Fading El Dorado

The “El Dorado” image of a number of countries in Central and Eastern Europe (CEE), certainly in the eyes of foreign TV companies, is currently a fast fading memory. However, it could yet return one day once the economic crisis is over.

Last week the Brussels-based Association of Television and Radio Sales houses (EGTA) held a two-day workshop in Bucharest dedicated to the “challenges and opportunities facing TV advertising in emerging markets.”

The difficulties faced in the host country were clearly articulated by Radu Budes, the managing partner of Splendid Media (Romania). Quoting figures from GfK Romania, he said that total TV sell out in Q1 2009 was 29% lower than in the same quarter last year. Moreover, only newspapers (44%) experienced a sharper fall over the same period.

He added that in the first three months of this year seven of the 10 largest advertisers increased their spend on thematic channels, while three decreased their budgets on generalist TV stations.

Csaba Lukacs, the MD of RMB (Hungary), meanwhile discussed at some length the huge variety of thematic channels currently operating in Hungary. RMB sells advertising for three (Hallmark Channel, Jetix and Movies24) and has previously worked with Spektrum TV, MTV Europe and Sport1 TV.

In his view, there are two ways to react to the current crisis. The short-term approach involves doing “obvious things” such as improving efficiency and client service, while the longer-term one includes “investing in programming and marketing to strengthen your brand and market position.” It also involves “diversifying your portfolio”, which could include launching new TV channels.

An arguably more positive overview was provided by Toni Petra, the MD of AGB Nielsen Media Research. Quoting US data from 2008, she tried to dispel the theory that the age of home viewed traditional TV is over.

This included the fact that around 31% of internet activity occurs when consumers are also watching TV and that time-shifted TV is watched at double the pace of online video. Moreover, 12 of the top 24 internet video channels are traditional TV (cable/terrestrial) and 85% of this viewing occurs in the home.

Given that CEE is still some way behind the US in terms of new media usage, this data must surely be reassuring for the region’s traditional TV players. However, the real challenge for them remains riding out the current global economic crisis.