Pension funds fuel H1 ad sales
The trend is expected to continue, with sales forecast to more than double by year's end, analysts said. Advertising spending came to almost zł. 3.25 billion ($833 million) during the first half of the year, according to a report from Cyprus-based AC Nielsen Media International and Media Watch.
Some agency executives are forecasting 1999 sales to grow 30% by year's end. Although that represents a cut back from the impressive 50% growth in ad sales for 1998 compared to 1997, it's above growth expectations for the sector, agency executives said. Ad sales were expected to slump more significantly as firms cut back spending for fast-moving consumer goods (FMCG), the market's mainstay. But the big surprise came in ad campaigns from the financial services sector, executives said.
"It's a slightly misleading growth," said Rupert Slade, managing director of media house Initiative Media.
Spending by FMCG companies already slowed this year and any pick up has come mainly from the pension fund sector, he said. Newly created pension funds have spent heavily this year to attract members. "If you look at where they were a couple of years ago, they (FMCG) were the No. 1 spenders," said William Brotchie, deputy general manager at McCann Erickson.
He estimated total ad spending for the year at about zł. 6.8 billion (over $1.7 billion).
Although pension reform was the main engine driving ad sales during the first half, many question whether it can continue to fuel growth through year's end. When pension funds started their ad blitz in February and March, ad spending jumped by about 26%, said Ian Majewski, managing director at media house Media Partners Polska.
The spurt in ad spending by pension funds, however, could change in the next six months, warned Marek Hancke, general manager of ad agency Euro RSCG.
Currently, only a handful of pension funds have managed to gain much popularity among the population and that could result in other funds looking more cautiously at spending more on ads in coming months, agency executives said. But one market sector that is set for further growth is the consumer financing sector, which includes mortgages, savings plans and retail banking.
"A consumer market will blossom" in financial services, said Joe Senft, managing director at advertising agency BrandStorm.
Hancke agreed, noting that "definitely you can see the first signs of the financial sector rising." But he also cautioned that it would not be as dramatic as the pension funds.
Slade of Initiative Media also doesn't see an ad blitz in personal financial services. "I can see growth, but it won't be substantial in the next few years," he said.
Stephen Girdlestone, creative director at Saatchi & Saatchi, envisions a general broadening in the client base as the market matures. As the economic climate and standard of living in Poland improve, other companies with a late start to the Polish market will make their move, Girdlestone said.
"It's just going to grow" in all sectors, he said. "They need to get in, they need to establish their brand now," Girdlestone said.
Some agency executives are forecasting 1999 sales to grow 30% by year's end. Although that represents a cut back from the impressive 50% growth in ad sales for 1998 compared to 1997, it's above growth expectations for the sector, agency executives said. Ad sales were expected to slump more significantly as firms cut back spending for fast-moving consumer goods (FMCG), the market's mainstay. But the big surprise came in ad campaigns from the financial services sector, executives said.
"It's a slightly misleading growth," said Rupert Slade, managing director of media house Initiative Media.
Spending by FMCG companies already slowed this year and any pick up has come mainly from the pension fund sector, he said. Newly created pension funds have spent heavily this year to attract members. "If you look at where they were a couple of years ago, they (FMCG) were the No. 1 spenders," said William Brotchie, deputy general manager at McCann Erickson.
He estimated total ad spending for the year at about zł. 6.8 billion (over $1.7 billion).
Although pension reform was the main engine driving ad sales during the first half, many question whether it can continue to fuel growth through year's end. When pension funds started their ad blitz in February and March, ad spending jumped by about 26%, said Ian Majewski, managing director at media house Media Partners Polska.
The spurt in ad spending by pension funds, however, could change in the next six months, warned Marek Hancke, general manager of ad agency Euro RSCG.
Currently, only a handful of pension funds have managed to gain much popularity among the population and that could result in other funds looking more cautiously at spending more on ads in coming months, agency executives said. But one market sector that is set for further growth is the consumer financing sector, which includes mortgages, savings plans and retail banking.
"A consumer market will blossom" in financial services, said Joe Senft, managing director at advertising agency BrandStorm.
Hancke agreed, noting that "definitely you can see the first signs of the financial sector rising." But he also cautioned that it would not be as dramatic as the pension funds.
Slade of Initiative Media also doesn't see an ad blitz in personal financial services. "I can see growth, but it won't be substantial in the next few years," he said.
Stephen Girdlestone, creative director at Saatchi & Saatchi, envisions a general broadening in the client base as the market matures. As the economic climate and standard of living in Poland improve, other companies with a late start to the Polish market will make their move, Girdlestone said.
"It's just going to grow" in all sectors, he said. "They need to get in, they need to establish their brand now," Girdlestone said.
