Do You CEE 2011 Report Gemius IAB Europe

The overview of the Central and Eastern Europe internet market in 2011
Do You CEE?
3rd edition
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The overview of the Central and Eastern Europe internet market in 2011
DO YOU CEE?
3rd edition
Do you CEE? 2011
Authors: Opinions headline
Counselors: Authors:
Alain Heureux, Filip Pieczyski
Grayna Jakubowska, Marta Klepka, Sebastian Sadowski, Konrad Sterczyski
Contributors:
Tams cs, Paulina Adamska, Gza Ambruszter, Vesselin Angelov, Borbla Baittrk, Oleksiy Bakun, Gryta Balseryte, Kaspars Driis, Mikhail Doroshevich, Linda Egle, Catalin Emilian, Tom Gregor, Vladimir Houba, Lubo Ivani, Ieva Kakariekaite, Vibor Kalogjera, Marinko Kutle, Krzysztof opuszyski, Ruta Matiukaite, Anton Melekhov, Gregor Niavi, Toms Panders, Lesya Prus, Paap Peterson, Krzysztof Rosiski, Izabela Urbanova, Ambr Stoics, Katerina Tkachuk, Krzysztof Zieliski
Support:
Dawid Fillmann, Micha Wodarczyk
With special thanks to:
Ioana Anescu, Riardas Baltaduonis, Zoltan Barnoth, Ivars Bauls, Alexey Belyaev, Maja Biniewicz, Andris Blaka, Michal Buzek, Aleksandras esnaviius, Andrey Chernyshov, Mia opkov, Milan Dubec, Andrzej Garapich, Vitaliy Gorduz, Laura Grigerova, Jan Jilek, Ventsislav Kostov, Micha Kostrzewa, Tom Lauko, Levente Lovas, Ramun Malinauskien, Galina Malishevskaya, Andrs Mth, Neslihan Mesutoglu, Janet Naidenova, Petr Nespurek, Boris Omelnitskiy, Janis Palkavnieks, Vesselin Petkov, Sergey Petrenko, Liis Raudsep, Jan Rezab, Zoran Savin, Denis Schvarcz, Saa kori, Jarosaw Sobolewski, Marko Sojonen, Marina Solovieva, Endre Somogyi, Dragos Stanca, Aygen Tezcan, Irina Tsekova, Artur Waliszewski, Alexander Vasilevich, Marko Vonina
The authors of Do you CEE? The overview of the Central and Eastern Europe internet market in 2011 wish to thank Romanian Audit Bureau of Circulations (BRAT) for providing access to data concerning the Romanian internet and for preparing the information for the chapter on the online market in Romania.
Do you CEE? 2011
Alain Heureux
IAB Europe President and CEO
Third Do You CEE? report in collaboration with our member and partner Gemius! The report is becoming a real barometer for business people wanting to operate in the CEE region, wanting to understand the different markets and wanting to benchmark one country to another. One of our main objectives is to PROVE the power of digital and to become the most reliable source of data and know-how for the European market, and we believe Do You CEE? fulfils these ambitions perfectly. This region remains particular within our network having many small trade associations but being very dynamic, requiring support but providing energy to larger markets, having fresh, new and daring ideas. Our Team is proud to participate in the development of Do You CEE? report in collaboration with the experts from Gemius. We hope you will enjoy this new edition and we look forward to empowering the project further.
Filip Pieczyski
Gemius Management Board Vice President
It is my utmost pleasure to present Do you CEE? the overview of the Central and Eastern Europe internet market in 2011. It is the third year in a row, that Gemius, in cooperation with IAB Europe, has had the honour to answer the growing need for an in-depth analysis of the remarkable potential present in the countries of the CEE region. The noticeable interest in our publication, visible importance and numerous references to its content at many pan-European and global events, is proof enough for us that the Do you CEE? report plays a tremendous role in development as well as promoting the online opportunities of the region. In response to the changing interests of our readers we have modified the content of the Do you CEE? report to focus mainly on the most interesting events of 2011, as well as the unique and captivating features of the markets discussed therein. The increased number of external experts provides the reader with a wide variety of opinions, while the inclusion of chapters discussing the key trends of 2011 (Mobile internet, Social media) gives all the answers to anybody interested in these phenomena. Apart from that, as in the previous Do you CEE? report, a thorough discussion of the online reality in 15 countries may be found in this years publication, as well as a presentation of the state of regional internet market development, the current CEE online adspends situation, and a summary of the 2011 CEE highlights. As in previous years, I would like to thank our partner in the project, IAB Europe, and all of the authors of this years publication. Together with them, I cordially invite you to read the latest compendium of knowledge on the CEE internet, presenting the most important landmarks of 2011, such as reshuffles on the growing mobile market, the boom in the group shopping phenomenon, as well as the steady increase in importance of video content and social networks.
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Do you CEE? 2011
Table of contents: Executive summary Regional comparison Market Size & Market Development Online Advertising State Social Networks & Mobile Internet 15 24 36 8
Country overviews
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Belarus Bulgaria Croatia Czech Republic Estonia Hungary Latvia Lithuania Poland Romania Russia Slovakia Slovenia Turkey Ukraine
51 59 67 75 83 91 99 107 115 123 133 141 149 157 165 173 177
Methodological note Bibliography
executive summary
executive summary
2011 was a year of further development for the CEE internet market. The internet population of the region grew by 9.2% in comparison with 2010 and, as a consequence, more than 12M additional Central and Eastern Europeans were present online. The growth of internet audience was also typical for almost all countries in this part of Europe, which proves that the Web in this region is still developing and it is unquestionably a promising target for new investments. In terms of spending on online advertising strategies, the budgets allocated to the internet have increased across all the countries in the CEE region, apart from Belarus. Nevertheless, even in the latter, the share of online in the total ad budgets went up from 7% in 2010 to 9% in 2011. In some of the countries in this part of Europe (Slovakia, Bulgaria), only the expenditures for online advertising improved, among all media, while expenditures for advertising in other media decreased. Amongst the locomotives of industry growth in 2011 were the quickly developing Eastern European countries: Russia and Ukraine, as well as Turkey, a market which attracts more and more international attention each year. Russia, with over 1 billion EUR spent on search, display, and other segments of online advertising, was a real frontrunner in the ranking in 2011. The next top 3 positions were taken by the same countries as in 2010: Poland and Turkey. In 2011 the indisputable leader when it came to the dynamics of market development was Ukraine, followed by Russia, Croatia, Slovenia and Slovakia. In Ukraine and Russia, especially, the y-o-y growth rate exceeded the impressive figure of 50%. What changes did 2011 bring to the CEE internet industry? And what were the most crucial market trends recognized across the markets of this region? The Web is not only about advertising and that could be seen in 2011, which was a good year for e-commerce industry. Internet users, getting more acquainted with online and mobile payments, tend to trust the Web in terms of purchasing various goods and services online. E-shopping became a more incremental digital experience. On most of the markets the most popular platforms for e-shopping are the online stores, though in some countries, such as Poland, online auction portals are more widely used. In 2011 the unquestionable regional leader in the latter category was Allegro Group, which continued its international expansion. E-commerce industry also got another winner in 2011 the group shopping segment. On most of the CEE markets, it was either Groupon, or its clones, that attracted millions of clients thanks to intensive promotional campaigns and wide offers
Do you CEE? 2011
of daily deals from various sectors. Groupon, the global player present on 44 international markets already, is active in four of the CEE countries Poland, Romania, Russia, Ukraine and additionally in Turkey. On all of these markets the website managed to stabilise its strong position, but the competition seems to be just behind its back, or sometimes already ahead (like Biglion in Russia). In the countries where Groupon is not yet present, a lot of sites with a similar format have come into being and are flourishing. Poland can be perceived as an example of a country where the market of group buying is thriving. In just one year collective shopping websites attracted more than 1.7M additional Real Users and the whole sector reached 30% of the Polish internet audience in December 2011. In smaller markets, such as Latvia, the customers are also more and more willing to buy things and purchase services via collective shopping platforms. According to the business portal db.lv, the sales volume for this e-commerce category in Latvia has grown by about 10- 15% per month (db.lv, 15.12.2011). Some of the market players experience an even higher monthly growth rate of sales for instance for zizu.lv, the current Latvian market leader in the group buying segment, monthly turnover increased by 66.5% in December 2011 in comparison with November 2011. What is the future for the collective buying websites in the CEE region then? Some forecasts can already be presented on the basis of the phenomena that were visible on the market in 2011. First of all, further growth of the segment is very likely to occur in 2012, since the dynamics of market development shown is remarkably intense at the moment. Nevertheless, the market is noticeably consolidating and in the future it is probably going to be much harder for new market players to find a niche in the sector. In 2011 some important acquisitions in the collective buying sector in Central and Eastern Europe took place and this could be a sign of significant reshuffles ahead. The major market player in the Czech Republic Slevomat has bought shares in one of the crucial player in the Baltic states Cherry Media, and acquired a share in the largest daily deals site in Hungary Bnusz Brigd. Moreover, it took over the most threatening players on the local Czech market Zapakatel.cz and Vykupto.cz. Thanks to this aggressive strategy, Slevomat strengthened its position in the region and is now the dominating company in the group buying sector not only in Slovakia and the Czech Republic, but also in the Baltic states and Hungary. Biglion, at the moment the most popular collective buying platform in Russia, is trying to expand its geographical scope of operations as well. In April 2012 it acquired one of its most menacing competitors in Belarus Bongo.by. Through this
executive summary
acquisition Biglion is striving to increase its activities in the former Soviet countries and, in the future, it plans to grow in other Eastern European markets. Kupikupon, also one of the strongest daily deals sites in Russia, has begun to invest in new services that could enhance the shopping experience, similarly to Slevomat. In April 2012 the platform acquired the salon booking site, Moresalonov.ru, enabling its users to book beauty salon appointments at the same time as they are purchasing its services online. In the near future, bookings for other sectors (restaurants, car maintenance and medical service providers) will be also possible. 2011 was also a year of booming mobile internet in the region. This phenomenon is still at its nascent stage in Central and Eastern Europe. Nevertheless, the dynamics of the mobile market development are already remarkable. In 2011 (January 2011 - December 2011) the share of mobile page views generated increased on average by 2.5 times in the region and this speed of market evolution does not seem to be slowing down. There are some CEE markets where the share of page views generated from mobile devices is literally exploding in Lithuania and Estonia the share of mobile page views on the market increased more than 6 times over the course of 12 months (January 2011 - December 2011). It can be seen that smartphones and tablets will be one of the main channels that marketers use for attracting new customers and building long-lasting customer relationships in the near future. The major CEE players in the e-commerce sector (Allegro, Slevomat, Biglion, Groupon) have already noticed this mobile trend and launched mobile applications that should facilitate the purchase of goods and services via their platforms. Thus, it can be concluded that the presence of the e-commerce sector on mobile devices will be more prevalent in the coming years, with customers getting more and more used to ordering goods and services via mobile devices. According to the data from IHS iSuppli and Strategy Analytics, in the first quarter of 2012 Samsung eventually managed to overtake Nokia with respect to global handset shipments. The situation on the CEE market in 2011 gives enough evidence to contend that a similar phenomenon could soon occur in Central and Eastern Europe. Nevertheless, when it comes to the share of mobile page views generated, Apple started to lead in the region in December 2011. Furthermore, since April 2011, when Apple mobile devices started to be the most popular in the CEE region, the distance between Apple and its market competitors had been gradually growing as the end of the year was approaching.
Do you CEE? 2011
In 2011 Central and Eastern Europeans were still keen on networking online with their friends, family, acquaintances, and business colleagues. The global novelty on this market was the social networking platform introduced by Google Google+, nevertheless, despite the initial internet buzz around this new player, the site did not manage to attract significant user attention in 2011. Google+ received a major facelift in 2012 and it will be interesting to see how the improvements in the product influence the number of Real Users of this service in the future. The introduction of this platform also pushed the whole sector in a new direction by introducing group video calls and providing the opportunity to target shared content more precisely. Facebook, the global social networking leader, is also gradually attracting new internet users in the CEE region. There are already several countries in this part of Europe where Facebook is the number one choice among all the active social networking sites. Still, if one looks at the rising reach of Facebook in the region, this can and is changing dynamically from month to month. Nevertheless, some of the local players in the CEE region in the social networking segment are still doing exceptionally well and sometimes their popularity among internet users far exceeds the popularity of Mark Zuckerbergs social networking site. Draugiem in Latvia, Vkontakte and Odnoklassniki in Russia, Belarus and Ukraine, and NK in Poland are all examples of CEE websites with a strong position on the local markets. Such performances by the above mentioned sites show that, on a local level, national players have the chance to compete with global giants if they implement an innovative strategic approach. Another reason for the local strength of the abovementioned players is an understanding of the market and its user needs, flexibility in adopting new trends and changes (for example building mobile applications and enabling e-shopping experience for users), and integration with the global players. On the other hand, the rising global popularity of Pinterest or LinkedIn, and the attractiveness of forums dedicated to parents in particular CEE countries (Lithuania supermama.lt) or the websites targeting the market niche, like cooking fans in the case of Coolinarika in Croatia, show that, in these times of international Facebook dominance, there are still a lot of new business opportunities dormant in the more specialised market segments. Video content is increasing steadily in Central and Eastern Europe and a significant share of marketing budgets will certainly be allocated to this segment in the coming future. Video advertising, either in the form of in-stream ads or
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executive summary
interactive banners including the video bit, is proving to be the most clickable thus engaging users attention. It proves to work well for branding campaigns too. In terms of video content, YouTube is a global market leader, as it is in this region of Europe. In December 2011 the site ranked 2nd most popular web service in Poland and 3rd most visited website in Hungary. In Ukraine it occupied 5th place among the websites with the highest number of Real Users, and in Belarus YouTube came 7th in the top 10 ranking. On various CEE markets the VOD format of watching video content online is undergoing further development, with new sites coming into being and more people streaming videos online. This trend could lead in the future to a gradual weakening of TVs traditional role in everyday life and a situation where TV stations will predominantly deliver content to fixed (PCs) or mobile devices (smartphones and tablets). In several CEE countries 2011 was a year when TV broadcasters tried to enhance their online presence, also via mobile channels. In the Czech Republic, esk televize launched several applications for tablets and smartphones which allowed viewers to access current and archived content. These apps turned out to be outstandingly popular and prove that people nowadays are willing to take the opportunity to view TV programmes wherever they are and whenever they want to. In Lithuania several popular TV stations TV3, LNK, Lietuvos ryto televizija introduced video content websites in 2011. The growing popularity of the VOD portal, TVN Player brought to the Polish market by one of the biggest TV stations, TVN, in August 2011, shows how peoples behaviour evolves when it comes to watching TV programmes. In just 2 months this VOD service exceeded the threshold of 1M Real Users and it holds top position among the local sites with video content at the moment. Moreover, in the period from September 2011 to December 2011 people visiting this website watched available for streaming video materials 45M times, which is an amazing result for the region. As already mentioned, the growing role of online video in CEE did not slip the marketers and advertisers attention and, as a consequence, more and more budgets allocated to online are spent on video creatives. Video formats, in accordance with the gemiusAdMonitor data, are at the moment one of the most effective online advertising formats. The Click-Through Ratio for these adverts is the highest across the researched CEE countries (Poland, Slovakia, Hungary, Bulgaria, the Czech Republic and Bulgaria) especially in the form of pre-roll. Despite the fact that investments in strategies implementing video content turned out to be money wisely spent, they were not the ones that were the most frequently used by the advertisers.
Do you CEE? 2011
Nevertheless, similar to the video content sites, the main obstacles for further development of online video advertising is internet speed. Investing in video creatives does not really make sense when the users do not have a stable internet connection allowing them to view such demanding content (in terms of amount of data streamed). Therefore, before these rich-media formats start to really dominate the market, it is indispensable that more users have fast and reliable connectivity with the Web. This may be a matter of at least a few years, since according to the Eurostat data, the CEE region is still behind the most advanced Western European economies when it comes to broadband penetration.
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The power of IAB Europe comes from its extensive membership at both country and corporate levels. Country members: Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine and United Kingdom representing their 5.000 members. The IAB network represents over 90% of European digital revenues and is acting as voice for the industry at National and European level. Corporate and associate members: Adconion Media Group, Adobe, ADTECH, Advance International Media, Alcatel-Lucent, AOL Advertising Europe, AudienceScience, Banner, BBC Advertising, CNN, CoAdvertise, comScore Europe, CPX Interactive, Criteo, eBay International Advertising, Emediate, Expedia Inc, Fox Interactive Media, Gemius, Goldbach Media Group, Google, GroupM, Hi-Media, Koan, Microsoft Europe, Millward Brown, News Corporation, NextPerformance, nugg.ad, Nielsen Online, OMD, Orange Advertising Network, PHD, Prisa, Publicitas Europe, Quisma, Right Media, Sanoma Digital, Selligent, TradeDoubler, Tribal Fusion, Triton Digital, Turn Europe, United Internet Media, ValueClick, Verisign, Viacom International Media Networks, Webtrekk, White & Case, Yahoo! and zanox.
regional comparision
Market size & market development

Online Landscape
In 2011 the CEE region witnessed further development of the internet market. Despite the fact that there are still visible regional differences, there are also some common features that characterize all of the countries from this part of Europe. Broadband penetration for each of the CEE countries is lower than or equal to the average broadband penetration calculated for the 27 EU countries (67%). Consequently, there is still a discernible gap between the most developed countries from the Western part of Europe (UK, Sweden, Denmark, and the Netherlands) and the CEE member countries. Nevertheless, the pace of growth observed in the region proves that it has a huge potential for catching up with the European leaders. In 2011, two of the countries from the region Romania and the Czech Republic were among the top 10 countries in the world with the fastest internet connection speed, according to data provided by Akamai (2010). Internet population and internet penetration are growing across the whole CEE region and 2010 -2011 year-on-year growth exceeded, in some cases, the threshold of 10%. Therefore, the online market of the CEE can be still perceived as the most dynamically developing in Europe and a lot of fascinating changes are expected to occur in the region in the near future.
Do you CEE? 2011
Market Size
In December 2011 the total internet population in the CEE region amounted to nearly 144M web users. There has been a noticeable growth in the number of Real Users across almost every country from the region. The total online audience in this part of Europe increased by 9.2% in 2011 in comparison with 2010. As a consequence, over 12M additional CEE web users appeared online in 2011. The size of the internet population is strictly determined by the size of the country. Therefore, the biggest CEE countries Russia, Turkey, Poland and Ukraine take the lead in this part of Europe. Among them, Russia is a tremendous market whose online population constitutes 38% of the whole CEE internet audience. Moreover, Ukraine presents a very unique case since its total population (45.8M people in January 2012) greatly exceeds the population of Poland. However, the size of Ukraines online population places it in fourth place in the CEE region, with approximately 3M web users fewer than Poland. If the pace of growth of the number of internet users stays pretty much the same in the coming years, within two or three years the proportions will reverse. Amongst the smaller countries from Central and Eastern Europe, Slovakia is visibly ahead of the others where the size of the online audience is concerned, followed by Croatia and Lithuania.
While analysing the situation on the internet market in the CEE region, the y-o-y growth of online population also has to be taken into consideration. These statistics show how fast the country is developing. It is especially of focal importance for the less digitalised countries in order to check how big the potential that slumbers on these markets is. Four countries in the region experienced a growth rate of internet population of over 10% in 2011 - Belarus, Ukraine, Russia and Croatia. In the first two countries especially, the internet audience is literally exploding at a yearly rate of around 20%. Such fast growth in the size of online audience shows that online is a more and more representative channel for reaching members of various target groups. The internet in Russia, the biggest CEE market, is also thriving. Almost 5.7M additional Russian users started to appear online in 2011, which is comparable to the total population of Slovakia. The online population in Croatia also suddenly started to expand, as this Balkan country was the slowest developing online country across the whole CEE in 2010. In some countries, such as Hungary, Latvia, and the Czech Republic, user growth clearly slowed down in 2011. These three countries were among the leaders in the CEE region with respect to the dynamics of a yearly increase of online audience in 2010. In 2011 the situation completely reversed, which proves that at some point in market development the market starts to stagnate. In 2011 the slowest online population growth was experienced in the Baltic states and Slovenia.
