Ad-spending figures not as good as they look, agencies say
Amer Nielsen Research (ANR) reported two weeks ago that advertising spending as a whole was $273.4 million for the first three months of the year - $91.9 million higher than in the same period in 1997.
At the same time, AGB Polska reported that television spending at three major stations - public broadcaster Telewizja Polska (TVP) and private operators Polsat and tvn - reached zl. 623.05 million ($180.59 million) in the first quarter. But agency executives say that figure is inflated by 30% for some stations to as much as 75% for new broadcaster tvn.
AGB compiled its figures by taking the number of commercials aired and then figuring out the revenue earned by using price lists put together by the different stations. The problem is that the prices stations charge are often lower than their rate sheets.
"It's a problem of methodology," said Tomasz Englert, media director at Grey Warszawa advertising agency.
tvn's margin of error is particularly high because the station attempts to negotiate around its relatively small viewership share - 6.5% according to market surveyor Osrodek Badania Opinii Publicznej (OBOP). To compensate for that, tvn shows a single commercial three to four times for free to justify its cost per point (CPP), or the amount an advertiser pays to reach a single percentage point of the viewership market, to clients, said Adam Rybarczyk of AGB.
The result is that while the station's CPP is one of the highest in the industry at zl. 6,487, the real price the station charges clients is only 25-30% of its rate card, Rybarczyk said.
According to ANR figures, distorted though they may be, Poland was No. 1 in the region in terms of ad spending in the first quarter. It is followed by Hungary, which had $125.7 million ($92.7 million in 1997) in the first quarter, and the Czech Republic, which had $97 million ($75 million in 1997).
According to the research, 67.4% of all ad spending in Poland went to TV commercials, compared with 57.2% in Hungary and 57% in the Czech Republic.
"Clients tend to have enormous faith in the powers of television," said Robert Sikorski, media director at Market Link advertising agency.
While the numbers were strong in the first quarter, the real boom is expected to come this fall when the private pension operators begin advertising blitzes for the new funds that come into effect Jan. 1, 1999. The new funds are part of the government's plan to overhaul the country's ailing pension system. About 20 new funds are expected to battle it out for an estimated $3 billion market.
United we stand
Wroclaw-based advertising agency AIDA will create the first national network uniting small and medium-sized advertising agencies. The new AIDA Group wants to consolidate the fragmented advertising market, creating one entity capable of competing with foreign-owned network agencies, said Bogdan Radwanski, the group's managing director.
The group wants to bring together 100 agencies inside Poland and also expand outside of the country, he said.
"We want to ensure that medium-budget clients will be serviced equally with high-budget ones," Radwanski said.
According to the agency, many smaller advertising clients are still ignored by major agencies and are often forced to turn to less expensive agencies that occasionally are also less qualified.
"In many cases it's just flushing your money down the drain, and we want to change that," Radwanski said.
Two weeks ago AIDA kicked off its promotional campaign in national newspapers, as well as on the pages of the agency's web site (www.aida.pl) and in its in-house magazine, AIDA Media.
"We are particularly interested in agencies that are already established on the market, which are aware of their own potential," Radwanski said.
Those who want to join the group and take advantage of the training services, promotion and network name must first fork out zl. 5,000 to join. That is supplemented with a monthly licensing fee of $300. Group members will also have to hand over 2.5% of their net billings.
AIDA itself reported revenue of zl. 13.5 million ($3.9 million) last year, with total billings amounting to zl. 85 million ($24.6 million). By comparison, McCann-Erickson Polska, which combines ad agency ITI/McCann Erickson with McCann Communications BTL (below-the-line) and the group's public relations agency, had revenue of zl. 32.9 million ($9.54 million) in 1997 and billings of zl. 275.73 million ($79.9 million) last year.
Public acceptance
Poles are still strongly attached to Channel 1 of the Polish Public Radio, the latest poll conducted by Osrodek Badania Opinii Publicznej (OBOP) showed. If Poles where to choose only one radio station they could listen to, 28% of them would be happy with Channel 1, according to the poll which was requested by RMF radio station.
RMF, however, placed second in the poll, with 24% of listeners saying it was their No. 1 choice. Most of those fans are teenagers - 54% of respondents under 19 years of age voted for RMF.
"They're very devoted listeners," said Krzysztof Napelski, RMF's marketing director. "And we hope that this number and devotion will bring fruits in the future, when they're older."
But RMF also won the hearts of people aged 30-39, gaining 30% of their support.
Channel 1 had the greatest number of fans among people over 60, with 66% of those respondents voting for the station. Radio Zet finished third, earning 14% of listeners' votes.
