Eastern Europe offers new growth opportunities for digital marketers

The Internet Advertising Bureau (IAB) has positioned Eastern European countries such as Belarus, Turkey and Russia within the top ten European markets for online advertising growth. Eastern Europe saw an almost 14% increase in online advertising spending in 2014, making it a rapidly expanding market for digital advertising. The main opportunities for brands and marketers in Eastern Europe for 2016 are expected to focus on; increasing education in programmatic technology to boost return on investment; personalisation of data to build closer relationships with customers; increasing mobile-first campaigns for identifying consumers across different devices; and enhancing video and social media advertising to reach new and wider audiences with ad campaigns.  

With varying internet penetration rates from the Czech Republic to Romania, Eastern Europe is a diverse, yet exciting, market for digital growth. But what is the state of programmatic in Eastern Europe? Firat Dirik, regional director eastern Europe, MediaMath, takes a look at the challenges and state of the industry so far.

Eastern Europe’s digital advertising industry is expanding rapidly with an increase in online ad spend of almost 14% last year. Recent statistics from the IAB position Belarus, Turkey, and Russia firmly in the top ten European markets for online advertising growth.

But the region is characterised by diversity with numerous languages and currencies, as well as localised regulations. My recent appointment to regional director of Eastern Europe for MediaMath involves overseeing activity in 20 distinct markets, each with its own unique idiosyncrasies and challenges. Some markets, such as Turkey, Poland, Hungary, Romania, Russia, and Czech Republic, are relatively mature and ready for digital expansion, while others are only just beginning to emerge.

So, what does the current digital landscape look like in Eastern Europe and what will the main opportunities be for brands and marketers in the region over the coming year?

Programmatic education will be key

Marketers in Eastern Europe are just beginning to grasp the basics of programmatic technology – resulting in a rapid growth in programmatic spend of over 110% last year – but overall adoption of programmatic remains low due to poor understanding of the technology and how it can be used to boost ROI. Inventory availability is limited, as publishers fail to understand the ability of programmatic to maximise yields, and cling to the misconception that programmatic is best suited to cheap or remnant inventory. The adoption of powerful new technologies, such as marketing operating systems, is slowly beginning to rise; but technology and education need to work hand-in-hand to realise the true potential of programmatic. A key part of my new position is to educate marketers across the region on digital advertising technologies and best practices. 2016 will see a major emphasis on increasing clarity, in both the demand and supply sides, ensuring all parties understand the benefits of programmatic.

Data will drive personalisation

Brands in the region are waking up to the potential of first- and second-party data to help them better understand and communicate with consumers; but the aggregation and segmentation of data remains a challenge. The coming year will see an increased interest in data management platforms (DMPs) – along with the development of educational programmes to assist with their use – as brands make better use of their CRM data to help them get closer to customers. Marketers will need to weigh up the benefits of selecting a stand-alone DMP versus embracing data management as an integral part of a marketing operating system.

Mobile-first campaigns will emerge

Mobile use is deep-seated in Eastern Europe and the region leads the world in mobile penetration, but adoption of smartphones and tablets varies among markets — rates of adoption are high in Turkey, but relatively low in Poland. Smartphone use is, however, expected to rise across the region to almost 27% this year, and this growth will continue for the foreseeable future, meaning marketers will start to adopt a mobile-first approach to digital advertising. Mobile will be a key driver of programmatic growth, with marketing operating systems delivering multi-channel campaigns that work across all devices and screens. The ability to identify consumers across different devices will become more important in the region as the year progresses. Marketers will begin to recognise the need for a solution that stitches together the path to purchase and reaches consumers on their preferred device with relevant messaging.

Video advertising will evolve

Video advertising is already thriving in Eastern Europe, due to high levels of digital video consumption. Video is a particularly significant element of online engagement in Turkey, with 60% of mobile users watching five minutes or more of online video each day. Video accounts for over a quarter of online display advertising in Russia – and over 10% in Turkey and Poland – with spend increasing by more than 100% in Hungary and Belarus last year; and video ad spend will continue to grow throughout 2016. Programmatic video is currently very limited in the region, but with an increased emphasis on programmatic education — and an increase in the availability of programmatic video inventory — brands will begin to consider this as part of their overall marketing strategy.

Social media advertising will surge

Social media is incredibly popular in Eastern Europe, with 43% of internet users in the region using Facebook, and many accessing social networks via mobile devices. Marketers are increasingly recognising the benefits social media advertising can bring, enabling them to proactively target users and lookalike audiences by deploying interest and behavioural data. Over the coming year, marketers will take advantage of the opportunities offered by Facebook and other networks, with a growing importance placed on social media advertising and increased use of technology platforms to support this.

Eastern Europe is an exciting, dynamic region, just setting out on its programmatic journey. As knowledge grows on both the demand and supply side, and the use of technological tools becomes increasingly sophisticated, a more mature digital advertising market will emerge by the end of 2016.