Market development
Internet penetration seems to be the most adequate indicator of the online market development in a specific country. It measures how big the percentage of countrys inhabitants who have access to the internet is and, therefore, this indicator is not dependant on the size of the country. It shows precisely how mature the market is and what part of the countrys population suffers from digital exclusion. A brief look at the internet penetration data is enough to see that there are quite huge disproportions in the region. In 11 out of 15 CEE countries more than half of the population is online. Russia is quite close to joining this group of countries in 2012, as 45.7% of its inhabitants had access to the World Wide Web in 2011. Nevertheless, internet penetration in the three countries occupying the bottom positions: Turkey, Romania and Ukraine - is considerably lower and does not exceed 41%. In 2011 the highest penetration rates were observed in the Baltic states and the Czech Republic. Nevertheless, even the internet penetration in the most advanced CEE country
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Estonia (76%) is far lower than in the highly developed countries of Western Europe the Netherlands (94%), Luxembourg and Sweden (91%) or Denmark (90%) (Eurostat, 2011). Therefore, despite the fact that the most advanced CEE markets could be considered as saturated with respect to internet penetration, there is still a long way to go to reach the highest European standards. Internet penetration increases most dynamically in countries characterized by the lowest reach of the internet among their inhabitants Ukraine (+36%), Belarus (+22%) and Romania (+20% year-on-year). As one can see, internet penetration grew in each of the CEE markets in comparison with 2010 and this is undoubtedly very good news. The World Wide Web in the region is on the rise and the average penetration level in the CEE increased by 3pp in 2011 which amounted to 55%. Access to the internet is not the only important indicator of a specifics country online market. Broadband penetration provides more insight into the situation on the local online market as it shows whether the inhabitants of a specific country can enjoy a faster and more stable internet connection, which is indispensable for increasing customers engagement
Do you CEE? 2011
in online activities. Users with a broadband connection are more inclined to watch videos online, play games, etc., therefore advertisers have more opportunities to approach them with more creative formats and strategies. It is very evident that only Slovenia, with a broadband penetration rate equal to 67%, reaches the European Union average. Estonia, the Czech Republic, Hungary and Poland are close to catching up with the EU average as all of them enjoy broadband penetration higher than 60%. Nevertheless, there are several countries in the CEE region that are far behind the European standards. The case of Romania, Turkey and Bulgaria is particularly striking as all three countries have a broadband penetration level lower or equal to 40%, which means that fewer than every second inhabitant can enjoy a stable and relatively fast internet speed. Despite the noticeable chasm between CEE countries and the most developed Western countries in the European Union (Iceland, Sweden, Denmark and the Netherlands) with respect to the quality of internet connection, the leaders in the Central and Eastern Europe are still ahead of some old EU countries. Greece, Italy, Cyprus and Portugal, in particular, are lagging behind the Western countries of the old continent with a broadband penetration lower than 60%.
Broadband penetration [%]
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
EU (27 countries)
Croatia
Broadband penetration - 2011
Ireland
Slovenia
Slovakia
Bulgaria
Romania
Estonia
Czech Republic
Hungary
Lithuania
Iceland
Sweden
Denmark
Netherlands Finland
United Kingdom
Germany
Belgium
Austria
Portugal
Norway
Chart 1. Broadband penetration Source: Eurostat, 2011
Luxembourg
Greece
Poland
Latvia
Turkey
Malta
France
Spain
Cyprus
Italy
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Internet penetration 2010-2011
Internet penetration [%] 80% 70% 60% 50% 40% 30% 20% 10% Czech Rep. 0% Latvia Lithuania Slovenia Poland Croatia Russia Turkey Romania Bulgaria Slovakia Hungary Belarus Ukraine 40% 35% 30% 25% 20% 15% 10% 5% 0
Do you CEE? 2011
Estonia
2010
2011
change in %
Chart 2. Internet penetration Source: Estonia: Turu-uuringute AS; Lithuania: RAIT; Latvia: SKDS; Czech Republic: Mediaresearch; Slovenia: Valicon; Bulgaria: Synovate; Slovakia: Mediaresearch; Hungary: Ipsos HU, Gemius; Poland: Megapanel PBI/Gemius, netTrack Millward Brown, GUS; Croatia: Valicon; Belarus: Factum Bel; Russia: FOM; Turkey: Gemius / Ipsos KMG: IAB Turkeys Internet Audience Measurement; Romania: National Institute of Statistics Romania; Ukraine: GfK.
Growth 2011-2010
Do you CEE? 2011
Opinions from the market

a report published earlier this year. In Russia the numbers are lower, about 1.6% of GDP is coming from the internet economy. The reports for Poland and Czech Republic also make some bold predictions for the future: in Poland, the internet economy will be worth EUR 92 billion by 2015, or around 4-5% of GDP and in the Czech Republic the internet economy will grow at 12% per year, catching nearly 5.7% of GDP in 2015 (reports: www.polskainternetowa.pl, www.internetcountry.cz). So, how can Central and Eastern European governments ensure that they realise the full potential of the internet economy and catch up with Western countries sooner rather than later? First and foremost, there must be a continued focus on creating the right general conditions to enable businesses to go online, grow rapidly and take advantage of the opportunities of cross-border sales in Europe and beyond. This starts on the demand side. European consumers are keen to engage in the online world, but there is still a lot of room for growth, as European Commission research shows: 40% of Europeans have bought products online already, rising to 60% for those Europeans that have regular access online. Similarly, nearly 40% of European consumers are prepared to buy from a website in another language, rising to 70% amongst those who have already shopped online. Its clear that once people have experienced the benefits of online commerce, they are more willing to do so again. To help the number of people participating in the internet economy grow, both governments and the private sector need to work on the best ways to develop online consumers trust. Increasing consumer confidence in the online economy on its own will not be enough. Large parts of European society are still not using the internet. In Poland, for example, around 40% of households dont have access to the Web. And the digital gap is not only related to the lack of access: around 78% of Polish people in the over-fifty age group are not internet users, a phenomenon that can at least partly be attributed to a lack of familiarity with the online world. Similar challenges exist on the supply side too. The benefits for businesses resulting from going online are clear - and hundreds of thousands of companies across Europe are already playing an active part in the internet economy. Yet, there is a confidence gap here too: there are still many
Artur Waliszewski Regional Business Director Poland & CEE Google

The internet has become part of everyday life in Europe. Today around 60% of us use the internet regularly - to communicate with each other, entertain ourselves, to perform bank operations, and to shop and work in ways that seemed science fiction only ten years ago. Consumers benefit from increased choice and enhanced competition, both in their own countries, and across Europe. But it is not just consumers who benefit. Central European businesses - and in particular traditional, micro, small and medium businesses - are going online in their hundreds of thousands to reach customers and audiences far beyond their traditional operation areas, both nationally and internationally. The scale of this online activity is increasingly being reflected in GDP, and in the number of jobs created as a result of online commerce. According to a recent McKinsey Global Institute report, issued concurrently with the e-G8 Forum (report: www.eg8forum.com/en/press) in May 2011, the internet accounted for 3.4% of GDP, averaged across the thirteen countries surveyed - more than agriculture, energy and several other traditionally large industry sectors. Until 2015, in France solely, more than 450 thousand jobs will be created, thanks to the internet economy. The same report also shows that small and medium businesses using the internet grow twice as fast and export twice as much as their competitors and that 75% of the economic impact of the internet is generated not by firms born on the web, but by traditional industries. These trends are also highlighted in a series of economic impact reports commissioned by Google (www.valueoftheweb.com), in which some Central and Eastern European countries have been included. According to the reports published in 2011, in Poland the internet economy already accounted for 2.7% of GDP, and in the Czech Republic it was even more important, reaching 3.6% of GDP. The internet amounts to as much as 3.9% of Hungarys GDP, according to
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so-called traditional businesses: the shoe-repair shop in your local town, the hairdresser, even the grocery shop - that are not online at all and are missing out on local, national and, potentially, even Single Market business opportunities. Small and medium businesses which are active online are growing faster and export more than companies which are not online yet. Nevertheless, about 50% of Polish SMBs are not active online, which means they dont have a website or are not advertising online. Take for example a traditional butcher from Warsaw, Befsztyk.pl a few years ago they launched a website, on which they sell meat and sausage over the internet. They started in Warsaw, but now they send some of their products all over Poland. Before Easter and Christmas they have an income several times bigger than in the days before their online presence. At Google weve been working to close that gap by forming partnerships with government departments, web hosters, telcos, postal services, and others, to give small businesses the confidence to go online for the first time and to develop their online presence. In 2010 in Poland, working together with the Ministry of Economy and PKPP Lewiatan, we launched the Internet Revolution project that helped get more than 50,000 small and medium-size businesses online (www.internetowarewolucja.pl). The enormous interest in learning about and using internet tools has given the project real impetus and it has now been rolled out in other Central and Eastern European markets including Hungary, the Czech Republic, and shortly Russia. Nowadays there are no online borders for companies. Businesses from the CEE can sell to any market without a physical presence there. The only requirement is: the company needs to be online. Also, it is important to remember that exactly the same applies to every other European Union country, including Western and more developed countries. The thriving online of SMBs is the key success factor for our region to grow and be competitive to the rest of Europe and the World. Our goal should be to help SMBs release their full potential from being online.
Do you CEE? 2011
Micha Kostrzewa Online Audience and Marketing Lead CEE Microsoft Advertising & Online
Understanding the online audience recently became more complicated as the traditional, quantitative approach, sometimes reduced to a single thing called penetration, has become insufficient. The number of connected devices is growing much faster than the number of people using the internet. Not only are more people connected, but they are spending more time on the network, use it more frequently and for new purposes, going far beyond communication or browsing the Web. Online gaming consoles and connected TV sets are examples of devices that generate millions of hours of internet usage without the need of a computer. But primarily it is the smartphone revolution, along with the growing popularity of mobile computing devices (laptops, netbooks, tablets), that makes it not uncommon for people to have two or three broadband connections, some of them from a mobile operator. These trends have been very strong in the USA and Western Europe for a few years already, but now have become an important part of CEE markets. It is important to keep in mind this multi-dimensional growth while analyzing online audience growth. It is also important to mention that mobile internet growth is not only limited to the most developed countries. On the other hand, in many emerging countries many people have their first experience of the internet on a mobile phone not on a PC, and this is usually not a smartphone but standard feature phone. For example, in Turkey PC penetration is only 30% while mobile penetration is almost 100% - this makes the growth scenarios for such online audiences completely different from what we know of CEE EU-member countries like Poland, Hungary or Czech Republic. In 2011 the growth of internet population (measured as number of people having access to the internet) continued in all CEE markets; internet population grew almost 10% to over
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140 million. This was not so much different to what we have been seeing in the past few years in spite of this, the profile of the region is undergoing another significant change which is worth mentioning. The source of this change is the different dynamics across various markets. Overall, broadband penetration in the CEE is still far below the Western European average. There are markets that have already reached the average level for Western Europe (67%). These are usually small EU member countries like Czech Republic or Slovenia, where the fast growth of broadband already happened a few years ago and recently flattened out this means that these markets will soon be saturated. It is important to understand that the level of saturation of CEE countries, even the most developed, is lower than in Western Europe and it is unlikely that any of these markets will reach penetration of 90 percent in the foreseeable future, like the Netherlands or Nordic countries. The root reason for this is different social structure of post-communist countries, with bigger groups of people living in poverty and with less sophisticated needs. It is also important to understand the sources of this growth: internet penetration differs between the largest cities and rural areas. For example penetration in Moscow is 80%, which makes it not much different from Western European capitals, while some rural areas in Russia may have penetration of less than 20%. Such discrepancies are typical for the whole region where social development is less balanced than in Western Europe, however they are most visible in countries like Ukraine or Russia (lower GDP, large area, less effective market regulations). Besides the well-developed but small to medium markets that already achieved audiences similar to Western standards, there are three giants with huge growth potential. These are Turkey, Ukraine and Russia. While Turkey has been reporting stable, high-single digit growth in recent years, the growth has skyrocketed in post-soviet countries. Impressive growth in Ukraine, Belarus and Russia shows that the gap is likely to decrease during the forthcoming years and the differences across the region will not be so visible. The fact is that Ukraine, having the lowest penetration in the region, is already the 4th largest market in absolute number of users. Russia is already the largest market in the whole of Europe in terms of number of users. Despite relatively low penetration it already boasts of almost 60 million people online, which is more than Germany, which until 2011 was at number one. The growth there is still very high and more and more money
Do you CEE? 2011
is flowing to the online advertising industry. We can predict that these trends will continue and soon Russia will be one of the largest markets worldwide. Anyway, in 5 years from now Russia and Ukraine combined will make 50% of the overall CEE internet population; Turkey another 20%; with all remaining markets reaching only 30% - such a picture will be completely different from that seen so far and from what we usually think about the region. It will be impossible to be a meaningful regional player without a strong presence on these 3 markets. What does this mean for online business? We still dont know. International players have so far not been successful with expansion into Eastern European markets. Big audiences and more money on the Russian and Ukrainian markets will help local companies keep their high market share, like Yandex or Mail.ru Group, and to push their global strategies faster. The change in the CEE market may have a global impact.
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ONLINE ADVERTISING
Market potential
It is important to mention that although the previous edition of the Do You CEE? report was describing the internet advertising spendings trends in 2009, the 2011 publication touches upon both the years 2010 and 2011. For both years the AdEx results from IAB Europe have been used where possible and this data is further enriched with the adspends data collected from other data providers for the markets where AdEx data was not available. The 2010 AdEx data differ for some countries from the data presented in 2010 Do You CEE? publication. This is a consequence of the fact that in order to ensure like-for-like comparability, market values for 2010 have been adjusted to include the same categories (e.g. video, social) as in 2011. In order to eliminate the effect of currency fluctuations, a constant 2011 exchange rate has been used for both 2010 and 2011 data. Coming back to the market results, it is certain that online advertising is the future of marketing, and the region of Central and Eastern Europe is not an exception when it comes to this phenomenon. In 2010 the growth of total internet adspends amounted to 59% and with online adspends reaching nearly 1.8 billion EUR across all of the countries in the region (IAB
Do you CEE? 2011
AdEx, 2009 & 2010). In 2010 the biggest countries in the region were leading with respect to the total online adspends volume. The online advertising market in Russia was not only the largest, but also one of the most dynamically expanding in the CEE. In 2010 the total online adspends in Russia were equal to 720.6M EUR and, in comparison with 2009, the amount of money spent on various online advertising strategies grew by 78.7%. The other two countries that registered the highest amount of online adspends in 2010 were Poland (356.7M EUR), and Turkey (286.5M EUR). It is of focal importance to notice that Turkey advanced significantly in the region in 2010 with respect to the volume of total adspends and surpassed the Czech Republic in this ranking. The online advertising market in Turkey is also developing the most rapidly and the increase in online expenditures amounted to 137.9% in 2010. The second fastest growing market in the region was Russia, with a y-o-y increase of online adspends equal to 78.7% and the third one was Ukraine, with online budgets growing by 77.3%. On the other hand, Slovakia was leading among the smaller-sized CEE countries in total online adspends volume and came ahead of Ukraine, the third biggest market in the CEE. Last but not least, when all the countries from the region are taken into consideration, it can be seen that the slowest pace of growth with respect to the total volume of internet
Countries with online adspends > 100M 1 200M 1 000M 800M 30M 600M 20M 400M 10M 50M
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Chart 1. Online adspends in the CEE region in 2009,2010 and 2011 Source: IAB AdEx 2009, 2010, 2011. European Online Advertising Expenditure; Ukraine: Ad Coalition (net); Estonia: TNS Emor (net); Latvia: Latvian Advertising Association (net); Lithuania: TNS LT (net); Belarus: Zenith Optimedia (gross); Bulgaria: Piero 97.
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ONLINE ADVERTISING
adspends was witnessed in Latvia (1.6% y-o-y) and Hungary (12.9% of growth from 2009 to 2010 y-o-y). In 2010 all the other countries reported an increase in online advertising budgets exceeding 17% in comparison to 2009. And how much money came to the industry last year? It seems that 2011 was a rather harsh year for some of the countries in the region and the European economic crisis and the instability on the old continent was also visible in the digital industry. The pace of growth of online adspends in Central and Eastern Europe visibly slowed down in 2011 in comparison with 2010, by 25pp, and the y-o-y growth was equal to 34%. In 2011, in total, slightly more than 2.5 billion EUR was allocated to advertising in the online channel in Central and Eastern Europe. From a global perspective, Web advertising is steadily growing and the internet is attracting more and more money from advertising budgets. Such development of the online market occurs since the internet audience is steadily expanding and certain target groups (especially youth) are spending an increasing amount of time online, becoming truly engaged with the content. Internet users around the globe can be seen to be enjoying such services and communication/information more and more, seeking methods like internet search, social networking and gaming, and consumption of video content all of these trends opening up new opportunities for effective internet advertising strategies. Marketers nowadays have the opportunity to come up with innovative approaches while integrating various channels and methods available online: contextual advertising, search advertising and different, more creative tactics like viral video adverts or various display formats, including the IAB Rising Stars Display Ad Units such us Billboard, Filmstrip or Slider are aiming at enhancing internet users engagement through improved interactivity. As a result, according to the estimation of the GroupM internet advertising hit in 2011, $84.8 billion, corresponding to a 16% of y-o-y growth in comparison with 2010. In 2011 online advertising constituted 17% of total global adspends. The mood is especially positive in the United States, where in 2011 Forrester Research predicted that by 2016 online adspends will overtake TV. In 2011 across the European markets included in the AdEx yearly report (for more details see Methodological note) total online advertising expenditure amounted to 20.9 billion EUR, which constituted an increase of 14.4% in comparison with 2010. This is a very good result for online, taking into consideration the tough economic conditions. Search turned
Do you CEE? 2011
out to be the fastest growing online ad category. Internet also strengthened its position across various communication channels implemented in the marketing campaigns with 21.8% share of online adspends in the total adspends in 2011. Furthermore, video and mobile advertising gained leverage in Europe. When a closer look at the CEE region is taken, the situation on the internet in the region does not seem to be so onedimensional. In 2011 there were some markets where internet advertising was soaring, but also several with a rather more stable situation on the internet and those which struggled for marketers budgets. According to current forecasts for 2012 (Global Advertising Forecast from US market intelligence company Strategy Analytics) the global growth of advertising expenditures will be predominantly driven by the most dynamically expanding Central and Eastern European countries Russia and Turkey, where the level of total adspends is at the moment much lower than in the most mature, Western markets, but where the dynamics of growth are currently remarkable. There are several countries in the region (Russia, Ukraine, Croatia, Slovenia, Slovakia, Turkey and Poland) for which 2011 was an exceptionally good year. What is more, all these countries were the fastest growing internet markets across the European countries included in the AdEx report, surpassing all the countries from Western Europe. Among them, Ukraine experienced the largest boom in online advertising, with expenditure for internet adspends soaring to 42M EUR, denoting a y-o-y growth equal to 58.5%. Nevertheless, there is a long way to go for this Eastern European market until maturity is reached. When market size is taken into consideration, online adspends in this country are still far too low. Ukraine is more than six times bigger than Bulgaria, but the expenditure for internet advertising in 2011 was only two times higher than on the latter market. In terms of segments, search advertising was growing in Ukraine much faster than the rich-media segment. Video advertising gets a lot of marketing attention as an effective way of engaging customers, but in 2011 it was still not so widely used in online promotional campaigns. This way of advertising, far more interactive than the other more standard online formats, is expected to grow rapidly in 2012. The first attempts at introducing sponsored content on websites occurred in Ukraine in 2011. Nevertheless, this marketing approach did not elicit the enthusiasm of the market players and should be perceived rather as an experiment at the moment. It is worth adding that in spite of very positive trends in internet advertising, total advertising expenditure slowed down in the
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online advertising
last two quarters of 2011 because of the general atmosphere in the European economy. The online adspends also shifted significantly upwards in Russia. According to the IAB Europe AdEx data the total amount of money allocated to online in Russia grew by an impressive rate of 55.5% in comparison with 2010. Consequently, online overtook print and became the second largest advertising medium behind TV. The Russian advertising sector is recovering fast after the global economic crisis, when, according to the AKAR figures, overall main media adspends decreased by more than 25% (2009). In 2011 Russia was among the European countries with the highest volume of internet adspends next to the UK, Germany, France, the Netherlands and Spain (IAB Europe AdEx, 2011). 2011 was also a good year for the internet in Croatia. The adspends allocated to online grew by nearly 40%. The fastest developing online advertising categories on the Croatian market in 2011 were display and search with y-o-y growth rates of investments exceeding 47%. The total online adspends in Croatia in 2011 amounted to 26.3M EUR. In neighbouring Slovenia the internet is also dynamically attracting more and more marketers money. The Slovenian internet adspends market grew in 2011 by 31.1%. Search advertising there was impressively developing in 2011 especially, since the y-o-y growth in 2011 for this category exceeded 66%. Back in 2010, the Slovakian online advertising market was one of the fastest growing in the CEE region with a 42% of y-o-y growth according to AdEx data. In 2011 the development of this market decelerated, but Slovakia remained one of the most dynamically developing CEE markets. Slovakia concluded 2011 with nearly 45M EUR allocated to the internet. The online advertising category that was growing the most dynamically in 2011 was classifieds and directories, with a 34% y-o-y increase in advertising expenditure. Banner ads attracted the highest amount of money and closed the year with 44% share of total online adspends. Nonetheless, the relative importance of this online advertising strategy is visibly decreasing in comparison to other formats used on the Web. Turkish advertising industry is also experiencing a significant increase in the adspends allocated to the internet. In 2011 the total online advertising in Turkey was equal to 360M EUR. From this amount 147.1M EUR were allocated to the display and mobile advertising, which corresponds with nearly 36% of y-o-y growth (Advertising Association). The growth rate in Turkish online adspends is not expected to slow down in the near future.