- Lidia Kelly contributed to this article
At the same time, AGB Polska reported that television spending at three major stations - public broadcaster Telewizja Polska (TVP) and private operators Polsat and tvn - reached zl. 623.05 million ($180.59 million) in the first quarter. But agency executives say that figure is inflated by 30% for some stations to as much as 75% for new broadcaster tvn.
AGB compiled its figures by taking the number of commercials aired and then figuring out the revenue earned by using price lists put together by the different stations. The problem is that the prices stations charge are often lower than their rate sheets.
"It's a problem of methodology," said Tomasz Englert, media director at Grey Warszawa advertising agency.
tvn's margin of error is particularly high because the station attempts to negotiate around its relatively small viewership share - 6.5% according to market surveyor Osrodek Badania Opinii Publicznej (OBOP). To compensate for that, tvn shows a single commercial three to four times for free to justify its cost per point (CPP), or the amount an advertiser pays to reach a single percentage point of the viewership market, to clients, said Adam Rybarczyk of AGB.
The result is that while the station's CPP is one of the highest in the industry at zl. 6,487, the real price the station charges clients is only 25-30% of its rate card, Rybarczyk said.
According to ANR figures, distorted though they may be, Poland was No. 1 in the region in terms of ad spending in the first quarter. It is followed by Hungary, which had $125.7 million ($92.7 million in 1997) in the first quarter, and the Czech Republic, which had $97 million ($75 million in 1997).
According to the research, 67.4% of all ad spending in Poland went to TV commercials, compared with 57.2% in Hungary and 57% in the Czech Republic.
"Clients tend to have enormous faith in the powers of television," said Robert Sikorski, media director at Market Link advertising agency.
While the numbers were strong in the first quarter, the real boom is expected to come this fall when the private pension operators begin advertising blitzes for the new funds that come into effect Jan. 1, 1999. The new funds are part of the government's plan to overhaul the country's ailing pension system. About 20 new funds are expected to battle it out for an estimated $3 billion market.
United we stand
Wroclaw-based advertising agency AIDA will create the first national network uniting small and medium-sized advertising agencies. The new AIDA Group wants to consolidate the fragmented advertising market, creating one entity capable of competing with foreign-owned network agencies, said Bogdan Radwanski, the group's managing director.
The group wants to bring together 100 agencies inside Poland and also expand outside of the country, he said.
"We want to ensure that medium-budget clients will be serviced equally with high-budget ones," Radwanski said.
According to the agency, many smaller advertising clients are still ignored by major agencies and are often forced to turn to less expensive agencies that occasionally are also less qualified.
"In many cases it's just flushing your money down the drain, and we want to change that," Radwanski said.
Two weeks ago AIDA kicked off its promotional campaign in national newspapers, as well as on the pages of the agency's web site (www.aida.pl) and in its in-house magazine, AIDA Media.
"We are particularly interested in agencies that are already established on the market, which are aware of their own potential," Radwanski said.
Those who want to join the group and take advantage of the training services, promotion and network name must first fork out zl. 5,000 to join. That is supplemented with a monthly licensing fee of $300. Group members will also have to hand over 2.5% of their net billings.
AIDA itself reported revenue of zl. 13.5 million ($3.9 million) last year, with total billings amounting to zl. 85 million ($24.6 million). By comparison, McCann-Erickson Polska, which combines ad agency ITI/McCann Erickson with McCann Communications BTL (below-the-line) and the group's public relations agency, had revenue of zl. 32.9 million ($9.54 million) in 1997 and billings of zl. 275.73 million ($79.9 million) last year.
Public acceptance
Poles are still strongly attached to Channel 1 of the Polish Public Radio, the latest poll conducted by Osrodek Badania Opinii Publicznej (OBOP) showed. If Poles where to choose only one radio station they could listen to, 28% of them would be happy with Channel 1, according to the poll which was requested by RMF radio station.
RMF, however, placed second in the poll, with 24% of listeners saying it was their No. 1 choice. Most of those fans are teenagers - 54% of respondents under 19 years of age voted for RMF.
"They're very devoted listeners," said Krzysztof Napelski, RMF's marketing director. "And we hope that this number and devotion will bring fruits in the future, when they're older."
But RMF also won the hearts of people aged 30-39, gaining 30% of their support.
Channel 1 had the greatest number of fans among people over 60, with 66% of those respondents voting for the station. Radio Zet finished third, earning 14% of listeners' votes.
- Lidia Kelly contributed to this article
