio Newspaper Magazines Internet


TV dominates the advertising budgets, but Print wakes up.
Market shares of advertising expenditures 2007 per 4 traditional media groups 2007, in percentage
Mio € 21

2.397
105
20.900
124
1.791
689
139
306
438
4.455
740
6.249
173
730
283
477
445

Sources: GfK desk research 2008


Advertising expenditures per head indicate level of economy well
Expenditures 2007 in € include: Print, TV, Radio, Outdoor, Online and Cinema
22
in Mio €
2.462
449
1.923
748
4.546
114
749
325
134
6.427
144
287
477
175
486
744



Online advertising expenditures passed even some traditional media
Market share of online advertising in percentage from total advertising spendings, 2007
23
in Mio €
9,5

56,0

125,0

8,4

18,6

4,6

65,0

164,0

10,0

8,3

8,8

2,0



TV usage vary between countries quite a lot
2007/2008
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Sources: Desk research GfK companies 2008, * not available


Daily reach of largest TV-Channel 2007
in percentage
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in Index 1)

97

78

78

76

73

69

64

61

42

28

27

Source: Desk Research by GfK companies, *=2008, 1) Index: Relation between daily reach in total and reach of largest TV-channel


Increasing offer of TV-channels corresponds only particularly with TV-usage
Cable- and Satellite coverage 2007, in percentage
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in percentage
Source: ASTRA Satellite Monitor: Year End 2007; except Estonia / Latvia / Lithuania: Mid Year 2007; Russia: Year End 2006


Radio: Intensive usage, little share in advertising spending as everywhere
27

Source: Desk Research by GfK companies; except: 1) Source: mediaedge:cia - Marketing and Media Pocket Book 2006, *=2008


Daily reach of largest Radio Channel 2007/2008
in percentage
28

Source: Desk Research by GfK companies, *=2008

90
71 80 81
Internet-User
Internet-Nutzer
in Europa 2008
Europe 69
29

59
Adult population
Erwachsene in 58 80 22
percent
Prozent 59
69
USA: 69 16
81
41
65 66
71
49 15
50
60
77 67 42 10
66 39 32
48
31 32
34
46 32 44 32

16 21
46 36
(urban)
Desk research GfK Austria, Austria, Juli 2008
July 2008 Malta 24


Internet at home follows PC at a different speed
Penetration of PC and Internet-Access at home 2008 (2007), in percentage
30

Source: GfK groups, Omnibus 2007/2008


Mobile Phone: Booming Market per excellence
Penetration of Mobile phones 2004 – 2007/2008, in percentage
31

Source: Omnibus and desk research by GfK companies


Where is the paradise for publishers? In Austria, Estonia and Latvia.
Advertising Expenditures: Market Shares Print 2007, in percentage
32

1) Dailies includes quot;other printquot; = print total


Newspaper markets vary enormously between CEE countries
Daily reach of newspapers 2007/2008, in percentage
33

Source: Desk Research by GfK companies; except: 1) Source: mediaedge:cia - Marketing and Media Pocket Book 2006;
2) Cross-National daily newspapers only , *=2008


But the same situation in Western Europe
Daily reach of newspapers 2006, in percentage
34

Quelle: mediaedge:cia - Marketing and Media Pocket Book 2006


Austria must be a strange country
Daily reach of largest (national) newspaper 2007/2008, in percentage
35

Source: Desk Research by GfK companies, *=2008


Magazine's benchmarks are quite similar in all countries.
Reach of largest magazine 2007/2008, in percentage
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Source: Desk Research by GfK companies, *=2008, 1) Eesti Ekspress (no.1 weekly print channel) is weekly newspaper not magazine,
*) Autotouring 26% (ÖAMTC member's journal)


CEE Media Markets - General Trends: Dynamic and change
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 TV, as everywhere, is the most important medium for consumers and
dominates the advertising markets, BUT

 According to the economic and political stage of development all
markets - media and advertising - are dynamic and changing rapidly.
Characteristics are:
 Higher economic standard leads to more products/offers concerning
TV, print and internet.
 Radio stays more or less local.