Do you CEE? 2011
Poland is unquestionably one of the most mature markets in the region and is still developing quite dynamically. In 2011 the total volume of online adspends in this country amounted to 439M EUR, which corresponds to a 23.1% y-o-y growth the fastest increase across all media channels. In Poland the expenditure for both video and mobile advertising campaigns, which are already perceived globally as the future of online advertising, was growing. Moreover, the market sectors that previously were not so active online (clothes, pharmaceuticals, household chemicals) started to notice the potential of the internet in developing marketing strategies, and as a consequence invested more heavily in this channel. Over the past two years (2009-2011) search engine marketing turned out to be the fastest developing online advertising category in Poland and its share in total online adspends for 2011 amounted to 33% (IAB AdEx 2011Full-Year). The other countries in the region experienced a more moderate increase in digital adspends. 2011 was a rather stable year for Hungary, the Czech Republic, Bulgaria and the Baltic states. The Hungarian internet advertising market has been growing at a stable y-o-y rate of 12.9% since 2009 and the total internet adspends in 2011 amounted to nearly 108M EUR. The share of online adspends in the total advertising budgets was equal to 18.8%. The increase in online adspends in Hungary was predominantly driven by search. Nevertheless, display still constitutes the most used advertising format on the Hungarian internet. Mobile advertising seems to be the new way of attracting customers, since this category entered the market in 2011 with a respectable 2.6M EUR in adspends and is predicted to expand very fast due to growing interest in the marketing world. The share of mobile display in online display in Hungary in 2011 amounted to 1.7% and was the highest across all the countries in the CEE region included in the IAB Europe AdEx research. In the Czech Republic the online advertising market, after very dynamic development in 2010, noticeably decelerated in 2011. In the latter year online adspends grew by a mere 10.7% and amounted to 268.9M EUR. The share of internet advertising expenditure in the total volume of adspends in 2011, according to SPIR data, amounted to 14.3%. In 2011 the most popular segments of online advertising on the Czech market were display and performance-based advertising. The investments allocated to classifieds and directories category shrank by 9.4% in comparison with 2010. At the moment internet is the third most popular medium among Czech advertisers and the first forecasts issued by SPIR estimate a 15% y-o-y growth for online advertising in 2012.
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Online advertising
Online adspends per internet user
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Do you CEE? 2011
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Chart 2. Online adspends per internet user in 2011 Source: IAB AdEx 2009, 2010, 2011. European Online Advertising Expenditure; Ukraine: Ad Coalition (net); Estonia: TNS Emor (net), gemiusAudience (data collected using TURU - UURINGUTE AS research); Latvia: Latvian Advertising Association (net), gemiusAudience; Lithuania: TNS LT (net), gemiusAudience; Belarus: Zenith Optimedia (gross), gemiusAudience; Bulgaria: Piero 97, gemiusAudience (data collected using Synovate research); Ukraine: gemiusAudience; Hungary: gemius/Ipsos Fusion data; Latvia: gemiusAudience; Turkey: Gemius / Ipsos KMG: IAB Turkeys Internet Audience Measurement; Czech Republic: NetMonitor - SPIR - Mediaresearch & Gemius; Romania: Mercury Research; Slovakia: AIMmonitor - IAB Slovakia Mediaresearch & Gemius; Poland: Megapanel PBI/Gemius; Slovenia: MOSS-SOZ - Valicon/ Gemius; Russia: Gemius estimation based on FOM statistics/gemiusAudience data; Lithuania: gemiusAudience; Croatia: gemiusAudience [age groups - CEE:15+; Russia 18+; Romania 14-64; Lithuania: 15-74].
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Across the Baltic countries, the online adspends market is developing the fastest in Estonia. Nonetheless, in this whole subregion of Central and Eastern Europe the dynamics of growth in internet advertising is quite comparable. The highest amount of money for internet advertising in 2011 was spent in Estonia (11.5M EUR) and the least expenditure was allocated to online in Lithuania (8.1M EUR). According to the Latvian Advertising Association, internet has currently the second highest share in total adspends (17%) in Latvia, behind TV (45%), and amounting to 9.8M EUR. On the Lithuanian market online advertising expenditure increased the most across all media channels in 2011 (12% y-o-y growth rate), closely followed by the cinema (11.1% y-o-y growth rate). Bulgaria is the country which enjoyed very promising growth rate in the years 2009-2010, when internet advertising budgets increased y-o-y by 38%, but slowed down in 2011. The Bulgarian advertising market grew last year by 13.4% y-o-y and the total volume of online adspends amounted eventually to 30.5M EUR. 2011 was a rather hard year for the advertising market in this country and the whole advertising
sector experienced a 6% decrease in the total volume of expenditures. In 2011 advertisers invested more money in both display and click-ads. The first forecasts made by IAB Bulgaria for 2012 signal an increase of 8.5% in online advertising expenditure y-o-y. In Romania online advertising expenditure grew by a mere 4.8% in 2011 in comparison with 2010. Across all the online advertising categories, search was the fastest growing internet advertising type with a remarkable y-o-y growth of 69.9%. Display advertising is still the most important advertising category on the Romanian market with 2011 expenditure amounting to 20.3M EUR. Last but not least, one of the CEE countries, Belarus, contrary to the general adspend trends visible in this part of Europe, experienced a decrease in the volume of online advertising in 2011. In Belarus, according to ZenithOptimedia data, nearly 4.4M EUR was allocated to online in 2011. According to ZenithOptimedia, in comparison with 2010 the volume of the internet market in Belarus decreased by 16%. Nevertheless,
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Online advertising
2011 was a rather harsh year for the whole advertising market in Belarus, since expenditures decreased across various media. As a consequence, the share of internet advertising in the media mix grew from 7% in 2010 to 9% in 2011. The total value of internet adspends does not always accurately represent the potential and the situation in the online advertising reality, as this indicator is influenced by country size. Online adspends per internet user, on the other hand, show how much money is spent in a particular country per an individual web user, providing more insights into how companies try to attract inhabitants of the CEE countries, using online marketing. The analysis of adspends per internet user shows that there is a huge diversification in the region with respect to the maturity of the local markets. In 7 out of 15 analysed markets the online adspends per internet user exceeded 15 EUR, which is a very promising result. When the online adspends per user are taken into consideration, it can be seen that a few in the region the Czech Republic, Slovakia and Slovenia are particularly advanced. The Czech Republic is the country with the highest amount of advertising money spent per internet user and this amount was equal in 2011 to 45.7 EUR/capita. The Czech Republic is also far ahead of the other markets when it comes to attracting individual internet users through online advertising, outnumbering the online advertising expenditure per user in Poland (2nd place) and Slovenia (3rd place) by around 20 EUR. Russia, leading in the CEE when absolute volume of adspends is considered, comes fifth among the Central and Eastern European countries with 20.4 EUR spent per internet user in 2011. Ukraine, the third biggest country in the region in terms of total population, remains in one of the lowest positions among the CEE countries with only 3.1 EUR spent per web user. Nevertheless, there are still CEE countries with adspends per internet user lower than those in Ukraine. In Romania advertisers spent a mere 2.8 EUR per web user and in Belarus, closing the list of CEE countries, the expenditure per individual internet user was equal to 1 EUR.
Do you CEE? 2011
The data presented in this report will be predominantly based on the results of gemiusAdMonitor, a periodic publication prepared by Gemius for the second half of 2011 in Poland, Slovakia, Hungary, Bulgaria, the Czech Republic and Romania. Nevertheless, comparisons with the first half of 2011 will also be outlined. The outcomes of the particular online advertising strategy implemented by a given company can be evaluated on the basis of one of the most popular and most comparable indicators Average CTR (Click Through Ratio an average of quotients cookie clicks/cookie impressions for each creative of a given ad format). When this criterion is taken into consideration on a country level, Poland is indisputably leading across the countries researched, with CTR equal to 0.56%. There have been some significant changes concerning the effectiveness of digital campaigns in comparison with the first half of 2011. Poland overtook Slovakia with an increase in CTR equal to 0.1pp. Hungary also advanced to the third position among countries with the highest average clickthrough-ratios, surpassing the Czech Republic with an increase in CTR equal to 0.11pp. The countries with the lowest level of online adspends per internet user (Bulgaria and Romania) are also characterized by the lowest values of CTR. When the online ad formats are taken into account, regular banners still prevail amidst the advertising types implemented in digital campaigns in the CEE region, and the share of campaigns using these more traditional online formats in each of the analysed countries exceeds 85%. In Poland the landscape for digital advertising is discernibly more diverse than in other countries from the region, with more interactive formats such as Pre-roll, Toplayer, Wideboard and Video having a share of campaigns higher than 9%. What can be seen across all the researched countries covered by the gemiusAdMonitor report is that the formats which are most often used by the online marketers are frequently not the ones that make users click the ad. On 5 out of 6 studied markets (except the Czech Republic) Pre-roll is among the three formats characterized by the highest value of CTR. In Romania, especially, Pre-roll is evidently extremely effective with a CTR value of 6.47%. Despite its remarkable performance, Pre-roll comes fifth among the most used ad formats, with a share of campaigns equal to mere 1.9%. A similar situation occurs in Hungary, where Pre-roll is at the same time the second most clicked ad format and the one that is the least frequently implemented in digital campaigns. The other internet ad formats that proved to be the most effective across the CEE countries were Video, Wallpaper and Toplayer.
The Effectiveness of Online Advertising

While analysing the situation on the online advertising market in the Central and Eastern Europe, it is essential to take a closer look at its effectiveness in the region. gemiusDirectEffect, the online campaign effectiveness measurement, and AdOcean, the Gemius adserver for publishers, provide some crucial insights into the performance of various display campaigns applied across several countries in this part of Europe.
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Online advertising
Share of ad impressions
Bulgaria 40% 35% 30% 25% 20% 15% 10% 5% 0% Czech Republic Hungary Poland Romania Slovakia
Do you CEE? 2011
Foo d Tel rok eco era mm ge un i c ati Fin ons anc Au e, I t nsu om ran oti ve ce, B Tel rok eco era mm ge un ica tio ns Au tom Tel eco oti mm ve un ica Fin tio anc ns e, I nsu Tra ran de ce, Bro ker Fin age anc e, I nsu Tra ran de ce, Bro ker age Lei sur eT Fin ime anc L e, I eis nsu ure ran Tim ce, e Bro ker age e, B
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Chart 3. Share of ad impressions per sector (gemiusAdMonitor H2 2011)
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It also seems relevant to look at which sectors are the most active online and whether their share in the number of digital ad impressions on the specific market translates to a higher value of CTR. Among all the countries covered by the gemiusAdMonitor report the Finance, Insurance and Brokerage sector is noticeably the most active in online advertising. Companies from this particular market segment purchase the most ad impressions in the Czech Republic (31.4%) and in Hungary (33.4%). In both these countries the share of ad impressions bought by financial businesses significantly surpasses the percentage of ad impressions ordered by companies belonging to the second most active in digital advertising sector - Telecommunications (23.10% in the Czech Republic and 20.1% in Hungary). Moreover, the sectors characterized by the highest share of ad impressions on the particular CEE market are overlapping to a greater degree across countries from the region. It leads to the conclusion that, apart from the abovementioned Finance, Insurance and Brokerage segment, firms also active in Telecommunications, Leisure Time, Trade, Food and Automotive are the ones that are advertising online the most heavily in the researched markets of Central and Eastern Europe.
Nevertheless, customers preferences for clicking on a specific ad and, consequently, obtaining more information about an advertised product or service seem to be more country-specific. It is a rather rare occurrence that sectors with the highest share of ad impressions on a particular market are also the ones that have the highest CTR. The segment of Finance, Insurance and Brokerage, especially seems not to be very attractive when it comes to users ad clicks and occupies one of the lower positions in the ranking in each of the analysed CEE countries. In Poland and Romania these types of ads are among the two least clickable categories. For every country studied in the gemiusAdMonitor report, the online ads of companies belonging to different market segments engage internet users the most. Bulgarian web users are clicking digital ads about pharmaceuticals the most eagerly; web ads about clothes & accessories especially appeal to the Czechs and Romanians; while Hungarians are most susceptible to online promotion of media, books, CDs & DVDs. Furthermore, online ads for household products are the most clickable in Poland, while the highest CTR is typical for the Telecommunications sector in Slovakia.
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Online advertising
Do you CEE? 2011
Tomas Lauko Managing Director Czech Republic CEE Digital Development Manager ZenithOptimedia
According to ZenithOptimedia data, 2011 was a year in which the growth of digital adspends in the CEE overtook the digital adspends growth in Western Europe. As weve witnessed over the last 6 years, the biggest challenge for the increase in digital ad spend share has been the share of TV investment in the CEE reaching a staggering 55% of all the budgets in 2011, with an impressive growth of 11% compared to 2010. Furthermore, 2011 was a year when online advertising conquered the 20% share in Western European ad spend. In most digitally advanced countries in Central and Eastern Europe (e.g. Czech Republic and Russia) this is expected to happen in 2013 or 2014. In 2011 in certain CEE markets we did witness the first break-through growth of the usually not so active categories in online advertising, Retail Chains and FMCG companies for instance. Globally, online display advertising investments growth overtook paid search growth in 2010, propelled by online video expenditures. 2011 was a year in which this trend resonated in the CEE as well, but online adspends still remained in the shadow of paid search. 2012 is expected to be the first big year for online video in the CEE as the potential of online video growth is great due to high TV advertising clutter, and relatively high prices. As a benchmark, on the most developed online market - USA - online video investments accounted for 12% of total digital spend in 2011. Paid search potential in the least developed markets in the CEE is still big, while in the most mature Western markets, like UK or USA, it is reaching shares from 40% up to 60% of total digital media spend (the European average in 2011 was 45%). If we benchmark this share with the most advanced markets in CEE (for example Russia, Czech Republic, Poland), 2011 was a year where the share of paid search in total online ad spends already reached or crossed this maturity threshold.
Our estimation is that the digital growth of the most developed markets like Czech Republic, Poland, Russia or the Baltic States will be driven by online video (besides already strong Performance investments) whereas in the less mature markets like Slovakia or Romania the growth will be driven mostly by Performance, Paid search, and Social CPC investments. In the display area the hottest topic on the Western markets is the switch from impression buying to audience buying through Demand Side Platforms (DSPs) and Real Time Bidding (RTB). In the CEE region 2011 was a year in which this trend entered the preparation phase with online video formats, as video content is already widely spread either through TV stations video content sites, through major portals video content or local and global online video sharing sites (e.g. stream.cz, youtube.com, rutube.ru and others). Overall, in 2011 the main driver of digital growth in the CEE was performance digital marketing, of which paid search is the major part. This growth was driven by the increasing awareness of the importance of an always on approach in paid search, by booming e-commerce, targeting and tracking technologies, and by Quantifiable ROI of performance digital marketing in comparison with offline channels or display advertising. The main reason behind the growth in value and share of performance marketing was a much better understanding of online advertising by the clients themselves. Weve seen a shift in focus from indicators, such as impressions and basic CTR, to more complex metrics and lead generation that allow measuring of ROI on digital investments. The online display market in the CEE changed as well. The biggest switch was from standard animated banner display to video and rich content. We estimate that the market of video display grew rapidly, not only in terms of advertising budgets, but also in terms of the number of publishers who either include video and rich formats in their offer or create dedicated video websites or sections with a focus on such placements. Last but not least, e-commerce itself has great potential to grow across the whole CEE region and this is demonstrated by the major investments of local, country specific e-commerce platforms, online shops and comparison services.
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Online advertising
In the nearest future, the main ingredients for the perfect growth recipe of display advertising are definitely online video, DSP/RTB, mobile and tailored editorial cooperation activities and social media integrated projects between brands and publishers. In the area of online video (and future auction based online video buying), clients and agencies are looking for a TV-like buying method, which will open up new possibilities for growth. The key to success is to gain low-enough CPT to make online video CPP cheaper than TV CPP, which is of utmost importance during high TV exposure months in spring and autumn. Above all, online video is a very powerful tool for building incremental reach for highly cluttered TV space, delivering much better recall and brand growth results. In addition, we expect DSP/RTB to play an important role in online advertising in the next 1-3 years on all CEE markets. A big buzz among agencies, marketers and publishers about this topic can be noticed and all stakeholders should already be taking action to prepare themselves for growing demand for this kind of service in the second half of 2012. The DSP buying model is very convincing for many marketers to reach precisely their defined Target Groups online while minimizing the wastage and boosting effectiveness and efficiency. In 2011 we finally observed mobile marketing playing a more significant role across the entire CEE region. Most of the major websites in the mature CEE markets have become mobilefriendly, many dedicated applications have been developed. In a large part of the CEE market smartphones already represent the majority of newly sold devices - for instance in the Czech Republic it was already over 50%+ of all the phones in 2011. Penetration of smartphones in the CEE varies very much but in the most mature markets, like Poland and Czech Republic, smartphones represented up to 20% of all mobile phones in use in 2011. The companies who are most ready and prepared to harness the future are those who will invest in their digital know-how and digital specialization functions within their marketing and sales teams. On the other hand, companies who wont invest in digital might soon struggle to cope with the required innovation and its implementation in near future. Therefore, education of the market within the verticals, and among all stakeholders, is critical. In the CEE this role is led primarily by the media agencies, with major local or international players (e.g. Google) and some of the research and ad serving companies (e.g. Gemius)
Do you CEE? 2011
To conclude, all of the above mentioned items are already the daily routine of major advertisers and their agencies in the region of CEE, who all together pioneer the change. Its interesting to witness how this innovation cycle reduces the distance between the West and the East. The next real big challenge for all marketers, agencies, publishers and media owners is offline and online integration, intra-connection and interpretation. All stakeholders will have to focus in the coming months on: business intelligence, cross channel dashboard developments, further reporting sophistication automation, CRM systems integration with social media activities, and API buying and optimisation. All of these have common denominators: Data and Technology. The sexiest jobs in the CEE in the years to come will be Analysts with a human touch and Statisticians with a real passion for numbers!
