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Oh! – About Polish OOH in 2012. Predictions and Reality, Trends and Tendencies, Limitations and Problems

This article is the result of co-operation with German printing magazine, “Large Format”. It’s German version was published in the February issue of “Large Format”, Polish one – in the February issue of “Świat DRUKU”. Here you can read it in English. German version can be found here (in PDF file).

Large format advertisement belongs to the group of outdoor advertisement and is the most important means of advertising in Poland and globally – right next to press and television. It goes without saying that OOH (Out-of-home) advertisement is also really effective tool for promotion. A market research says that the message placed on billboards displayed in a public space is most noticeable among all advertising messages. It directly reaches its target what determines its effectiveness. In addition, large format advertising shapes the image of the product or brand on the spot: in the right place and time. It is not surprising, therefore, that the Polish marketers are increasingly turning to it. Despite these advantages, the large format advertising market in Poland is highly fragmented and not a transparent one.
Predictions and Reality
Izba Gospodarcza Reklamy Zewnętrznej IGRZ (Chamber of Commerce for Outdoor Advertising) in the summary report for 2011 predicted that 2012 would be a difficult year for the advertising industry – despite two major sporting events planned: the UEFA European Football Championship (Poland and Ukraine) and the Summer Olympic Games (London), during which, as a rule, intensive campaigns are conducted. The increase in profitability of individual companies Out-of-home and the selling results better in the second half of the year than in the first were expected. Important decisions in the field of advertising in Warsaw and Wroclaw (eg. the number of available media like city light) and a breakthrough in the use of so-called “lane” for locating media advertising were awaited. In general, it was assumed that a small Polish GDP growth would result in the Out-of-home outcome comparable to the one gained during previous two years.
Was then 2012 good for large format advertising? Were the predictions right? According to IGRZ report, the sales volume of the OOH industry in Poland after nine months of 2012 amounted to 412,966,639.00 PLN and was lower than in the same period of 2011 by 6.16%. The outcome is the result of weak selling in the third quarter of this year. In the third quarter of 2012 sales volume amounted to the sum of 125,235,449.00 PLN (against 152,206,859.00 PLN in the period July – September 2011) and compared to the third quarter of 2011 was lower by 17.72%. It’s worth reminding that after six months of this year there was an outcome comparable to last year. Lower sale in the third quarter of 2012 was primarily the result of the lack of “political campaigns” and reduction of expenses on OOH advertising in the “telecommunications” sector (close to ten million less than last year). Among the major advertisers from various industry sectors only “entertainment/culture” and “automotive/transportation” noted a significant increase compared to the third quarter of the last year : “entertainment/culture” – plus 11%; “automotive/transportation” – plus 16,5%.
In the face of the third quarter’s results, achieving at the end of 2012 results comparable to the previous year seems to be a rather problematic. The fact is that the fourth quarter of 2012 had quite a promising beginning (very good use of space exhibition in October), but the previous years statistics don’t leave much space for optimism and make it possible to forecast minus 5 % of income compared to 2011.

Trends And Tendencies
The Polish Out-of-home market is heading in the direction of the largest utilization of exhibition space on medias such as frontlight 600 x 300 cm (18 m²) and city light (120 x 180 cm). It generates more than half of the revenue. In line with the global trend, media 600 x 300 cm forms the basis for image campaigns, while this second type, city light, dominates the city centers. Unfortunatelly, the development of both is being slowed down by the administrative restrictions.
The stability of the OOH industry has been ensured for several years by the revenues from the four major sectors: "sale", "food", "entertainment/culture" and "telecommunications". However, we should be aware that this geography can change. An example of such changes might be situation in Austria, where OOH advertising expenditure in the "telecommunications" accounted – in the best period – for 30%. After stabilization of the telecommunications market, especially mobile operators, OOH advertising spending fell in the long run to 2 %. Similar, although not so dramatic, trend periodically could be observed in Germany.
According to the CAM Media report for the third quarter of 2012, which creates the image of the Polish large format advertising (not the entire OOH sector), the geographical distribution of large format advertisements in 2012 looks just like in the previous period. Warsaw and Cracow are still experiencing the decline in the market share. An average transaction price also decreased, which is currently 50,919 PLN – last year it was 54,490 PLN. It is worth mentioning that 2011 for the advertising industry was another year of recovering from the crisis.
It should be noted that since 2009 the revenues of the entire OOH market in Poland amount to 600 million dollars per year (net). This results from the economic slowdown and stagnation in the advertising market.
2009 was a year of crisis. That’s true, but as Lech Kaczoń, President of IGRZ, said: “We are far from such a dramatic decline, that took place in some other EU countries. In addition, our Out-of-home advertising market is managing with the situation better than other Polish media”. It’s means that the situation is stable.

Limitations And Problems
In the capital city and other major Polish cities still happens that the advertisements obscure the buildings’ windows, although it is prohibited since 19th of June 2011. Simplifying the procedures of removing illegal advertisements and increasing fines are the objectives of the project of changes in the act in executory proceedings proposed by Jack Kozlowski, governor of Mazovia. Why this situation should be amended? The fines are lower than the actual revenues from the sale of advertising, so unfair housing communities and owners of media protracts appealing to an administrative authority as well as the rest of procedures because it simply pays off. The aim of the new project is shortening the time required to perform the procedures and to comfort tenants. It can be achieved thanks to reduction of the possibilities to lodge complaints. Equally important is raising fines, read: making them real. Great importance for the improvement of the situation on the Out-of-home market in Poland have industry initiatives and efforts of the individual members of IGRZ undertaken in order to change the way how advertising media function in the public space, to bring in the qualitative changes in the various media segments, and to optimize sales. Negative impact on the OOH market have activities of some companies that do not respect the rule of law – it very often causes bad attitude of local governments to developement of a modern advertising media network. This strikes directly the companies that operate in accordance with the law.

Since analysts say with no doubts that the crisis in the Euro zone, the risks comming from overseas and belt-tightening will cause a sudden braking in Polish economy. Also the European Commission predicts tough year for the Polish market. Experts warn – it will be worse than during the first wave of the crisis so we rather shouldn’t unexpected twists in OOH industry in 2013 year. At least, lets hope so.

Karolina Drożdż, an editor of „Świat DRUKU” (The World of Printing) – an impartial Polish monthly for the printing industry, dedicated also to packaging, paper, and advertising branches.

Photo: The company Sico Polska and the large format printing house Opinion Strefa Druku produced a Polish flag for football fans on Euro 2012 (UEFA European Football Championship)

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