 Concentration of owners in progress: A few owners offer many
products for TV, Print, Internet (local and foreign players).

Source: Desk Research by GfK companies


CEE Media Markets - General Trends: Booming and competition
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 Privatisation leads to more quot;commercialquot; products
 Traditional media disappear or change their strategy completely
 Traditional Daily newspapers are losing readers
 Free dailies are increasing, free magazines are coming
 Magazine markets are booming; diversification to women,
economic, life style titlesetc.
 Competition becomes harder (all media)
 Competition between internet and print especially
 Media markets seem to overleap some stages of developments
we saw in Western Europe
 In some countries quot;try and errorquot; may be a slogan


CEE Media Markets - Internet: Increasing and overleaping stages
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 Internet is increasing rapidly (usage and advertising) and is forcing
major publishers to offer new Internet portals (news and reports).

 ome
S countries overleap some stages of development quot;print -
internetquot;, we have seen in Western Europe. Tendency to create
interesting internet-offers with interaction for users. Fear of
publishers to lose readers, especially daily newspaper.



CEE Media Markets - Print: Diversification and looking for new strategies
40

Print is a growing sector, trends are:

 ree newspapers and magazines (interesting for advertisers)
F

 Tabloidquot; newspapers (easy consumption, yellow press and quality
quot;
newspapers, quot;Tabloidquot; is a general trend (as in Western Europe)

 iversifications in magazine sector, special magazines like sport,
D
economic, life-style

 omen magazines, different target groups: luxury, ABC-social
W
status (compare women in Austria), home, celebrities etc.

 V-guide magazines (print and internet portals)
T

 trong competition
S



CEE Media Markets – Print: Countries specifics
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 Beside the specific and historical conditions of each country, 5 regions in
CEE may be identified regarding the print sector:
 Three Baltic countries: Strong, increasing advertising market in general,
good position of print (dailies too) and internet (Estonia!)
 Hungary, Czech, Slovakia, Slovenia: Quite well-positioned print sector
regarding advertising, dailies, magazines, political / independent
 Romania, Poland: Increasing print markets with large numbers of titles,
focus on magazines (fragmentation to women, business, life style
etc.) - quot;try and errorquot;
 Russia, Ukraine: Weak market of dailies, focus on magazines

 Bulgaria, Bosnia: Weak print market, but in movement (magazines in
Bulgaria)


4 Position of Newspapers for Top News in CEE


Question to you: 3 most relevant Media channels for Top News in …
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Question to you: 3 most relevant Media channels for Top News in …
44

2 3 2

1 1 1
3 2
3


No News: TV is the most important media channel for Top News
3 most important …
45

Index*)

2,8

2,8

2,5

2,0

2,4

2,6

2,2

2,1

Sources: Omnibus, GfK CEE-companies 2008, *) average numbers of answers (out of maximum of 3, aided)


Internet-usage changes quot;more or lessquot; relevance of media channels for Top News
4 main media groups, in percentages

46

Sources: Omnibus, GfK CEE-companies 2008



47




48



Half of Internet-users in CEE say web use has affected their
consumption of traditional formats
% distribution of how online media users consume traditional forms compared with the past
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Source: GfK Roper report RRW07 Core, QI6


General trends
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Speed of change

Basic values are the same everywhere

Consumers becoming similar and

national differences (still) exist

Think quot;glocalquot;


Media market trends
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Dynamic and change

Overleaping of stages (we saw in Western Europe)

Diversification combined with quot;try and errorquot;

Print market: In- and Decreasing at the same time

Potential and hard competition

Thank you for your attention and we wish you
successful growth with market research all over the world.

Media in CEE: New Opportunity and New Challenge - Dr. Petra Golja, Dr. Rudolf Bretschneider, GfK Austria

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