Belyaev Alexey Co-founder and Head of Research Committee IAB Russia
40% of the internet population out of all 15 CEE markets researched by Gemius lives in Russia, which is the largest digital market of the region not only in terms of size, but also the amount of money invested in internet advertising. The growing local audience (approx. 5M new internet users from 2010 - 2011) attracts advertisers and agencies who are introducing more and more effective online marketing strategies. The improvement of the infrastructure in Russia, and in the whole region, is another extremely important factor that helps the adoption of more advanced ad formats such as rich media or video advertising. These are the reasons why I will focus on the Russian market in my analysis. Nevertheless, in terms of other market leaders, we observed that our neighbouring country, Ukraine, had started to attract the attention of investors in 2011, mostly due to the swift pace of growth in the internet audience, as well as increasing investment in digital advertising. However, it wasnt Ukraine that took second place in the ranking of the highest internet marketing budgets in CEE in 2011. This place was taken by
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Online advertising
Poland, one of the most mature online markets in the region. Nevertheless, the eyes of global investors are currently more focused on Turkey, which is perceived as a country with immense potential due to the size of the market and the engagement of internet users who spend a lot of time online and generate a large amount of traffic on international sites such as Google, Facebook and YouTube. Additionally, Turkey is a huge market for social media marketing and advertising, since the highest number of Facebook users in Europe come from here. Last but not least, while talking about this region its worth mentioning Bulgaria and Slovakia, where despite the fall of adspends among other media channels, Web marketing spending grew y-o-y in 2011. For the Russian internet market 2011 was a year of further growth and this continued after the recovery from the crisis. Compared with 2010, the growth rate increased from 50% to 56% year on year, and the absolute value of the internet advertising market in Russia reached 1 billion euros (42 billion rubbles). Indicated growth rates are well above the growth rate for the advertising market as a whole, which showed 17% growth in 2010 and 20% growth in 2011. On the Russian market in 2011, the growth rate among the search (context) ad segment exceeded 60%, while segments share reached 63%. The display (banner) ads segment showed 45% growth with a share of 37%. Such significant growth rates made the internet the second largest in terms of media advertising revenue, with only TV ahead of it. In 2011 each rubble earned from media ads contained 16 kopecks earned on internet ads. We can also see the growing interest of CPG advertisers in internet media. Such interest can easily be explained by the impressive figures for internet penetration at the end of 2011 reaching 47% of the total Russian population above 18, and 62% of the 12-54 year old population group in the cities, with the total Russian audience exceeding 50 million users. We expect further growth of the internet audience, mainly in small cities and among older generations. During 2011 the Russian market experienced a rapid growth in interest from advertisers in video ads. Such interest can be explained by the growing audience for online video and the growing number of new Video-On-Demand services which provide a wide choice of films, serials and TV-catchups. This same trend can be observed during the first months of 2012, and during the year we expect video ads to become a larger and visible part of the Russian internet market landscape. Another notable tendency is the continuing
Do you CEE? 2011
experiments of advertisers in the field of social media applications. The leading Russian social network, Vkontakte, reaching approximately 60% of city populations, aged 12-54, and an even larger percentage of teens, is lucrative enough to attract many leading advertisers budgets. In 2012 we expect the Russian internet market to show positive results and attract even more advertisers money. There are also hopes that continuing development and deployment of modern technologies for display ads placements (Real Time Bidding, Data Management Platforms) on the Russian market will provide advertisers with better tools for complex behavioural targeting and allow publishers to perform better monetization of remaining traffic, thus increasing the absolute value of internet ad revenues and keeping nice growth rate figures.
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Social networks & Mobile internet
Mobile internet
When it comes to the most visible phenomenon on the CEE market in 2011, it should be underlined that the dynamic rise of mobile internet is unquestionably not only a regional, but also a global highlight. The mobile revolution is yet to come, but the first signs of it are already very promising, opening up new marketing opportunities. As The Economist (online edition, 13th April 2012) notes, smartphones have a remarkable adoption rate in the United States, since it took these devices less than 10 years to achieve a market penetration rate of 50%. Smartphones and tablets are now steadily taking over the CEE region as well. CEE customers have clearly started to get more used to browsing the internet through mobile devices, while more and more mobile subscribers exchanged their traditional phones for smart ones. If the pace of change witnessed by mobile internet in 2011 will continue then in a very short period of time the online reality will be based on a totally new paradigm, where digital content is primarily accessed and shared through mobile applications and people always stay connected. The rise of the mobile internet has some important implications for the business world that should be clearly stated here. With customers browsing the internet predominantly from mobile devices, the marketers will have to invest more in mobile advertising and the markets of m-commerce and m-payments will certainly flourish. According to insights from the report Zanox Mobile Performance Barometer (2012), prepared by Zanox (Telecompaper, 23rd April 2012), a performance advertising network, the m-commerce market is already developing dynamically and the leader in Europe in 2011 when it comes to growth of m-commerce turned out to be a country from Central Europe, Poland, with an impressive annual growth of 722%. M-commerce cannot develop without the accompanying emergence of new, safer solutions in the field of m-payments, which aim at facilitating mobile transactions. World Payments Report 2011 issued by the Royal Bank of Scotland states that the value of global m-payments is expected to grow aggressively at a stable annual rate of 52.3% until 2013. As can be seen already that as more and more business opportunities exist in the mobile sector, it seems indispensable to investigate the landscape of mobile internet usage and customers behavioural patterns in the CEE region. In 2011 the share of mobile page views in the CEE region increased on average by 252% (January 2011-December 2011) and, as a consequence, nearly every 25th page view was made by the inhabitants of Central or Eastern European countries from mobile devices. This number does not seem to be particularly high, but when the percentage change of the
Do you CEE? 2011
share of page views from mobile devices for December 2010 and December 2011 is taken into consideration, it is clear how the whole market is dynamically expanding. On each of the CEE markets the percentage of page views made from mobile devices has at least doubled in comparison with December 2010 and on some markets this increase was nearly tenfold. In December 2011 the highest traffic from mobile devices was registered by two of the Baltic states: Latvia and Lithuania. In both these countries more than every 14th page view was made by users from mobile devices. Moreover, Lithuania, Estonia and Slovakia are the countries with the most dynamic growth of mobile internet traffic. The mobile internet is especially booming in Lithuania and Estonia. In Lithuania the share of page views from mobile devices grew nearly ten times in December 2011, and in Estonia almost 6.5 times, in comparison with December 2010. Apple is the undisputed leader in the CEE region when producers of mobile devices are taken into consideration. The highest share of mobile page views in 2011 in Central and Eastern Europe came from the devices manufactured by this Cupertino-based company. Despite the fact that Apple started 2011 in second place behind Nokia, it soon took the lead on the market and the share of page views generated from Apple devices is steadily growing. In December 2011 more than 1/3rd of all the page views on the sites measured by Gemius in CEE generated from mobile devices came from Apple smartphones or tablets. Devices of these types brought to the market by Apple have especially strong positions in Hungary, Turkey, Estonia and Slovenia where the share of page views generated from Apple devices exceeds 45%. On the other hand, Belarus is the only CEE market where customers use more mobile devices from other brands to browse the internet. Both Samsung and Nokia products are more popular there. The second most popular brand in the CEE region, Nokia, has been gradually losing its market position in the period January 2011- December 2011. Over the course of 12 months, this Finnish potentate lost 13pp of its share of mobile page views and concluded 2011 with an average share of page views generated from its devices in the region amounting to 21.2%. Nonetheless, Nokia is still popular, especially in Ukraine (44.1% of mobile page views generated in December 2011) and Belarus (35.9% of mobile page views in December 2011). The position of Nokia is threatened by Samsung, the third brand in the CEE region with respect to the share of mobile page views in 2011. Samsung has noted the fastest increase in
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Mobile internet
the percentage of mobile page views over the course of twelve months (January 2011 - December 2011) and the share of mobile page views generated from mobile devices produced by this company grew by 7.7pp in this time period, which corresponds with 181% of y-o-y growth rate. In December 2011 on average 17.2% of all mobile page views generated in the CEE region were done from Samsung smartphones or tablets. In that month Samsung had the strongest position in Slovenia, Hungary and Poland, where more than 50% of mobile page views were generated from this brands devices. The other two most popular producers of smartphones and tablets in the CEE region were HTC, with an average of 8.1% of mobile page views generated in the region, and Sony Ericsson with 7.8%. HTC improved its market position from January 2011 by 1.1pp and Sony Ericsson noticeably dropped in popularity by 3pp. HTC mobile devices were the most intensively used in Slovakia, where their share in mobile page views on the market amounted to 13.5% (December 2011). Furthermore, smartphones and tablets offered by Sony Ericsson were the most popular in Poland and Slovakia (12.3% share in mobile page views in each of these countries). When it comes to specific models of mobile devices, Apples market dominance seems to be unmatched. The most popular models on the market are the Apples flagship products iPad and iPhone. Their market position was much stronger in December 2011 than the situation of other market followers. iPad is at the moment the unquestionable market leader amongst mobile devices and in December 2011 21.7% of mobile page views generated in the region came from this device only. The launch of iPad2 in March 2011 did not significantly influence the popularity of the Apple tablet, as the share of page views generated from iPad devices was gradually increasing from the beginning till the end of the year. The intensity of usage of the second most popular Apple product, iPhone, was more stable in 2011; however, in December 2011 the share of page views decreased by nearly 2pp, in comparison with January 2011. In the last month of 2011 Apples tablets were the most intensively used for mobile internet browsing in Estonia (36% of mobile page views generated on this market), Slovenia (share of mobile page views for iPad amounted to 32.9%) and Russia (31%). The adoption rate of iPad devices is discernibly the lowest in Belarus, where in December 2011 only 6.5% of mobile page views were generated from Apples tablets. iPhone, on the other hand, is used the most eagerly for mobile internet in Hungary (36.22% of mobile page views generated came from iPhone) and in Turkey (22.6% of page views generated from mobiles were done from Apples smartphones).
Do you CEE? 2011
The third most used mobile device in December 2011 in the CEE region is Samsung GT-i9100 SII, which was designed to compete with iPhone thanks to its comparable specifications and lower price. This mobile phone had 2.7% share in mobile page views in the CEE region and was the most intensively used in Slovenia (7.1% share of mobile page views in this country) and in the Czech Republic (4% share of mobile page views). The other mobile devices that lead on the CEE market have a much lower share of mobile page views than the three market leaders and for none of them it exceeds 2%. Four products brought to the market by Samsung occupy the places in the ranking directly behind Apples two flagship devices. In December 2011 the most popular mobile device produced by HTC in the region was HTC Desire, with a share of mobile page views on the Central and Eastern European market amounting to 1.5%. None of the models of mobile devices produced by Sony Ericsson had sufficient share of mobile page views generated to be included in top 10 ranking. The analysis of the popularity of the operating systems can provide some further relevant insights into the current landscape of the mobile internet market. The share of mobile operating systems in comparison with the operating systems used on PCs and laptops is still very small, and even the strongest market players (Android, iOS) did not have a share of page views exceeding 1% in December 2011. Nevertheless, the growth of the share of page views made from devices running on mobile operating systems is impressive. For both Android and iOS this indicator grew more than four times in the period of 12 months (January 2011 - December 2011). In December 2011 the highest share of page views was registered from mobile devices using the Android operating system and this percentage amounted to nearly 0.8%. Apples iOS was the second most popular mobile operating system, located just slightly behind the market leader with the share of page views generated in the CEE amounting to 0.7%. This fierce battle between Googles Android and Apples iOS gets even more interesting when you take into consideration the fact that many more mobile devices on the market are running on Android systems. Various producers of mobile devices (Samsung, Motorola, HTC, LG, etc.) employed Android as the backbone of their products functionality. On the contrary, iOS is only used in the smartphones and tablets produced by Apple. As a consequence, the relatively high share of mobile page views generated from mobile devices running on iOS further confirms the strong position of Apple in the region.
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Mobile internet
When the share of page views generated is taken into account for mobile operating systems alone (Android, Symbian, iOS, Windows Mobile, Bada OS and RIM OS), it turns out that Android overtakes iOS on the mobile operating systems market by 4%. Smartphones and tablets with an Android system installed are the most popular in Slovakia, Croatia and Belarus among CEE countries, while the devices running on iOS are the most intensively used in Croatia and Russia. Symbian is the third most popular mobile operating system in the CEE region, but its market position is noticeably weakening. When the share of page views generated from a device operating on a particular system (including traditional and not only mobile operating systems) is taken into consideration, this indicator slightly increased for Symbian (+0.06pp) over the course of 12 months (January 2011- December 2011). Nevertheless, when the mobile operating systems market is taken into account alone, the share of mobile page views for products operating on Symbian decreased by 27pp in the same period. This decreasing trend will certainly be sustained in 2012, since Nokia has officially announced that it will stop selling Symbian devices in the United States and Canada. Moreover, Nokia 803, planned for launching in the first half of 2012, was rumoured to be the last phone introduced by the Finnish company using Symbian OS. Nokia plans to concentrate on developing smartphones and tablets using the newest operating system from Microsoft Windows Phone 7. The other mobile operating systems that are currently audited by the gemiusTraffic study (Windows Mobile, Bada OS and RIM OS) have an inconsiderable share of mobile page views generated that does not exceed 1% when only mobile operating systems are analysed. Last but not least, when it comes to the mobile browsers market, the strongest market player in the CEE in 2011 was WebKit Mobile, the aggregate category for all browsers available on iOS system (excluding Opera Mini) and for the default Android browser. Despite the fact that the popularity of WebKit was steadily increasing in the period of January 2011 - December 2011, this mobile browser is still far behind the traditional web browsers (Explorer, Chrome, Firefox, Opera). The existing abyss between the intensity of browsing the internet on PCs and laptops and viewing web pages from mobile devices can be clearly demonstrated by comparing the share of page views generated from the least popular traditional browser from the top 10 Opera, and the most popular mobile browser in this ranking WebKit. The share of page views generated for WebKit in December 2011 amounted to 1.3% and was by 9.7pp lower than the percentage of page views generated from Opera. Opera Mini
Do you CEE? 2011
is the second mobile browser from which in December 2011 the share of page views amounted to nearly 0.7%. The other mobile browsers that made it into the top 10 most popular browsers in the CEE region (Nokia browser, Opera Mobile or NetFront) generated a share of page views lower than 0.15% (December 2011). WebKit Mobile was used for browsing the internet the most intensively in Croatia and Slovakia in December 2011, while Opera Mini records the highest share of page views generated in Belarus and Russia. An investigation into the daily distribution of web traffic from both mobile devices and more standard devices like PCs and laptops is also justified. It can be seen that mobile internet users get up earlier in the morning and go to sleep later. They also seem to be more active online during the night hours (9PM-9AM), while their online presence is less intense during the day time. This trend is likely caused by the fact that at work people have access to the fixed internet and mobile internet is mainly used when such access is absent while commuting, going out, travelling etc. The peak hours when mobile and fixed internet users are the most active online are similar for fixed internet users in the CEE region this time falls around 8PM and for mobile internet users around 9PM.
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Daily activity of internet users mobile vs. fixed
Share of page views generated during the day 8% 7% 6% 5% 4% 3% 2% 1% 0%
Do you CEE? 2011
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 MobDev (%)
Other (%)
Chart 1. Daily activity of mobile and fixed internet users weekly average (gemiusTraffic, 5-11 December 2011). Specification of the methodology used while calculating data for this chart see methodological note.
Levente Lovas Senior Product Marketing Manager Vodafone Hungary

According to global trends, in the nearest future, the Android OS will show a growing tendency to match the simultaneous stagnation on the part of the hitherto leader Apple iOS. The Android area is driven by Samsung, which offers a wide price range of devices using this system. Motorola, at the moment, is still not reaping the benefits of its acquisition by Google. It seems like the CEE market - after the initial fascination with low-end smartphones - is maturing and choosing mid-range devices capable of facilitating growing mobile internet usage.
The whole region is in a transition stage in terms of mobile internet access. Mobile broadband is still at the gate, though small screen internet along with smartphone trends is getting more popular. MBB could be transferred to MiFi solution because more households will have internet capable devices without SIM cards, and IOYM (Internet on Your Mobile) will witness a massive growth along with more affordable offers, meeting the market needs. We are also observing the evolution of customer perception, which has currently reached a point where consumers feel more informed about the real value of the mobile Web and an understanding of its background (data allowances and pricing). In 2011 no major differences in the use of mobile internet were registered. Mobile users are mostly sending e-mails, surfing the Web via browsers and, increasingly, applications, plus they are also beginning to consume content with the original content being essential. This is why those companies, which can provide local services and solutions, can win in CEE region.
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Mobile internet
In the beginning mobile sites were in focus but following the global trend the regional companies rolled-out more flexible and popular mobile applications amongst users. Nevertheless, the CEE is characterized by a strong demand for free content and the region seems not to be ready to monetize mobile content and apply the revenue-focused business models in that area. The whole industry continuously seeks new sales channels and payment methods. The time is becoming ripe for new services like NFC, in-app payment, operator driven payment solutions on legacy storefronts, freemium models etc. These new methods of payment will change the industrial status quo providing an opportunity for monetizing content and application selling. In 2012 the region will experience increasing data volume, which will not only come from mobile web and content consumption. Mobile internet service usage will also increase heavily due to the consolidated appearance of new technologies and services like cloud computing, social networking and mobile commerce. In my opinion it is time for the mobile industry to change the focus from selling individual data plans and turn to the integrated and converged services, which include data allowances, with the great value of customer need for content. IP based communication (RCS-e) services will strengthen their position on the market to fight with the over-the-top (OTT) players in order to establish a clear position on revenue and regulatory. Smartphone solutions will cascade down to the emerging markets and beyond this the major handset manufacturers will face new and customer-driven competitive handset offers, in this way capitalizing uncharted areas of telecommunication.
Do you CEE? 2011
view. The growth dynamics of CEE website traffic generated by mobile devices indicates that around the end of 2012, the number of mobile views will exceed 10% of all page views generated in the region. On the one hand, as much as 90% of traffic will still be generated by desktop and portable computers; on the other, however, the share of mobile traffic amounted to mere 1.5% at the beginning of 2011. It is worth stressing that we are dealing here with a nearly 7-fold growth over just 2 years. As it may be concluded from the quarterly reports of Strategy Analytics, the global sales of smartphones grew by 43% year to year. To a large extent, this impressive result may be contributed to the quickly rising popularity of two mobile operating systems, iOS and Android, which are found on 8 out of every 10 devices sold. The data collected by Gemius are thus supported by the mobile segment sales figures. The technological advancement of smartphones and tablets found on the market allows the users browse the Web as easily as on a computer screen, fuelling the boost in the number of page views per device. Phone manufacturers tend to utilize ever larger screens and , particular types of devices and resolutions. When analysing the traffic they generate on websites in CEE, one can observe a strong correlation between the size of the screen and the number of page views made on that device. Tablet users are almost 3 times more active than persons using smartphones, which can be clearly seen on the example of Apple products. Even though iPad in most CEE countries is far less popular than iPhone, the former generates almost twice as many page views as with the smartphone from Cupertino. The number of page views generated by a particular type of device is not the only difference that can be observed. It also turns out that tablets and smartphones are used to browse different types of content. While smartphones are mainly used to get the latest news and for very active, 24/7-connected style of presence on social networks, e-commerce sites are a favourite destination of tablet surfers. The larger tablet screen seems to encourage active online shopping. Still, what needs to be pointed out is that irrespective of the type, size, or brand, mobile devices become an increasingly important part of our lives. The incessant struggle of mobile OS providers for supremacy on the market and the competition that is far more belligerent than and case of computer software are the most basic factors characterizing this segment. This is further fostered by new, constantly perfected
, Krzysztof Rosinski
R&D Manager Gemius
It is an undisputed fact that over the last several years the statement this year will be the year of mobile has been heard on many occasions. Unchangeably, with each year coming to its end, it turned out that that was not the right time to celebrate. Does 2012 stand a chance to break out of this unfortunate string? In my opinion, this is fairly plausible, and the observations of Gemius seem to support my point of
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Mobile internet
technologies implemented by the mobile phones producers; effective promotion by the increasingly visible advertising campaigns in the media contributed too. Launching a new computer on the market often remains unnoticed, whereas a premiere of a new model of the flag phones by Apple, Samsung, Nokia or HTC stirs up media attention each time and thousands of consumers are ready to queue for hours to get the device of their dreams on the very first day of sale. All this it a proof of the changes that took place within the last few years. One effect of these changes within the recent 6 months is the sky rocketing activity of mobile web surfers. The developments observed on the mobile market are finally becoming visible to the key players too. Facebook may have the largest mobile users base in the world: nearly 500 million people regularly uses the mobile version of the network according to their data. It is on this segment that they are planning to base their future on, which seems to be confirmed by the recent Menlo Park giant acquisitions of companies such as Instagram, Glancee, or by the launch of an online mobile store - App Center. The steps made by the largest social network combined with the activity of many companies in the online industry may mean that 2012 could finally be the time when the mobile content is factually monetized. However, I believe this will not be a time of celebration for the e-business, but rather a beginning of a new road. A road that might change the world of the internet completely and the way we the consumers see this world.
