The ad cup overfloweth
Media companies are benefiting from resurgent ad spending which began to pick up in the middle of last year after a three-year lull. Across the market, revenues continued their healthy climb, while profit growth was stratospheric. The value of ads bought increased 10 percent in H1, but the big winners in terms of ad-market growth were radio and outdoor, which saw spending on adverts grow by 15 percent and 24 percent respectively.
"Radio is one of the fastest growing branches of the ad market. Also outdoor is growing fast. The growth rates are in the range of 24 percent for outdoor," said Włodzimierz Giller, a media analyst at Deutsche Bank securities.
Radio and outdoor expanded faster than the market mainly due to a 97-percent saturated TV ad market. TV stations must conform to advertising limits - 12 minutes per hour during prime time - and have been steadily raising prices and cutting discounts in order to raise income. Thus, smaller advertisers are being driven to find other media to get their message out. The influx meant Broker FM, owner of Poland's most popular radio station, RMF FM, managed to post its first-ever Q1 profit on its way to recording H1 revenue growth of 14 percent year on year (to zł.80 million), and profit growth of 349 percent (to zł.9.25 million).
"TV stations decided to change their policies and increase real prices, and that was one of the drivers in other segments. It's expected that next year radio stations will follow suit and lower discounts as well," says Michał Mierzwa, a media analyst for Erste Securities.
The ad overflow from television spilled into print media too, where the market share by ad spending reached 17 percent in the second quarter. Agora in particular benefited, posting a zł.92 million first-half profit, up nearly 800 percent from the zł.11.8 million posted in H1 last year.
The growing popularity of the internet, however, may impinge on print media's long-term prospects. "Over the long run, print media will slowly lose market share to electronic media," warns Pekao SA analyst Sobiesław Pająk. Currently internet ads constitute just one percent of all advertising expenditure, but that is expected to grow to around five percent over the next few years.
Director of the International Advertising Association in Poland, Bohdan Pawłowicz, says Poland's relative poverty will be a drag on print media as well, especially for smaller specialty titles. "There are only two fishing titles in Poland, and they are really struggling," he says. "Because of the poverty of some of the society it's not really a good time for the press."
For the rest of this year, however, analysts say the outlook for all media sectors remains extremely positive.
"In terms of the cycle I think that we are still ahead of further growth for the coming quarters," says Pająk. "Definitely we are not somewhere close to the peak."
"Radio is one of the fastest growing branches of the ad market. Also outdoor is growing fast. The growth rates are in the range of 24 percent for outdoor," said Włodzimierz Giller, a media analyst at Deutsche Bank securities.
Radio and outdoor expanded faster than the market mainly due to a 97-percent saturated TV ad market. TV stations must conform to advertising limits - 12 minutes per hour during prime time - and have been steadily raising prices and cutting discounts in order to raise income. Thus, smaller advertisers are being driven to find other media to get their message out. The influx meant Broker FM, owner of Poland's most popular radio station, RMF FM, managed to post its first-ever Q1 profit on its way to recording H1 revenue growth of 14 percent year on year (to zł.80 million), and profit growth of 349 percent (to zł.9.25 million).
"TV stations decided to change their policies and increase real prices, and that was one of the drivers in other segments. It's expected that next year radio stations will follow suit and lower discounts as well," says Michał Mierzwa, a media analyst for Erste Securities.
The ad overflow from television spilled into print media too, where the market share by ad spending reached 17 percent in the second quarter. Agora in particular benefited, posting a zł.92 million first-half profit, up nearly 800 percent from the zł.11.8 million posted in H1 last year.
The growing popularity of the internet, however, may impinge on print media's long-term prospects. "Over the long run, print media will slowly lose market share to electronic media," warns Pekao SA analyst Sobiesław Pająk. Currently internet ads constitute just one percent of all advertising expenditure, but that is expected to grow to around five percent over the next few years.
Director of the International Advertising Association in Poland, Bohdan Pawłowicz, says Poland's relative poverty will be a drag on print media as well, especially for smaller specialty titles. "There are only two fishing titles in Poland, and they are really struggling," he says. "Because of the poverty of some of the society it's not really a good time for the press."
For the rest of this year, however, analysts say the outlook for all media sectors remains extremely positive.
"In terms of the cycle I think that we are still ahead of further growth for the coming quarters," says Pająk. "Definitely we are not somewhere close to the peak."