Do you CEE? 2011
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social networks
The online platform category that was on everybodys lips in 2011 was social networks. 2011 was a year of further innovations in this market segment. 2011 was also a year when Google launched its own social network, fully integrated with other products from the Mountain View giant portfolio Google+. Despite the intense internet buzz accompanying the introduction of this new platform, Google+ did not manage to compete with the global leader in the social network sector Facebook. Nevertheless, since its launch, it has managed to become one of the most popular social networking sites globally with 170M users according to the April 2012 statement of Larry Page, the companys CEO, of whom around 100M are active online (Mashable, 11.04.2012). Google+ entered the market offering interesting features in the social networking sector, especially through hangouts allowing the users to enjoy group video chats; sparks, providing a personalized content; and circles, giving users the opportunity to share content with the exact people they want it to be shared with. Despite the fact that Google+ is, beyond a shadow of a doubt, an interesting phenomenon in the social networking sector, this social platform has not yet succeeded in threatening the position of the global market leader Facebook. Mark Zuckerbergs service is still gradually expanding its user base and in April 2012 the number of its active users hit 901M (Mashable, 23.04.2012). With the acquisition of the mobile photo sharing application Instagram, Facebook took a more aggressive step into the world of mobile internet and applications developed for smartphones and tablets. Furthermore, the April 2012 update of the mobile Facebook application with an integrated camera shows that in the future the social network wants to concentrate more on encouraging people to share real time experiences online. 2011 was a year when Facebook profiles underwent a major facelift, as timeline was introduced to the users profiles. Moreover, thanks to alliances with Spotify, Hulu, and Yahoo News, it is now possible to listen to music, watch videos, and read news with friends in real time, on Facebook. There is a new rising star in the social networking sector that started to gain popularity dynamically in 2011 Pinterest. This new online phenomenon, which has been attracting more and more attention from internet users worldwide, but has also begun to appeal to marketers, is based on an idea of a pinboard-style social photo sharing website where users can create thematic collections of images. Despite the fact that this social networking service is still available to new users only by invitation, the February 2012 stats show that it has already gathered a base of 10.4M registered users (Techcrunch, 02.2012) and the number of people registering on this website is steadily growing. Even though the redesign
Do you CEE? 2011
of the site that it went through in March 2011 irked many users and the base of visitors went down, it seems like it is rising again in May 2012 and this site keeps attracting new users and, consequently, marketers as well. The popularity of this social photo sharing platform shows that even if it is difficult to compete at the moment with Facebook, there are still market niches that could be filled in by new market players. After outlining the global landscape of social networking sites, it seems indispensable to investigate how this market sector performs in Central and Eastern Europe. This specific region is extremely interesting when it comes to social media, as there are several market players that manage to compete with Facebook, or at least are able to maintain the interest of a significant number of internet users in various CEE countries. First of all, the analysis of Facebooks reach on the internet on particular markets from the region can help to illustrate whether the popularity of this social networking platform is still growing in the CEE, or whether there are rather some countries where it has started to lose its popularity. It is of paramount importance to note, before presenting the results, that the data shown here is delivered by Socialbakers, a global social media analytics company, which takes its information directly from the Facebook Ads system. Consequently, there are some visible discrepancies between the results based on this methodology and the methodology used in the CEE region by Gemius, and thus, both estimations of Facebook reach on various markets may differ (e.g. in Russia, Poland, Hungary). As can be seen, Facebook expanded its users base in the period December 2010 - December 2011 across all the countries of the region. In six CEE countries the reach of Facebook on the market has grown by at least 50% (y-o-y growth), and this improvement was even nearly twofold in the case of Romania. Besides Romania, the highest increase in popularity of Facebook in 2011 was witnessed in countries where this global social media mogul has at the moment the lowest penetration rate in the region (Belarus, Ukraine, Poland and Russia). Only in Latvia, where the reach of Facebook amounted to merely 20.9% in December 2011, is the growth of user numbers discernibly weaker (6.1pp of increase in reach, 40.8% of y-o-y growth). Hungary, on the other hand, is one of the countries from the CEE region where Facebook reach was one of the highest in this part of Europe (59.9% in December 2011) and where this social networking site is still intensively attracting new users. In the period December 2010 - December 2011, the reach of Mark Zuckerbergs social platform grew there by 21.9pp. In Croatia and Slovenia Facebook is attracting new internet users at the slowest pace. 45
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Chart 1. Facebooks reach in the CEE region (Socialbakers, 12.2010-12.2011)
There are visible disproportions in the region when it comes to Facebook market penetration. There are still some countries in Central and Eastern Europe (Belarus, Ukraine, Russia), where the reach of this social networking site does not exceed 11% of the online population. On the other hand, in ten of the CEE markets (Turkey, Bulgaria, Croatia, Hungary, Romania, Czech Republic, Slovenia, Lithuania, Slovakia, Estonia) Facebook reached above 45% of the local internet audience in December 2011. The highest reach of Facebook was recorded in Turkey - nearly 88% of online population in December 2011. LinkedIn is an example of an international company from the social media industry that started to attract more attention from both users and advertisers in the CEE in 2011. This business-oriented network, focusing predominantly on interaction between professionals, is gradually consolidating its position as one of the most important social networks globally and in February 2012 it announced it had reached a total of 150M registered users. Despite this global success, LinkedIn had not yet enjoyed a high level of popularity across the CEE countries in 2011. Still, in the middle of the year, Socialbakers reported that in the top 35 countries in terms of users for LinkedIn there were: Turkey (nearly 580 thousand users), Russia (more than 440 thousand), Poland (nearly
440 thousand) and Romania with over 430 thousand users. The growing database of visitors also resulted in business development in this part of Europe. During Q1 2012 LinkedIn entered cooperation with Business Ad Network in Poland, thanks to which advertisements on LinkedIn will be offered on the market. However, besides the increase in the number of users, according to the data from Socialbakers, in none of the Central and Eastern European countries in 2011 did the reach of LinkedIn exceed 10%. This professional social network got hold of the largest part of the online population in Romania, where it had a penetration of 7.4% in December 2011. In several Central and Eastern European countries social networking sites with a format similar to LinkedIn were created and gained in popularity. For instance, in Poland, there is GoldenLine and in Croatia, bika.net. The former reached nearly 1.8M Real Users, according to gemiusAudience (Megapanel PBI/Gemius data) in December 2011. In order to compete with such local players, LinkedIn has tried to fit better into the specificity of local markets and also introduced local language versions of the website in the CEE (Czech, Polish, Romanian, Russian and Turkish so far).
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There are several markets where local social networking sites are much more popular than Facebook, and this should be perceived as a regional phenomenon. Russia is a particular case in Central and Eastern Europe, since in this country even two social networking platforms VKontakte and Odnoklassniki take the lead among social networking sites. The first one was in a very stable position on the market in 2011, reaching on average nearly 67% of Russian internet users per month. In the summer months (July and August) the number of Real Users visiting VKontakte visibly decreased. Nevertheless, soon after the summer holidays the user base of this social networking site expanded again. Odnoklassniki, on the other hand, similarly to Facebook, is gradually strengthening its market position. Over the course of 12 months (December 2010-December 2011) this social networking service improved its reach by 9pp, concluding 2011 with a reach level equal to 61.1%. Odnoklassniki, whose name can be translated as classmates, is predominantly helping its users to find friends met during school years. Despite the fact that in December 2011 Facebook was reaching nearly two times fewer Russian internet users than the market leader in the social networking sector, Vkontakte, its market position is also visibly improving. From December 2010 to December 2011 Facebook increased its reach on the Russian internet by 14pp and, as a consequence, turned out to be the most dynamically developing social networking site in Russia. Fortunately, this increase in popularity of Facebook in Russia does not seem to have harmed the position of local market players. Ukraines local domain of Odnoklassniki occupied eighth place among the most popular websites in December 2011, reaching 31.2% of Ukrainian internet users. Moreover, this social network is active in Belarus, where it is one of the ten strongest market players with 32.5% of reach (odnoklassniki.ru site, December 2011). The second social network giant from Russia, VKontakte is also widely accessed by internet users in Ukraine, Belarus, Kazakhstan, Moldova and Uzbekistan. In both Belarus (51.3% of reach, December 2011) and Ukraine (60.5% of reach, December 2011) the position of this website is currently very strong and far ahead of Facebook. Latvian internet is also responsible for an interesting example of a local social networking site with a very strong market position. This social service is Draugiem, launched in 2004. There is a huge gap in popularity between Facebook and Draugiem at the moment; however it is important to notice that Mark Zuckerbergs social networking site is steadily
Do you CEE? 2011
consolidating its market position in Latvia. According to Socialbakers, in the period December 2010 - December 2011, the reach of Facebook in this Baltic state increased by 4.1pp, which corresponds with nearly 41% of y-o-y growth. In Poland, also, there is a local social network that still has a strong market position; however in 2011 it was overtaken by Facebook in the ranking of the most visited sites on the market. This Polish social networking service is NK, launched as a site with a similar profile as Odnoklassniki, and at the moment also trying to target new segments of the market and alternating its product offerings in the direction of a more general social network. Despite the fact that there are some interesting cases of local social networking sites consolidating their market position, while Facebook is steadily attracting additional users, 2011 could be perceived as a rather harsh year for the regional players in the social networking sector. Romania provides a good example of this difficult struggle for local, social networking sites willing to stay on the market. One of the former leaders active on this market - neogen.ro - was constantly losing its users in 2011. As a consequence, Neogen stopped functioning as an independent market entity and merged with a group shopping website - Zumzi.ro. There are also several interesting examples of local social networking sites that in order to compete with Facebook and keep its users, started to differentiate their product offering and began functioning in new market areas. Two social networking sites can be mentioned as examples here the Romanian tpu.ro (Toti Pentru Unu, All for One) and the Lithuanian one.lt. Tpu.ro offers services from such new fields as group shopping and online video streaming, while one.lt, apart from being a social network, tries to be a useful source of information for its users through compiling content from various sources. As can be seen, 2011 was a hectic year in the social media sector. New players appearing on the market, such as globally Pinterest, and locally Dudu (originating from Russia, first multilingual social network, where internet users from all over the world can communicate in languages that are available in the project) and a steady increase in the global role of Facebook in Central and Eastern Europe, already give enough reasons to contend that 2012 will bring further exciting changes to the social networking environment.
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Chart 2. Reach of three social networking sites: vkontakte.ru, odnoklassniki.ru and facebook.com in Russia (gemiusAudience, 12.2010-12.2011)
Jan Rezab CEO Socialbakers
At the same time, global players are facing the challenge of adopting the right approach when entering a new market. The barriers in social marketing are very similar to the ones in traditional marketing: language, seasonal differences, customer behaviour, or different dynamics of the product life cycle. From our experience, localized communication through a Facebook Page or Twitter account has proven to be a strongly successful strategy in overcoming the aforementioned barriers. Furthermore, it needs to be highlighted that most local players were pretty much overtaken by Facebook, or at least are facing its fierce competition. Our numbers at Socialbakers prove that Facebook has grown pretty dramatically in the CEE region and that companies have started to shift their focus to social media. We can also see that Facebook has started giving higher priority to the CEE region by building dedicated regional teams and managers for the respective countries. This trend is ongoing, which only highlights the importance of this region for Facebook. The social network users in the CEE are a lot more active than other users around the world as they enjoy sports, games
As for the trends in Facebooks development on the CEE market, looking at the number of monthly active users (MAU), we can identify some highly penetrated CEE countries with a steady positive growth. The country with the highest number of Mark Zuckerbergs network users is Turkey, with nearly 88% of the online population using this service. This amount supports the trend of brands and businesses moving to Facebook as an effective way of communicating and networking with fans and customers. According to our Analytics PRO, brands are naturally focusing their marketing activities at places with the highest customer concentration. Social media, with Facebook in particular, represents a very interactive platform that facilitates reach, engagement and feedback which is crucial for all successful online marketers.
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and spend significantly more time chatting and discussing stuff with friends. Whats also typical for this region is that its users prefer smaller groups of friends with deeper and more engaging relationships. In the future we expect social networks to increase their importance in online and social marketing. With the help of social media analytics, businesses can unlock the benefits of social networks and take advantage of them. Local marketing and communication can be performed at lower costs than traditional marketing and it has proven to have a higher reach. Thats why we believe that social media has the potential to become an even more integrated part of successful business marketing strategies.
Do you CEE? 2011
Moscow, but it will never replace borscht, vodka, and caviar, or will never create a sense of national belonging in Latvia. Foreign networks, just like colourful foreign toys, will always tempt the inhabitants of small countries - theyll always give it a try, and also do so. It is really interesting to note that Twitter, however, is a predominantly Latvian space. For each of the 64,000 Latvian users, only a few tens of their followers are foreigners. Facebook is similar, each Latvian has a few foreign friends. But to compensate for the shortage, Latvians will often publically converse in English among themselves, which evokes smirks from others. Microblogging has already become a part of almost all social media. After observing Twitters popularity, almost everyone implemented a short message option into their site for draugiem.lv it is Run (talk), for Facebook its the Wall, which lifted microblogging to a primary level. This is slowly happening with photos as well, the popularity of Instagram shows us that in the era of smartphones, its much simpler to express your findings and emotions with a photo, instead of a gallery, and consolidate it to one tell-all photo, which replaces a 140 character-long message. Social media development is happening all the time, and there are constantly new ways to express yourself. An interesting tendency can be observed social media networks are cooperating with one another. For example, Twitter messages can be published in both draugiem.lv as well as on Facebook with the use of an API, the same way the Instagram photo service can be hooked up with draugiem.lv galleries, Twitter, or Facebook. The iPhone application also offers integration with all of the previously mentioned networks photo publishing, checking into places using the Foursquare database, importing friends from Facebook, etc. The future of social media lies in cooperation in the end, the one who thinks of the best cooperation model, will be the winning platform.
Janis Palkavnieks Spokesperson Draugiem
Draugiem was created practically simultaneously with Facebook, with a very similar outlook on many things, which allowed Mark Zuckerbergs site to become a global leader, and Draugiem to become the frontrunner in Latvia. Since the very beginning, it has been emphasized that draugiem.lv is like a virtual home, and the creators are simply the caretakers of the home. We talk, communicate, we are real people, right here in Latvia. The draugiem.lv loyal user statistic is close to 95%, and all of the qualitative statistics are significantly higher than for any other social network, including global leaders. It is important to note that draugiem.lv is still the first choice for young people, who still dont have their own environment. This allows us to confidently look forward to our own future and at the same time global competition encourages us to constantly develop ourselves. Eastern Europe includes Latvia, whether we like it or not, and all of the former USSR countries have their own perception of things, including social media. We can be proud that Odnoklasniki, which is one of the largest Russian social networks, can trace its roots back to Latvia. As we already mentioned, the understanding of the users and their needs, as well as a strong, not overcomplicated, well-functioning product, will always prevail. The same can be said for McDonalds, as burger and fries will always be found in
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belarus
Belarus
4.1M internet users

Belarus, the democratic character of its political system often in doubt, from the point of view of an EU or US citizen is quite an exotic, post-Soviet part of Europe, about which not much is known. However, politics and Soviet heritage aside, the Belarusian online market is in a fast growth lane. While the internet population is growing in number and rapidly ageing, local businesses struggle to win an audience against Russian giants such as Yandex or Mail.ru.
belarus
Do you CEE? 2011
Table 1. Top 10 websites in Belarus by reach level (gemiusAudience, December 2011). The ranking includes both audited and nonaudited websites: for non-audited websites page views and times are not available.
Belarus is a young, fast developing market, mostly unknown to Western marketers. The fast pace of change brings a lot of newcomers into the top 10 ranking every year, as the market is not yet well-established and only a few players have managed to maintain a steady position. Another thing specific for the Belarusian online market Russian is the language spoken by most of the population, the Belarusian local language is actually discouraged by the government. It shouldnt therefore be surprising that the three most popular websites in Belarus are of Russian origin. Two of them even use the Russian top-level domain. The website with the biggest reach among the Belarusian online population is mail.ru. This horizontal portal is also one of the most popular in Russia. Belonging to the most potent company of the Eastern online market, Mail.ru Group, the portal gathers information concerning a wide range of topics: from automotive, through hi-tech, to celebrities. It also has its own maps and video services.
Mail.ru strengthened its share throughout the last year. Its reach grew by 14pp, while the average time per user rose by 1 hour.
Yandex, the main competitor of Mail.ru in Russia, is also struggling here for first place on the market. Nevertheless, since its inclusion in the gemiusAudience study it has not made much progress towards reaching this goal, while Mail.ru has retained its position. Yandex.by includes its own search engine, news service and classified ads catalogue and is dedicated to the Belarusian market, unlike the two other Russian websites. The next place in the ranking of Real Users, according to gemiusAudience results, is taken by vkontakte.ru. This social networking website, with a strong position in Russia and in Ukraine also, reached more than half of the Belarusian web audience in December 2011, which corresponded to slightly more than 2.1M Real Users. In 2011 there were several weeks when Vkontakte was inaccessible on Wednesday for its users since it was blocked by the government. Activists from
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the movement Revolution through Social Networks used this social service for organizing silent protests in the form of flashmobs, which happened in several places in Belarus on Wednesday evenings. The largest group connected with this initiative, active on Vkontakte, was blocked and in time removed from the network. The global search engine leader Google has an exceptionally strong position in Belarus and its three domains, google.com, google.by and google.ru, were among the top 10 most popular websites. The Google site that attracted the most Belarusian internet users in December 2011 was the global version of the search engine, reaching nearly 2M of the Belarusian web users and occupying fourth place among the most visited websites. The Belarusian domain of Google google.by had, in the last month of 2011, a slightly lower reach than the global one (45.3%). Visibly the least popular among all Googles websites was the Russian domain with nearly 30% of reach on the Belarusian internet. The first originally Belarusian site in the ranking, the horizontal portal tut.by, finished 2011 in sixth place. In December 2011 the website reached 42% of the Belarusian web users. Tut.by launched an evening format of its live online broadcasts in November 2011, which allowed the portal to compete with traditional offline TV stations. Tut.by is also trying to expand to other countries in the region and is already present in Kazakhstan, Azerbaijan and Uzbekistan. Youtube.com, the video content site owned by Google, came 7th in the ranking in December 2011. Belarusians do not seem to enjoy watching videos online to the same extent as other CEE internet users. Nevertheless, the achievement of Googles video content site also reflects market-specific issues such as the high prices set in Belarus by the internet providers and slow connection speed. Web users have to wait quite a while for the video to load, which probably negatively influences their enthusiasm towards online video streaming. The other social network of Russian origin, Odnoklassniki, is the second most popular social network in Belarus. The enterprise, fully controlled by Mail.ru Group, has experienced a steady growth on the Belarusian market since its inclusion in the ranking in March 2011. It is also the site which gets the most user time and engagement: the number of page views generated is two times higher than on yandex.by, additionally the users spend a lot more time on average on odnoklassniki.ru.
Do you CEE? 2011
The Russian domain of the open online encyclopedia, Wikipedia, closed the top 10 ranking in December 2011. In the last month of 2011, Wikipedia reached 29.4% Belarusian web users, which corresponded to a user base of nearly 1.2M people.
Market Highlights
Belarus is still a developing market, with a comparatively low internet penetration level and very low spending on online advertising (lowest per internet user in CEE), but the market is growing rapidly. In one year, the audience rose by almost 700 thousand users, according to the gemiusAudience study, crossing the threshold of 4 million Real Users. There is a multitude of reasons for such a fast growth, among them development of the infrastructure as technologies become less costly and more popular, and the comfort of usage is better, more and more people are attracted by the Web and its possibilities. This has not yet affected online adspends, which in 2011 dropped in value, but increased in the share of total advertising money, as other media like TV or outdoor were affected even more severely by the recession. Relatively small funds invested in online advertising strongly influence the variety of services available on the Belarusian internet, as well as the quality of content delivered.
Where is the new traffic going? Social networks are booming. According to the results of gemiusAudience, based on the fused cookie and software panel, the most popular site of this type is vkontakte.ru. This service, one of the Russian Facebook competitors and the leader in the social media category in Russia, reaches over 50% of the online population in Belarus.
Odnoklassniki.ru and Facebook are competing for second place among social networks and they reach around 30% of the internet audience each. Two other sites, Livejournal and vceti.by are more niche with respectively 16% and 7.9% reach. Vceti.by, originally from Vitebsk, is a local player that should be paid special attention to. With little time and resources,
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Do you CEE? 2011
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the site was able to get to a level of over 200M page views monthly, which is certainly an outstanding performance for the Belarusian online market. The reach of social networking sites in Belarus with respect to age and gender is shown on the graph. What is noteworthy is that women are more keen on social activity in all but two age groups: 19-24 and 45-54, the latter being the one least interested in the category. Also, interestingly, social networks attract the oldest users as well, in particular women. As for the audience composition, the largest group is women aged 25-34. As for the more technical side of the internet, Belarus is still a Windows XP dominium with 65.3% of its market share. While this figure is much higher than in neighbouring Poland (48.9%) or well-developed Denmark (20.3%), (in the latter the leader is already Windows 7), the supremacy of Windows XP in Belarus is diminishing with every month. The interesting fact which makes this market exceptional is that 3rd place in the operating systems ranking belongs to a mobile system Android, which with a share of 1% outranks Windows Vista. The situation in the search field was quite stable in the last year, as it has always been since the end of 2009. Yandex, the
search engine originally created in Russia, is prevailing over Google by almost 15pp. The only moment last year when the two search giants got a little closer was August (Yandex 54%, Google 44.9% of visits from search engine). As there is still little money in the market, it will not change in this respect, as Google will probably abstain from investing in service improvement. However, Yandex being the most popular search engine, is not the most popular search website looking from this angle, Google is the winner with 42.2% of visits and Yandex trying to catch up with 40.6%. The uniqueness of this market is apparent in the case of browsers. Belarus, together with Ukraine, are the only two countries in CEE where Opera is the browser of choice for the largest part of the online population. Additionally, the predominance of this Norwegian software seems to be here for good, as it has dominated the market through the whole period of gemiusAudience study in Belarus. Even the slow rise of Chrome does not affect the market leader. Never before has it been so strong around 50% of page views are currently generated using Opera. Among the new internet projects that appeared on the Belarusian market in 2011, Maps With Me should be mentioned. This web mapping service is differentiated from
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Do you CEE? 2011
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similar offerings on the market by providing offline access to maps from every corner of the globe, after the maps are downloaded on a particular device. The maps offered by this platform, accessible from smartphones, tablets and desktop computers, are additionally regularly updated and work very fast. Maps With Me was created in cooperation with an open source mapping initiative OpenStreetMap. Last but not least, some information on the mobile market and devices used to connect with the Web. In 2010 and 2011, mobile operators in Belarus worked hard to popularize smartphones with the Android system. Some of the most popular phone manufacturers use it Huawei and Samsung first of all, together bearing a share of page views of 30%. However, Nokia is the clear winner with 36% of page views in December 2011, but the two most popular single devices are, just like in the other CEE countries, Apple iPad and Apple iPhone (respectively 8.8% and 4.8%).
Do you CEE? 2011
The predominance of the capital city is overwhelming and it seems like the extremely fast market development is mostly affecting the biggest cities. In 2010, 70.6% of users came from Minsk and regional centres. In 2011 this number went even higher. Lack of balance is clearly visible here. However, users residing in smaller localities are more engaged when online, spending on average over 18 h on the internet monthly and generating more page views than those from big cities.
Audience Composition
Although the Belarusian internet used to be dominated by men (51.7% in 2010), last year this situation changed and currently women prevail. They also spend more time online than men (16 h monthly on average on audited sites compared to 14 h spent by men) and generate more page views. In terms of age, the Belarusian market experiences processes very similar to other CEE markets, but much more rapidly. 60.8% of internet users are under 34. Just a year earlier the age split was even more unbalanced. Young users took over 65% of the online audience then, and only 1 in 29 users was over 55. The seniors are entering the internet very fast, however they spend less than 13 h online per month and view fewer pages than the other groups. The most active are those between 25 and 34 who spend 16 h 44 min online monthly on average. The volume of users with higher education is quite typical for developing internet markets, in addition their share rose slightly during the last year. The rapid development of the market did not however bring many newcomers to the group of people with secondary education, which dropped from 17.6% in 2010. Surprisingly, the least educated proved to be most active users with an incomplete education spent almost 18 h on average monthly, while those boasting higher education only 12.5 h.
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Do you CEE? 2011
Alexander Vasilevich CEO Publicis Hepta Belarus /ZenithOptimedia Belarus
Galina Malishevskaya General Director BelKP-Press
The Belarusian market is underestimated. Investment of 1.5 USD per user is a very modest rate it is much lower than in any other country in the region. Accordingly, there are not enough resources for development, which is a common problem for the advertising market. Government censorship of certain resources also affects the market. This creates threats for further development of these projects and opens new niches for independent web resources. Initial forecasts did not predict a triple devaluation of the BYR in 2011. A drop in internet advertising spending wasnt expected by anyone. But, unfortunately, the devaluation caused a huge downturn in the entire advertising market, including internet advertising. Nevertheless, the market overall experienced a bigger fall therefore internet advertising market share has actually increased. Although there are only two Belarusian entities in the top 20 ranking, there are positive examples as well. Tut.by is one of the major local players, whose share of the internet advertisement media market exceeds 50%. Belarusian website onliner.by is the undisputed leader in the sphere of classified content. The Belarusian market will develop in the area of news resources and projects with local content for sure there is a lot of demand for this, but not enough projects. I think that fusion panels launch, which happened at the beginning of the year, will have serious consequences for the market. Now advertisers have an effective instrument for planning and assessment of their investments. This can lead both to a significant redistribution of resources and new possibilities for quality work on increasing the number of users of websites.
The Belarusian market is an evolving one so it doesnt have principal differences or unique characteristics yet. We pass through the same stages and paths that other markets have. Common problems associated with social communication and obstacles to free expression stimulate faster growth of platforms with forums (both for civic and consumer issues). In the sphere of content one can notice a copy-paste syndrome: a limited number of sites can generate a steady flow of quality original content (starting from socio-political and up to specialized content adapted to a local consumer). Its hard to say if you can call the absence of global players a distinctive trait of the market (the cause is probably an unstable situation and low market capacity), but in the end it causes the low technological viability of the market and as a result falling behind and underestimation of the potential. 2011 in Belarus brought a growth in the online audience due to internet availability in general and the spread of social networks, in particular on smartphones and tablets. Furthermore, the market has seen an increase in demand for video content, resulting from a better quality of internet access (a jump in popularity on the part of specialized video content sites). 2012 will surely be a year for all issues associated with social networks and interactive auditory (Web 2.0). All players on the market look into the future with hope, bearing in mind one of the greatest assets of the Belarusian market the impressive workforce.
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bulgaria
Bulgaria
3.6M internet users

The recent economic recession did not by-pass this country, the third largest in SouthEastern Europe, which was reflected in the advertising budgets and the new technologies sector. Nevertheless, Bulgaria, which ranked first in Europe in terms of IT-certified specialists per capita at the end of 90s, and 8th in the world in total ICT specialists (outsourcingmonitor.eu), managed to return to a steady pace of development. A quick glance at the results from the market show that, this country, operating one of the most powerful supercomputers in Eastern Europe, an IBM Blue Gene/P, which entered service in 2008, manages to stay up-to-date with the recent technological developments. According to IAB data, the comparison of 2010 and 2011 results shows that the online advertising market in Bulgaria experienced an insignificant growth with respect to the gross internet adspends, amounting to 4.1%.
bulgaria
Do you CEE? 2011
Table 1 Top 10 websites in Bulgaria by reach level (gemiusAudience, December 2011). The table ranking features audited sites only.
A first glance at the top 10 websites on the Bulgarian market shows just a few visible differences if compared to the situation from the previous year. The leader abv.bg remains the same, visibly increasing its primacy with over 4pp more in reach, over 25 more page views per user and almost 14 minutes more time spent on average per user in December 2011 as compared to December 2010. Abv.bg, a free web mail service, also offers users a search option and some portallike features such as weather forecasts and entertainment, among others. The next place in the ranking is held by dir.bg - the largest and most trusted Bulgarian horizontal portal. As concerns reach indicator, this gap is as big as nearly 20%, while the average number of page views performed by the audience of dir.bg is nearly three times smaller than that of abv.bg. An inherent trait of the Bulgarian top 10 sites classification is the popularity of horizontal and news portals. Apart from dir.bg, four other sites of the same type are present in the ranking and all of them, apart from start.bg, have registered a visible leap in their popularity level. One change in the top 10 that is easy to notice is the disappearance of topobiavi.com from the discussed ranking.
This online classified site, in December 2010 as high as 3rd place in the listing, is no longer present in the top 10 one year later, due to changes in its Google positioning.
Number eight in the top 10 of December 2011 is taken by mobile.bg, a classified ads service specializing in automotive advertisements. Despite its position in the reach ranking, it is an undisputable leader as far as the average number of page views generated is concerned. Should the average time spent per user or total number of page views performed be taken into account, it is evidently the second most popular site following only abv.bg.
The top 10 is concluded with the most popular sports site sportal.bg which, although located in last place, enjoys a high level of engagement (3rd position as far as average number of page views performed and time spent per user, following abv.bg and mobile.bg).
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Market Highlights
One of the most significant events on the Bulgarian market (though it cannot be claimed to be an unexpected one) is the closing of the former star in this online reality, a popular dating site, impulse.bg. Once on the very top, enjoying as many as 620M page views per month (June 2009), it saw the end of a dramatic decline in 2011. Impulse.bg, created in 2006, just a few years ago was the no. 1 choice for those looking for a sweetheart, among teenagers and young people - in June 2009, the youngest age groups (15-24 and 25-34) accounted for over 50% of the sites audience. Once Facebook entered the Bulgarian market the wind began to blow from another direction for impulse.bg. Moreover, the changes introduced in the interface in summer 2010 by the service itself (removal of certain functions) caused a noticeable drop in the number of users and, obviously, in the number of page views generated.
Do you CEE? 2011
same ownership, Neogen Bulgaria. Following the closure of impulse.bg all the traffic from this site was redirected to dalavera.bg, which at about the same time changed its profile to a globally-popular one a group-buying site. Thus one trend has transformed into another the once highly popular dating site was, so to speak, transformed into a group-buying site, a phenomenon significant nowadays. While discussing the 2011 trends on the Bulgarian market, a trend that was on everyones lips, not only in Bulgaria, ought to be elaborated upon and that is the mobile internet. 2011 in this online reality witnessed a decisive shaping of the landscape, understood as the top 3 mobile brands used by local internet users. In Bulgaria, a country with one of the highest mobile penetration rates in the EU, the mobile market is undoubtedly one of the most dynamically developing industries; likewise the events on the Bulgarian mobile brands market in 2011. Two shifts in the ranking of mobile devices producers were witnessed during the year Apple exceeding Nokia in March (the website-averaged percentage share of page views made on the sites participating in gemiusTraffic with the devices of these producers in December 2011 were 38.7% and 20.2% accordingly) and Samsung overtaking HTC in September (December 2011 shares: 15.2% and 10.3% accordingly). Nevertheless, it needs to be noted that Samsung entered the new year with another struggle, this time for 2nd place with Nokia. This struggle is yet more proof of users preferences, who, lured by the possibilities and the convenience of using the mobile Web, choose smart phones over feature phones.
In July 2010 only slightly over 11M page views made on impuls.bg were registered, while just half a year earlier the corresponding number was 47 times bigger. Throughout 2010 and 2011 a steady drop in the sites popularity was witnessed. This trend led the final closure of impulse.bg dating site in January 2012; although the service was given a second life, a matter which will be discussed further on.
As many expected, those who resigned from impulse. bg services, seemed to be destined to move to another local purely dating site, aha.bg. Following the closure of the onetime audience-favourite, a rise in the traffic for this service, which remained on the battlefield, was expected to increase. Surprisingly, it was not so. Possibly, a number of dating website users had accounts on both sites in the first place but it seems that most impulse.bg users moved to Mark Zuckerbergs globally growing network. This supposition may be supported by the fact that the average time spent per user on aha.bg did not change substantially following the abovementioned events. This may be proof of another market being collected by Facebooks supremacy. Going back to the second life of impulse.bg, it should be mentioned that both this dating network, as well as a free advertisement site dalavera.bg, are entities of the
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Social networks in Bulgaria
PV in Millions 700 600 500 400 300 200 100 0
09 gu 10 Oc st 2 to 01 De ber 0 2 ce m 010 be r2 Fe 0 br ua 10 ry 2 Ap 011 ril 2 Ju 011 ne Au 201 1 gu s Oc t 2 to 01 b 1 De er 2 ce m 011 b Fe er 2 br ua 011 ry 20 12 09 20 00 00 10 20 ne r2 r2 20 be be ne ril ry st 20 20 10 9 9
Do you CEE? 2011
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Number of page views (impulse.bg account)
Number of page views (aha.bg account)
Chart 1. Changes in the popularity of impulse.bg and aha.bg social networks according to the number of page views (gemiusTraffic, 1 June 2009 - 29 February 2012)
The distribution of genders amongst Bulgarian internet users seems to be one of the most balanced in the CEE the difference in share is as little as 0.32pp, with a slight predominance of women (50.16%, men 49.84%, December 2011). This situation is a result of a gradual growth in the male users share, which a year before was slightly lower and amounted to 48.96%. At the same time, as the December 2011 gemiusAudience results prove, men seem to be slightly more active on the web, generating more page views and spending more average time per user than women. As for the age of Bulgarians online, a minor increase in the middle-aged and senior groups share has been observed since December 2010. A case in point may be the group of users aged 45-54 who increased their share in the audience from 15.87% to 16.77% during the previous year. At the same time, a decrease in the share of younger age groups 15-24 and 25-34 was witnessed. The results in question dropped by 1.67 and 0.93 percentage points (presently 26.14% and 23.76% respectively). Nevertheless, dominance in the online population still belongs to the younger groups as together they form more than a half of the total group of Bulgarian internet users.
In December 2011, as in the previous year, people with secondary school education prevailed (as much as 57.7% of the audience, an increase of another 3.2pp since the respective period the year before). The share of those with primary or no education is as little as 1.7%; nevertheless, it more than tripled if compared to the results from December 2010 (0.52%). At the same time almost one-third of the internet audience in the country (27%) holds a Masters or a Doctors degree. Unsurprisingly, the biggest share of web users resides in the capital city of Bulgaria, Sofia more than every fourth person (28%). The second biggest share as far as place of living is concerned comes from cities between 20,000 and 99,999 inhabitants and accounts for 18.4% of the Bulgarian internet audience.
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Do you CEE? 2011
bulgaria
Do you CEE? 2011
Irina Tsekova Head of Digital Carat Bulgaria
The Bulgarian online market is a mix of two trends. On the one hand, there is high adoption of modern digital technologies, high online penetration among urban and younger population, and increasing smartphone penetration. On the other hand, the market is just beginning to understand the nature of digital media. This can be a serious problem when searching for efficient solutions that all participants in the communication process clients, agencies, and media benefit from. In many aspects the Bulgarian internet market is similar to that in neighbouring countries. Still, it has to be noted that ad serving and monitoring programs and practices need further optimization.
down the level of services offered which, in turn, puts a brake on increasing internet advertising investment. At the same time, in 2011, a number of local digital agencies entered the Bulgarian market, focused entirely on providing internet services. However, these companies are yet to gain credence and the process of developing the channel as a viable investment destination is still under way. Research results about the internets efficiency as a media channel help set adequate indicators for optimizing internet spending. In the future, if more advertisers have access to this kind of research, investments may increase. As for social media in the Bulgarian web reality, the trend for local players to drop off the market accelerated at an unexpectedly high pace and one result of this was the fact that one local network, impulse.bg, ceased to exist. Nevertheless, there seem to be few channels competing successfully with global giants on the local landscape. Such entities as vbox7.com, a local video sharing web site, and abv.bg, a local e-mail provider, are still extremely popular and attractive among the Bulgarian web population. As far as the prospects for the future are concerned, the Bulgarian online market will certainly develop in the field of local ad serving and monitoring systems. Furthermore, mobile devices as an advertising channel will become part of each digital media mix in the near future. It needs to be remembered that the penetration of users who have access to very high-speed internet and smartphones is increasing every year in Bulgaria. More and more international agencies enter the market and train their employees in accordance with the latest trends and standards in digital marketing. Various in-house developed tools, combined with up-to-date internet investment planning, management, and optimization platforms, are laying the foundations for the provision of high-quality services demanded by 21st century users.
Overall, 2011 was a year of competition for digital budgets. Many local advertisers tried to optimize digital marketing spendings and separate online from offline media budgets. Rich media format campaigns prevailed. At the same time, the market kept searching for new formats to distinguish different campaign messages.
Although more and more advertisers approach agencies requesting various ad serving systems available on the market, investments in this area are still below the developed online market level. 2011 was also a year of maximum optimization of digital ad spending and increased demand for all kinds of free added value. It ought to be noted that digital budgets servicing fees are still low compared to the amount of human effort invested. There is no clear understanding of why they should be different from classic media ones. This results in slowing
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Do you CEE? 2011
Ventsislav Kostov Managing Director Httpool Bulgaria

Over the last two years the internet market in Bulgaria has shown a consistent growth of 10 - 15%, which though falling far short of the expectations and plans made before the outbreak of the world financial crisis, still marks positive growth in contrast with the traditional media. The reasonable prices of internet advertising, as well as large and unusual advertising formats, attracted the interest of traditional TV-oriented advertisers and those who were used to the services of the gradually dying print media. Meanwhile, interactive media has proved to be the only channel offering a unique opportunity to switch from media buying to buying an audience. This has resulted in a significant reduction of advertising waste and the optimizing of advertisers budgets and, what is more, is improving profitability for the publishers. Nevertheless, the share of resources allocated for internet advertising in the total advertising budgets remains low, as opposed to that in the Central European countries, and project funding and investing in the internet industry is still difficult. One unique feature of the Bulgarian internet media market is the strong presence of local publishers who receive more than 80% of advertising investments. They dont have the chance, however, of going regional or international and thus bring extra funds into the industry from sources outside local advertising budgets.
Two main trends are believed to shape the current year. Social media and mobile are the most popular media and are seen as instruments the market presence of which is set to sustain its growth. So far no other sensation is visible on the horizon, so these two will be the channels of choice and will also act as a central driving force for the industry throughout the year 2012. The financial difficulties in the economies in the CEE countries seriously impede the development of both the advertising and media industry, including the internet. Digital media, however, has the unique chance not only to survive, but also to prosper in this complicated environment due to the fact that for the majority of the population it has become the only source of information and communication.
Before we head towards 2012 it has to be said that 2011 was a year which saw widespread introduction of ad serving technologies in Bulgaria, in the form of a combination of central distribution of advertisement, ad hosting, and central campaign reporting. This process of managing and auditing advertising campaigns by third and fourth independent parties further improved the credibility of internet advertising and is yet to yield results.
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Croatia
2.1M internet users

In 2011, Croatia, located at the crossroads of Central Europe, the Balkans and the Mediterranean, became a battlefield between three main market players net.hr, index.hr and tportal.hr, all of whom were constantly competing for market dominance. Important changes also took place on the Croatian browsers market, as the market leader, Mozilla Firefox, and Microsofts Internet Explorer, the second most popular player in Croatia, steadily began to lose users to Googles new star, Google Chrome.
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Do you CEE? 2011
Table 1. Top 10 websites in Croatia (gemiusAudience, December 2011)
The top 10 ranking in Croatia is visibly dominated by horizontal and news portals. In 2011 the unquestionable market leader was net.hr, a horizontal portal owned by a Czech company, Centrum Holdings. Net.hr improved its market performance in comparison with December 2010, broadening its reach on the Croatian internet by 2pp. The second and third places on the list were occupied interchangeably throughout the year by tportal.hr and index.hr. Eventually, Index closed the year in second place, reaching 44.7% of web users in Croatia; Tportal, a Croatian horizontal portal owned by mobile company T-Com, was the third most visited website in Croatia in December 2011. Furthermore, the market advantage of net.hr over its two main competitors (Index and Tportal) is visibly shrinking. Index is clearly improving its position the most dynamically, as it managed to increase its reach by almost 2pp and gained nearly 135 thousand additional Real Users within a year. 24sata.hr, a news portal owned by the Austrian Styria Group, mainly concentrating on tabloid content, advanced one place among Croatias most popular websites in comparison with December 2010, and reached a further 2.8% Croatian web users. 24sata also has a newspaper version, whose most attractive content also appears on the website. Readers
visiting this website spent on average half an hour more in December 2011 than users did on 24sata in December 2010. It is worth adding that besides 24sata, the Styria Group owns two other portals that were among the top 10 most popular websites in Croatia vecernij.hr and njuskalo.hr.
Two websites visibly gained most user attention in 2011. The first one dnevnik.hr is a horizontal portal and part of the Central European Media Enterprise (CME). The second is classified ads portal - njuskalo.hr.
Back in December 2010, Dnevnik was just outside the top 10, occupying 11th position on the market with respect to the number of Real Users. 12 months later this horizontal portal advanced by three positions, improving its reach by 5.5pp. Njuskalo.hr allows Croatians to browse through various sale offers in different categories: vehicles, real estate, instruments, books, etc. Over the course of 12 months (December 2010-December 2011) this classified ads website
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attracted an additional 100 thousand Real Users, who also spent, on average, half an hour more there than they did one year before. In December 2011 only one blogging website was present in the top 10 ranking blog.hr, which belongs to CME in tenth place. The other popular blogging site bloger.hr found itself two places behind the 10 most popular websites. This trend shows that Croatian users became less interested in checking blog posts and writing them in 2011.
Do you CEE? 2011
portals, Trudnoca is clearly a website whose position in this sector changed the most in 2011. In December 2011 its reach decreased by 4pp in comparison with January 2011. Moreover, the number of page views generated on this website gradually decreased over the course of the whole year. On the other hand, the womens website whose total number of page views increased most dynamically in 2011 was zadovoljna.hr with a 24.3% y-o-y growth for this indicator. In 2011 Croatians were also using the internet to refine their cooking skills and add some spice to their daily culinary experiences. Coolinarika.com, the online community concentrating solely on cooking, tries to connect people with a passion for various cuisines and give them the opportunity to share their knowledge and exchange handy tips.
Market Highlights
An increasing number of Croatian web users are spending their time on online platforms playing flash games. Of those websites dedicated completely to this kind of online entertainment the most popular are: igre.hr, igre123.net and igre-igrice.com. Igre123.hr, a flash gaming platform from the portfolio of Popcom Grupa, is the leader with respect to the average monthly time spent on the website. Croatian web users play games on igre123.hr much longer than on any other gaming portal. In December 2011 the amount of average monthly time spent per user on this website amounted to more than two hours, which is more than twice the time Croatians spent on igre.hr and 8 times longer than they were playing games on igre-igrice.hr. gemiusAudience provides further insights into the demographic profile of the web users who visit flash games websites. Contrary to expectations, not only the members of the young internet audience spend their free time on gaming portals - still they constitute the largest partof web players in Croatia. 26% of Croatians visiting igre123.hr belong to the age group 35-44. For igre-igrice.hr the share of web users in this age category is almost equal to the percentage of Croatians aged 15-24 visiting this platform and it amounts to 29%. Some changes are also visible in the number of generated page views on womens portals in Croatia. In December 2011 the website whose visitors generated the highest number of page views in the womens portal sector was zena.hr, with a total number of nearly 2.2M page views. Just behind it came another website targeting predominantly female internet users, namely zadovoljna.hr, with over 2.1M page views. The other two portals trudnoca.net and story.hr reached a significantly lower percentage of the Croatian internet audience in December 2011 and consequently, the total number of page views generated on these both websites turned out to be much lower. Among womens
Over the course of one year only (January 2011 December 2011) this website attracted 120 thousand additional Real Users. Visitors to Coolinarika also gradually began to spend more time per month on this platform and in December 2011 the average monthly time spent per user amounted to 45 min.
Croatia, similarly to other countries in the CEE region in 2011, witnessed the growing importance of mobile internet as well. In 2011 it was estimated that almost every fifth mobile phone in use in Croatia was a smartphone with a fast internet connection. The increased use of smartphones not only contributed to increased rates of internet penetration, but also directly entailed popularization of new content, such as new applications, widgets, mobile OSs, mobile games, locationbased services, etc. In terms of producers, if 2010 was the year of iPhone, then 2011 was the year of Samsung smartphones. Despite the fact that the percentage of page views generated from the Samsung devices in 2011 was still significantly lower than the respective results of Apple devices, the market role of Samsung in Croatia is increasing dynamically. The share of page views generated by Croatian Samsung mobile internet users in December 2011 was 6pp higher in comparison with January 2011 and amounted to 22.2%. Furthermore, 2011 will be also remembered for the impressive rise of the newest of the three leading web browsers - Google Chrome. In Croatia, Mozilla Firefox has been the most popular browser for several years. However, at the current growth rate
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Womens portals in Croatia
PV in Millions 3 2,5 2 1,5 1 0,5 0
Do you CEE? 2011
Chart 1. Number of page views generated on four most popular womens portals in Croatia zena.hr, zadovoljna.hr, trudnoca.hr, story.hr (gemiusAudience, January 2011 - December 2011)
Chrome managed to almost catch up with MSIE at the end of 2011 and has the potential to become the market leader in the near future. Google is also trying to improve its presence in the Balkan region and in 2011 its new regional office in Zagreb was opened. In the advertising sector, Croatia became a stage for new developments in display advertising. Many new video formats, multi-screen formats, formats with interaction, video creatives, new IAB rising stars formats (filmstrip, portrait, slider, etc.) were all tested and subsequently implemented in campaigns in 2011. As a result of the growing interest in online advertising and new solutions appearing on the market, many leading portals and agencies switched to commercial adserving and campaign monitoring solutions. Numerous companies trying to face up to these rapid changes in online advertising strategies, started to introduce new products which measured custom interactions, predominantly with video creatives (estimating the number of total materials watched, initiated materials, and customer behaviour while watching videos/playing games - muting, pausing, re-initiating, etc.). The collective shopping frenzy, so typical for the whole CEE online market in 2011, did not pass Croatia by. 40 group buying websites were active on the local internet. The group buying site with the strongest position on the market is at the moment kolektiva.hr. Moreover, various group shopping
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aggregates were launched in this Balkan country in 2011. The purpose of such websites is to facilitate the search for the best deals available on numerous daily deal sites. Also interesting from a global perspective were some start-ups which appeared on the Croatian market in 2011. Farmeron, also called Google Analytics for farms or Facebook for cattle, managed to raise funds from Dave McClures 500 start-ups soon after its market launch, a seed fund and startup aggregator, that previously invested in such renowned start-ups as Hipster, SlideShare, Gizmo or Geckoboard. Farmeron facilitates the process of farm management, where the owner is able to keep track of the animals, their births, feeding, deaths, etc. By means of creating a personal profile for a specific animal, the farmer has an opportunity to manage his animals better on an individual level and, consequently, tailor an approach to specific cases. Socialbradno is another fascinating initiative which originated in Croatia. This Facebook ad management system creates new opportunities for Facebook advertising. It allows marketers and advertisers to schedule their campaigns better while defining specific time slots when Facebook users might be more exposed to them, or to geotarget the campaign, concentrating on a specific region, city or even district while identifying the target audience.
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Do you CEE? 2011
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Similar to the situation in other countries in the CEE region, men are slightly overrepresented online and constitute 51.5% of the online audience. Croatian male web users are also much more active on the internet, spending on average almost 4 hours more than female users and generating on average 130 more page views in December 2011. The biggest group of Croatian internet users (32%) with respect to age, are those between 15 and 24 years old. However, older Croatians are more engaged in browsing various websites on the internet. People aged between 45 and 54 spent the most time online in 2011 on average
Do you CEE? 2011
almost 14 hours in December; and internet users between 35 and 44 generated the highest number of page views in Croatia. When education of Croatian web users is taken into consideration, people who completed high school significantly prevail and constitute slightly above 50% of the Croatian internet audience. Nearly 31% of Croatian web users are living in villages with fewer than 5,000 inhabitants. 24% of the Croatian internet audience comes from the biggest cities, those exceeding 100 thousand inhabitants.
, Saa koric
Digital Director OMG
adopting new rising star formats issued by the IAB and the majority of publishers, as well as agencies, began to use them as soon as they were introduced. Groupons local clones achieved their peak of popularity in 2011 and resulted in one very positive trend the increase of online credit card usage, which for a long time presented a huge challenge for anyone that tried to do any online shopping and the whole e-commerce industry in Croatia. Although other social networks gained some share, Croatian internet users still predominately favour Facebook which has over 1.5M registered users. Both Twitter and Foursquare gathered relatively small but influential communities, with some 20,000 registered users on Twitter and 7,000 on Foursquare, with this number growing with the increased share of smartphones. Around 16% of mobile users nowadays have a smartphone. With the growth of iPhone and Android phones, along with the rise in tablet use (still relatively slow), it is expected that mobile advertising will soon be achieving much greater budget shares.
The economic situation in Croatia wasnt gentle towards the advertising market in 2011, but nevertheless advertising on digital platforms managed to grow further and started to be irreplaceable in clients strategies and plans in almost all industries. The advertising industry started with IdejaX, which was held for the first time in May 2011, in an attempt to organize a festival which would provide a platform for the exchange of ideas, experience and marketing trends both in Europe and in the specific region. HURA (the national advertising agency association) and IAB Croatia decided to organize the festival together because of the complementability of classic and online advertising, which represent the creative advertising scene of today. It is continuing in 2012, both with the X and MIXX awards (for the best traditional and digital campaigns), and should become the key place for the exchange of the best marketing ideas on the national and regional scene. Due to the constant growth of broadband access, as well as the flat rate internet price decrease, widely accepted and used digital advertising formats are getting bigger in dimensions and more complex. The Croatian market is pretty quick in
2012 will definitely continue to be very challenging for the advertising industry, but it is expected that digital advertising will continue to grow in terms of budgets, numbers of clients, and its significance in overall communication presence.
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Do you CEE? 2011
Jan Jilek CEO AdNet IAB Croatia President
The Croatian market experienced significant growth in the past, with CPM prices perceived as too high. In the time of growth, market and media corporations set high goals. Since deceleration of the estimated growth took place, those corporations tried to compensate by taking from the online competition at a price disadvantage, but not by using official pricelists but by using additional discounts and bonus advertising space. The situation at this very moment is that the market is speculating what the real price of CPM is, and official pricelists have no purpose. We believe that the situation will change in the very near future because business cant have sustainable development if one takes the current trends on the market into account. In Croatia, there is one interesting, accepted phenomenon, and that is the CPR (Cost per reach) payment method of advertising space on websites. You can buy a certain period of advertising (day, week, month) limited by frequency capping (1, 2 or 3 impressions per unique user).
One of the landmarks in 2011 was, for sure, the first MIXX competition that set some standards for advertising campaigns. It also had a positive influence on the quality of the Croatian campaigns in the last year.
Currently, the market is expecting improvements in targeting display online campaigns that should take part of the budget from other media and increase the growth of the display market again. A noticeable advantage for the market is the fact that prices are on a more realistic level which makes us more competitive. Nevertheless, the question remains as to how and if smaller media can survive with those prices.
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Czech Republic
6.3M internet users
2011 was a hectic year for the Czech Republic the launch of new, attractive websites, significant market acquisitions, and the growth of national start-ups, even beyond the borders that all happened in the country located on the Vltava river. Furthermore, in accordance with regional and global trends, the market for online video was developing very fast throughout the year even the public broadcaster, CzechTV (esk televize) joined the competition launching a mobile application for smartphones and tablets, which proved to be extremely popular among the Czech internet population.
czech republic
Table 1. Top 10 websites in the Czech Republic by reach level (NetMonitor - SPIR - Mediaresearch & Gemius, December 2011)
Market Overview
The unquestionable market leader on the internet market in the Czech Republic is unchangeably seznam.cz, a local website combining the functionalities of a web portal and a search engine. Despite its outstanding market performance (83.3% of reach amongst Czech internet users), Seznam tries not to fall into the inertia trap and is continuously working on refreshing its offer and fulfilling consumers needs. In March 2011 Seznam took over the most popular Czech video content portal stream.cz and started to integrate the content from this website on its main page. In November the company launched a beta version of a new function complementing the previous search engine present on the site video search, allowing its users to find desired video content in the Czech language. Also, at the end of 2011, a beta version of the new sauto.cz was introduced an e-commerce portal offering its users the opportunity to buy a car from various dealers. Czech internet users are eager to learn new gossip from the celebrity world. The year 2011 turned out to be extremely successful for most of the websites providing such content, especially for the market leader in this segment, super.cz, which improved its reach by almost 7pp over the course of the
period December 2010 - December 2011. Super.cz underwent a serious redesign in May 2011, adapting a more minimalistic approach to the presentation of content and increasing the space for advertisements. This heavily promoted change in layout attracted new users and helped super.cz to consolidate its position as the top gossip portal in the Czech Republic. Furthermore, a significant reshuffle took place on the price comparison engines market. Heureka.cz, the major market player in this segment, improved its reach by almost 8pp between December 2010 and December 2011 and gained nearly 671 thousand additional Real Users. Heureka replaced the other popular Czech price comparison engine, zbozi.cz, in the top 10 ranking, which in December 2011 dropped by two places to 11th, losing almost 90 thousand Real Users. Google is also trying to find a niche in this market segment and at the end of 2011 launched its own beta version of the comparison shopping engine Google Nkupy (integrated with its main search engine). In May 2011 Heureka.cz was acquired by the fast growing Polish e-commerce giant Allegro Group which is dynamically expanding its scope of operations to other CEE markets and market segments. At the moment Allegro
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manages almost two dozen websites in the region and is planning to grow further. The company has recently bought another Czech platform admarket.cz and begun to conduct joint sales of Allegro advertising space on this website. Aukro.cz, an online auctions website that concluded 2011 in 10th position among the most popular websites in the Czech Republic, is also part of the Allegro Group. Aukro is steadily improving its market position and in December 2011 this e-commerce platform reached 31% of Czech internet users. Recently, the portal has started to offer discount clothing from luxury brands like Diesel, Ed Hardy, Miss Sixty, Guess, Dolce&Gabbana and Tommy Hilfiger in the new outlet website section.
Do you CEE? 2011
As in other CEE countries, the group shopping sector is also booming in the country. The strongest market player Slevomat is acting aggressively and in 2011 this company acquired a 51% share of zapakatel.cz, its most threatening competitor at that moment. Last but not least, some of the innovative ideas that were born in the Czech Republic have the chance to attract global attention. Skolnisesit.cz is a website which allows its users to create school notes in an online environment and share them with other people. It also offers the opportunity to upload photos and videos, which makes the school notes much more interactive. The website was launched in 2009 by a 17-year old entrepreneur, Jakub Ro, and is steadily drawing more media and user attention. After investment from a Swiss company, BlackLex, the English version of the portal, MySchoolNotebooks.com, is scheduled to be introduced on the American and British market in 2012. Another interesting start-up, mojeID, active at the moment on both the Czech and Slovakian markets, enables internet users to forget about all the passwords and login details necessary to enter various portals. Instead, they can integrate all the login functions in one place on the internet mojeid.cz. MojeID is currently integrated with almost 70 Czech and Slovakian websites that need log-in verification, and the number of partners is growing.
In accordance with the trends noticeable on other CEE markets, the social networking sector experienced a major shake-up in 2011, with local players (lide.cz, spoluzaci.cz) gradually losing popularity among Czech internet users to the benefit of Mark Zuckerbergs worldwide networking service.
Lide.cz, which allows people to create a personal profile and meet new friends through online chat or on specialised subforums, is especially steadily decreasing its reach result. However, there are still numerous opportunities for growth discernible in the subsegments of the social networking sector. LinkedIn, the online community gathering professionals from various specializations, is currently struggling to get its own piece of the Czech internet pie. In January 2012 LinkedIn launched a local version of its global portal in the Czech Republic and from this time on the website has been attracting more and more visitors. The increase in global popularity of more specialised social networking sites (e.g. Pinterest) proves that social portals concentrating on specific target groups could constitute a promising internet market niche. In 2011 such specialized entities attracted users attention in the Czech Republic too. Motomail.cz is a sort of Facebook for drivers, allowing them to communicate in real time about the situation on the roads, view maps showing the current traffic situation, and comment on photos and videos uploaded online by other users. Another website bookfan.cz concentrates on building a community of Czech bookworms and gives them the opportunity to write and read reviews about their favourite books, create online bookshelves, discuss various topics with other readers, and discover new interesting titles.
Market Highlights
From the insights gathered by means of gemiusStream, a Gemius tool for analysis of online stream content (the results of which have been publically available on the website NetMonitor.cz since April 2010), it turns out that stream.cz, a website concentrating predominantly on delivering video content to the Czech internet audience, is the strongest local market player. The number of Real Users visiting this video platform in December 2011 amounted to 2.2M. Furthermore, with respect to the number of initiated video plays, Stream is leading on the Czech market. In the last month of 2011 internet users visiting this platform began to watch over two times more video content than on the website of the second market player news portal Novinky. The other key player, nova.cz, an online platform broadcasting various TV content on the internet (sport, events, talk shows, contests, etc.) experienced a significant decrease in the number of initiated video plays in comparison with June 2010. The popularity of the Geewa online game platform and iDnes, a news portal, was quite stable during the whole period covered by Gemius stream measurement. The whole online video content market 78
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Czech video content sites
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Chart 1. Millions of initiated plays on four Czech video content websites stream.cz, idnes.cz, nova.cz and geewa.cz (June 2010 December 2011, source: NetMonitor - SPIR - Mediaresearch & Gemius)
in the Czech Republic is visibly subject to seasonal variations, with the amount of initiated video content clearly shifting upwards in the period from January till April. Interestingly, Czech public television esk televize noticed the dynamically increasing popularity of online video content and started to attract internet users to their video offer through new communication channels. The first special project introduced by Czech TV, the application iVysilani, was specifically targeted at iPad users. In June 2011, only 3 weeks after its launch, the number of downloaded applications exceeded 10,000 and as a result iVysilani became the most popular iPad app in the Czech Republic. In September 2011 Czech TV had 12 applications for smartphones and tablets in its portfolio, downloaded 250,000 times in total, which is a remarkable phenomenon on the Czech mobile market.
Males are slightly overrepresented among the Czech internet audience. They are also more active online than females and spend monthly around 27 hours on the internet on average. The average male internet user also opened 150 more
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webpages than an average female user browsing the World Wide Web in December 2011. The most numerous age category among Czech internet users are people between 25 and 34. However, the number of web users in the age group 35-44 is almost the same in size. The group of Czech internet users that spent the most time on the internet are seniors (55+) who are online for nearly 29 hours per month. People with completed secondary education including extension studies significantly outnumber the other education groups among Czech internet users. However, the most engaged category of Czech web users, with respect to the level of education completed, are people that have finished secondary education but did not take the final examinations an average representative of this part of the Czech internet population spends more than 30 and a half hours online. Similarly to the situation in other countries of the region, the majority of Czech internet users live in big cities exceeding 100 thousand of inhabitants. 36% of Czech web users live in small villages and settlements with no more than 5 thousand inhabitants.
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Do you CEE? 2011
czech republic
Do you CEE? 2011

We can expect two main areas of development of the Czech online market video campaigns and new device penetration. Television is the strongest medium and gains the biggest share of expenditure. The only way forward is the convergence of TV and online. But first, online has to develop its strong video offer, as a potential incremental addition to TV. The increase of alternative electronic devices will help online to get more from the total time spent, and thus can attract new sources of revenues. The current macroeconomic situation of the whole region doesnt help consumers to get more technically equipped and follow the media consumption trends from the more developed countries in Western Europe or some other continents. For online media sites the challenge stems from the fact that the costs of first-rate content or optimization for different digital devices can exceed potential revenues from advertising and paid content.
Petr Nespurek Head of MEC Interaction at Mediaedge:cia Czech Republic
In 2011 a lot of changes were witnessed mainly in social media, where Facebook launched Places in the Czech Republic or, globally, launched Timeline. Furthermore, Google, and its +1 button, and Google+, were also on everyones lips. Google, in general, started to become more focused on display advertisements (on GDN, YouTube and AdMob). Local websites went through design optimization to be more attractive for users and advertisers as well. On the Czech market, the domination of seznam.cz creates many differences in the area of both search and display advertising. All global websites have to do a lot of work to enter the Czech market successfully. Seznam still keeps its position and brand popularity, but it wont last forever because Google is more popular with the youth. Other local players benefit particularly from the local specifics and small size of the Czech market, which brings no significant interest from global digital companies. The same thing can be observed in the case of ad serving, site traffic, and socio-demographic measurement. It needs to be mentioned that there is no strong local social network, as in other CEE markets. Facebook is the strongest and almost the only one as well.
Michal Buzek Analysts Team Leader Seznam.cz
The main landmark of 2011 was the ongoing struggle between Seznam and Google. They both work hard on the content, technical support, and advertising offer.
In 2011 Seznam.cz was not the only company that focused on the development of applications for tablets and for different smartphone platforms (such as multiplatform applications Novinky.cz and Mapy.cz). Newspaper and magazine publishers tried to gain additional revenue from subscription to digital versions of their titles for tablets and readers as well. 2011 was also marked by significant growth in internet shops revenues. According to estimates by the Association for E-commerce this growth amounted to approx. 15%. in 2011 we witnessed remarkable efforts to consolidate the group shopping market, such as negotiation on the establishment of an umbrella association, several acquisitions and the launch of such services by several big players (such as Seznam.cz, Centrum Holdings, Aukro). For Seznam.cz, an important step in further development was the acquisition of the Plan Studio company, which delivers
Together with Facebook, which is starting to be commercially strong on a global level, the big circle is starting to close. Any other player on the market has to find a supplementary role for itself or invest a lot (e.g. by acquiring) to join the game, like Ringier, Axel Springer, Centrum Holdings or Allegro do.
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map data for its services, gaining the 100% ownership in the Stream.cz videoportal. Last year, by stipulation of the law, advertising on public TV has been banned, and, as a result, advertisers have had to look for other ways to promote. Consequently, Seznam.cz achieved a significant increase in revenues from video advertising. Also unexpected were the complications and uncertainties around the tender for the contractor of audited web traffic measurement, NetMonitor, and the really huge campaign promoting Google products, using for the first time offline media types such as TV, outdoor and press. Taking the size of the Czech internet market into consideration, Google advertising activity, and also the very frequent localization of its services, was a surprise for the whole industry. Seznam.cz is a very strong local player on the Czech online market, offering a wide portfolio of services (search, email, content and classified services, e-commerce, video content) that are leaders in most of their categories. Though 2011 featured big campaigns promoting searches other than just Google, it had not impacted on the number of users of Seznam.cz search.
Do you CEE? 2011
Internet Advertising (SPIR) being the contracting authority. Apart from classic internet, it measures the consumption of video content, and in the near future there are plans to extend the research to mobile internet users. NetMonitor data is part of the planning systems of media agencies and the whole project serves to increase investment into internet advertising. Another project of the Association for Internet Advertising is Admonitor, which keeps monitoring investments to internet display advertising. For Seznam.cz, 2012 will be a year of innovation. At the beginning of the year we introduced a new look for Sport.cz, Sauto.cz and Firmy.cz and a brand new clip video portal Mixer.cz; step by step we will also introduce new Email or a new version of Stream.cz, as well as innovative search. As regards video content we will try to uplift it to a higher quality level and make it more professional in order to be able to offer TV advertisers a fully-fledged alternative. Additionally, we will improve existing applications and develop new ones for smartphones and tablets, as use of the internet on such mobile devices will be undoubtedly more popular in the future. We note the main obstacles on the internet, particularly in the field of online video content, since the TV and film industries still do not believe, and do not consider, internet a suitable distribution channel and, in particular, an additional source of their revenue. It reminds us of a situation in the music industry ten years ago. However, we believe the situation is going to change, and with us contributing to it. We belive that internet competitiveness lies in the permanent increase of the number of its users. Furthermore, internet is no longer just a place where one seeks information, more and more people use it for entertainment or shopping. In terms of individual internet applications people are increasingly demanding new content, generating more displays, and spending more and more time online. Nowadays, the web is reaching them via mobile devices, game consoles, or also via new TVs. In the near future a large number of users will be online almost 24/7, and given the excellent measuring and focusing capabilities they will play an increasingly important role in advertisers budgets.
The Czech Republic still belongs to the group of four countries where search is dominated by a predominant local player. More interestingly, it happens to be the only country using the roman alphabet, where such a situation occurs.
Czech internet users are very conservative and loyal to traditional internet brands. For most Czech users, Seznam.cz is still a synonym for the internet. The Seznam.cz home page is visited by over 5M Real Users per month which accounts for 81% of the total internet population. Apart from Seznam.cz, another important player is Centrum, which manages a similar portfolio of services (such as search, email, content and branch services) but unlike Seznam.cz, the company pursues the partnership option with Google in limited services. In the field of news services and reporting it is one of leading companies outpacing for example iDnes.cz and Aukro.cz - in the field of online sales. The most important project measuring internet traffic in the Czech Republic is NetMonitor, with the Association for
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Estonia
0.8M internet users

Estonia, the most northerly located country amongst the Baltic states, can also be perceived as the innovation hub of the Baltic region the place where new ideas about the online reality flourish extremely quickly (Estonia leads the Baltic part of the CEE area with respect to the value of the Global Innovation Index). 2011 in Estonia was a year of major reshuffles in the top 10 websites ranking. Delfi.ee, the major horizontal portal on the market, consolidated its market position as the leader while the reach of rate.ee, a local social networking site, was slowly shrinking.
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Table 1. Top 10 websites in Estonia by reach level (gemiusAudience, December 2011)
Market Overview
Delfi.ee, which focuses predominantly on providing current news, consolidated its market position as the leader in 2011 and reached 58.1% of the Estonian internet population (December 2011). Despite the fact that in December 2010 this website attracted more internet users (the reach of delfi.ee was then higher by 4pp), the online audience in December 2011, although smaller, was more engaged in browsing this news platform. This can be proved by the results of the average number of monthly page views per user and average time spent on the website per month, which soared in comparison with the previous years results. Delfi is trying to take the way it delivers current news to its readers to the next level recently the company introduced live online streams from various national events transferred to the website via mobile internet. This market leader is also present in other Baltic states, and in Ukraine as well as it is available in Russian for the Russian-speaking part of the Estonian market population. Furthermore, the company broadened its scope of activities to new sectors and in 2011 it launched a collective shopping website Delfi Diil, targeting customers who want to get special offers online
on certain products or services. Soon afterwards Delfi Vaata, a daily deals aggregator, was introduced on the Estonian internet market. Delfi.tv, a video streaming portal providing content from various areas of interest (politics, music, sports, technology, etc.) is steadily attracting more and more web viewers. gemiusAudience data shows that the subsections of delfi.ee that attract the biggest attention are Delfi Naistekas, which covers a wide range of topics that may attract Estonian women, and Delfi Publik, which concentrates on tabloid news and gossip. Neti.ee a search engine and online directory in second place in the top 10 ranking has a very strong position in Estonia. This portal provides users with the opportunity to seek interesting online content via its own engine, as well as the Google search engine, or to browse the recent publications of online newspapers. Additionally, neti.ee is integrated with YouTube and Wikipedia. In 2011 the company introduced an innovation to its online directory thanks to QR codes appearing next to company details, information about the firm can be stored directly on mobile devices by means of scanning.
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News portals ohtuleht.ee and hot.ee occupy third and fourth place among the most popular websites in Estonia. The first one, offering tabloid news about celebrities, was visited in December 2012 by 235 thousand Estonians who generated over 22 thousand page views. The latter, providing a variety of news about politics and society, reached 27% of web users who spent on average 3 h and 7 min on the website. The online versions of the newspapers seem to be exceptionally popular among Estonian web users. Epl.ee the website in seventh place in the ranking of Top 10 websites is an internet version of the major Estonian title Eesti Pevaleht (Estonia Times) and it reached nearly 19.5% of Estonian web users in December 2011. The other online version of the newspaper that entered the top 10 ranking in 2011 was Maaleht, located in 10th place with the number of Real Users exceeding 130 thousand. The audience composition with respect to the age category is slightly differently distributed for both news portals the group of users that visit the internet version of Eesti Pevaleht are mostly people aged between 25 and 34, while the seniors (55+) constitute the largest group of Real Users amongst the readers of maaleht.ee. The local social network rate.ee, located in 4th place in the top 10 most popular Estonian websites ranking in December 2010, lost 70 thousand of its Real Users over the course of twelve months (December 2010-December 2011) and, consequently, dropped to 13th place. The decline in the number of Real Users of this social networking service has been rather slow, which is quite a remarkable achievement for local business in these Facebook dominated times. The collective shopping sector, as in other CEE markets, experienced major reshuffles in 2011. The group buying market seemed to gradually consolidate. A lot of Estonian websites which were concentrating on daily deals (e.g. kupong.ee, goodprice.ee, wink.ee, jammy.ee) were forced to close down in 2011 and major players (Cherry, MinuValik, CrazyDeal, Zizu, Chilli, Niiehea) improved their market share significantly. Cherry, especially, one of the youngest collective shopping portals in Estonia, deserves special attention. This portal started its operations just one year ago but its user base is growing remarkably. According to the latest market share estimations (February 2011, best-marketing.ee) Cherry now controls approx. 50% of the Estonian collective shopping market. The company is present in the whole Baltic region and at the end of 2011 it joined in partnership with Slevomat, the current leader on the Czech group buying
Do you CEE? 2011
market. This cooperation helped Cherry to expand its scope of activities to the new CEE markets Slovakia, Bulgaria and Czech Republic.
An important characteristic of the Estonian internet market which should also be emphasised is that the biggest share of online adspends is allocated to three major local publishers - Delfi, Eesti meedia (publisher of postimees.ee) and neti.ee, since all of them reach a significantly broader range of Estonian web users than the other market players.
Last, but not least, there are several interesting market innovations that emerged in Estonia in 2011. Fits.me, a local start-up basing its business model on a very unique idea, is gradually gaining more international exposure due to the novel solutions it offers. Fits.me is a virtual fitting room that allows customers to try on clothes that they are willing to buy from fashion e-tailers. The website features a robotic mannequin that takes customers body measurements and mimics their shape, so that they can see exactly how clothing would fit them. Both iPhone and iPad applications of this online service are already planned for launching. The other fascinating innovation introduced in Estonia is Mobile ID an online platform allowing the digital signing of documents by means of mobile phones.
Market Highlights
In December 2011, according to gemiusAudience data, 15% of the Estonian internet population used Russian as a native language. As a result, Russian versions of Estonian websites are constantly introduced on this market in order to target that substantial part of the audience. The local leader Delfi already has a subsection with all the major news translated into Russian (delfi.ee Vene). Furthermore, auto24.ee a platform allowing its users to sell their cars online and rate.ee (local social network) also have Russian versions. Moreover, native Russian domains, especially mail.ru and odnoklassniki.ru, are highly popular among the Russian-speaking part of Estonian population.
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Chart 1. The popularity of Russian websites in Estonia in 2011 (gemiusAudience, January 2011 - December 2011)
Mail.ru, with a reach level of 20% and almost 167 thousand Real Users, has a visibly stable position in Estonia and in December 2011 was the 6th most popular website on the local internet. Odnoklassniki.ru, a Russian social network, is also enjoying a stable position, attracting approximately 12% of people surfing on the internet in Estonia.
There are slightly more women than men browsing the internet in Estonia. Notwithstanding this, male users are much more involved in their online visits they spend on average 1.5 hour more on the internet in comparison with female users. The majority of the Estonian internet population is also young 55% of web users in Estonia are younger than 35. Nevertheless, seniors (55+) generate the highest number of page views and spend far more time online (almost 24 hours on average in December 2011) than the members of other age categories. The majority of the Estonian online population, with respect to completed education, are web users with a high school or lyceum diploma (nearly 36.5% of Estonian internet users), followed by people with a university degree (26.25%). Estonians with completed vocational education are the most active in their online surfing and in December 2011 the average representative of this category generated 897 page views.
The other online platforms targeting the Russian-speaking part of the Estonian population, limpa.ru (Russian version of rate.ee) and dv.ee (news portal) pride themselves on an unchanging level of popularity as well. Only the number of web users visiting pogoda.ee a weather portal published in Russian is subject to seasonal change. However, this fact can be explained by the varying level of interest in weather forecasts depending on the time of the year. These kinds of websites are much more likely to be visitied in summer, when people have more spare time and are more willing to spend it actively.
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When considering places where Estonians live, it turns out that most internet users come from the capital Tallinn, 32.3%, followed by Tartumaa (Tartu county), 13.9% and Harjumaa (Harju county), 12.6%.
Do you CEE? 2011
Liis Raudsep Media Director Aegis Media
2012 is certainly likely to be about measurement, research and integration, both data and media. Study of the internet has started to gain more importance during the economic crisis and the trend, to know more and earlier about your campaign, is a growing one. Looking at the case of local players competing with global ones, I wouldnt draw a line between them. It seems to be more about international advertisers who either trust and use Estonian brain potential or just implement international strategies. The best solutions are not just adjusted to local specificities, but quite often introduce to the market new ways of using media content to their benefit. For example, the last Nokia N series campaigns used and integrated media in a very resourceful way. The capability of Estonians to create distinguished content and execute it brilliantly is amazing. All in all, it has to be borne in mind that technology is pushing media towards content integration. Its just a matter of time before it becomes less important from where one consumes media than what content one consumes. Soon we will stop talking about online, radio, print, TV, and start approaching media by the essence of it. Its more important why people consume media. Is it for entertainment, to get news, to fit their lifestyle or just to share stuff? This will be the key question for advertisers, media owners and buyers.
The Estonian market has always stood out with its flexibility and adaptability and is characterized by its eagerness to be revolutionary with digital developments in the front line. The online advertising market is a reflection of this. However, due to the market size, not all great ideas will become reality. One example is the area of online video advertising, where our market still has a lot to learn. 2011 was a year of rebirth for media channels, all media types ended the year with positive figures. However its not yet time to raise our glasses and celebrate. The 2011 advertising market turnover was 1.2% below the 2005 level for newspapers -38%. The golden era, when the market went up by 20pp or more in each year, is over. I believe 2011 made us all realise that normal market growth is 5-10% per year and ad spend per capita will not rise quicker than Estonian GDP. It has to be admitted that the main obstacles for the Estonian market are its size, the level of spend per capita, which is one of the lowest in the EU, lack of investment, and caution towards the influence of economy.
The keyword for 2011 was fragmentation media content and usage within media types, marketing and media services, and measurement. Currently, every aspect of market is maturing and offering a growing number of opportunities to advertisers, media owners and media consumers.
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Do you CEE? 2011
Marko Sojonen Head of Advertising Sales Neti.ee
In terms of advertising spending, the online media in Estonia is again showing a solid two-digit growth and improving its market share from quarter to quarter. But theres a long way to go for example by the end of 2011 print media was still able to attract approximately twice as much advertising as online did. This is why I am sure we are going to see an even more aggressive growth for online in the nearest future. Im happy to see that clients, as well as agencies, are increasingly thinking about return on investment. It means that online business is the most important and that subjectivity and personal preference will have less and less impact on the decision making processes. As a consequence, tracking and measuring ad efficiency is also becoming a daily habit amongst many market players.
In 2012, despite the global competition, local players still hold a dominant position on the market, mostly due to the relatively small amount of money in online advertising in comparison with large and medium-size CEE countries.
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Hungary
4.6M internet users

In 2011 this well-developed Central-European online market witnessed a rather harsh year. The share of online adspending in the total advertising budgets was 18.8%. Moreover, online adspending demonstrated a 12% year on year growth, which shows that the market slowed down in comparison with 2010. Taking the online media landscape into consideration there were some important reshuffles on the market, though compared to the year before it is interesting to note that the very same 10 brands are still attracting the largest number of Hungarian internet users.
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Do you CEE? 2011
Table 1. Top 10 websites in Hungary by reach (gemius/Ipsos Fusion Data, December 2011)
Market Overview
The year 2011 saw some important changes in the Hungarian online market. The growing popularity of YouTube is a sign of a visible major trend in the country, which is located in the Carpathian basin. Online video sharing and streaming is gaining significantly in popularity globally and this internet fad has not passed Hungary by. In December 2011 almost 3.5M Hungarians visited YouTube and spent an average of almost 5 and a half hours there throughout the entire month. Web users are also visiting local sites with video content in great numbers, including RTL, Viasat3, Indavideo and Videa. gemiusStream data (providing insight into the behaviour of users who view online multimedia content) showed that there is a discernible seasonality in the usage patterns of video content websites. TV sites, which show programmes that are also broadcast on traditional TV, are visited predominantly during the spring and autumn months when new TV programmes are launched. On the other hand, video content sites with a format similar to YouTube, where videos are mainly shared by regular users, demonstrate only slight fluctuations in the total user time.
In November 2011, as a consequence of this phenomenon, Hungarians were watching videos on the above mentioned dominant Hungarian streaming sites for more than 4.4 million hours, as measured by Gemius (RTL, Viasat3, Indavideo and Videa), which is three times longer than the total time spent by internet users on video content sites in July 2011.
In comparison with other CEE countries, Hungarian internet users seem to be much more interested in blogging. Blog.hu the Hungarian market leader in the blogging sector improved its reach by almost 4% in 2011 and attracted nearly 300 thousand additional Real Users since the December 2010 result. What is interesting is the fact that the owner of blog.hu internet platform Index.hu has nearly 50% fewer internet users visiting its main site, making the blogging service the best performing position in the portfolio and the top Hungarian website in the rankings (in 4th place). The second biggest blogging site on the market Googles blogspot.com also advanced two positions in the top 10 websites ranking and closed 2011 in 7th place.
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As in the most of the CEE region, Facebook has now overtaken the local players to become the most popular social network on the Hungarian Web. The results show that the American giant is getting more and more attention from CEE users and is increasing in size with a real snowball effect. All in all Facebook increased its reach by 13 percentage points, stabilizing a firm second position on the overall market just behind the .hu domain version of Google search engine. The social network also managed to get its users to spend an enormous amount of time interacting with each other, and with brands featured on the service. With the average user spending up to 11 hours a month on the site, Facebook managed to secure the leading role with respect to the average monthly time spent per user. Former leader, iWiW has not given up the fight yet and has struck back with improvements in its product offer. The Hungarian social network introduced new functions (such as surveys), opened its portals to all users willing to register and started to target a younger audience more actively. This strategy helped turn around iWiWs fortunes and brought a stable last quarter of 2011. The social network managed to maintain its position, reaching 39.5% of the Hungarian online population in December 2011. Origo Media Zrt., the owner of iWiW, is one of the most dominant players on the market with 3 sites from its portfolio featured in the top 10 rankings. [origo] site itself is the most popular Hungarian news portal, with a wide range of services apart from basic news (classified ads, jobs portal, online auction, online shop, dating service, etc.). The site refreshed its layout in August which caused a surge in popularity attracting more than 100 thousand additional users in the two months following the facelift. Meanwhile the portal also expanded its range of services by opening an online toy store, called [origo] jtkbolt in November 2011. This e-shop broadened the portfolio of [origo] in the field of e-commerce. Before the launch of the new service, the company was already operating an online wine shop [origo] borbr and a specialist internet shop for photographers [origo] fotkidolgozs. The most popular Hungarian e-mail service, Freemail.hu (also owned by Origo), maintained its position among the top 10 market leaders in 2011, although the site dropped 3 positions in the rankings. Nevertheless, its users are spending more and more time on the site with average monthly time spent having increased by 1 hour in the last year.
However, not all Origo initiatives met with success. The case in point being the investment in the Origo Film Group, dated 2009, as part of the plan to introduce a 3 screen model (online, mobile, TV). The new division would have produced content for the companys TV channels (Life Network and Ozone) as well as video content for the online portfolio, but it did not achieve impressive financial results. While Origo was searching for opportunities offline, Sanoma a leading Hungarian publisher shifted its focus towards online. The company sold one of its business magazines Figyel in May 2011, while its online counterpart fn.hu remained within the company portfolio. In the months following the move the number of users on fn.hu started to decline and it lost almost a quarter of its visitors by September. In a move aimed at salvaging the ailing business/economics news site it was merged with another news site, hir24.hu, becoming its business section. The merge was successful as the Figyel section managed to direct its readers to the new site, increasing hir24.hus reach by more than 5 percentage points by November. In 2011, Hungarian publishers also embraced a recent major internet trend: the rise of the mobile internet. All the key media representatives Index, [origo], Ringier, Sanoma, HVG, Axel Springer, Marquard Media launched mobile applications on the market, facilitating access to their content through mobile devices. Additionally, the interfaces of their websites have been adjusted to the technical requirements of tablets and smartphones. As a result, the most popular Hungarian websites can be now visited through mobile devices operating on Android or iOS. Last, but not least, in October 2011, a new market player MSN Mainap appeared as a result of the collaboration between Microsoft and Ringier (the biggest publisher on the Hungarian market). In December 2011, after just 2 months of operating, MSN Mainap reached 11% of Hungarian web users.
Market Highlights
Looking at the fact that most of the price comparison engines present on the market (argep.hu, arukereso.hu, olcsobbat.hu) experienced a major growth in online audience reach in 2011, one can conclude that Hungarians like to get the best deals online. gemius/Ipsos Audience data shows that males are
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generally more interested in browsing through the product offers presented on such listing sites than females. Men using price comparison platforms mostly belong to the 18-29 year age group. After a period which saw a slow increase in the number of Real Users, rukeres, especially, started to expand its user base dynamically from October 2011 onwards. In December 2011 the website reached more than a quarter of the Hungarian online population and was the 9th most popular Hungarian website a surge highly influenced by the annual Christmas shopping season. rukeres success was also infuenced by the improvement of the usability and interface of the site done in 2011, as well as Facebook integration. The main competitors of rukeres are rGp (19.3% of reach in December 2011) and Olcsbbat (14.8% of reach in December 2011). Both comparison engines have recently been growing with a dynamic similar to rukeres, however their market position is visibly weaker. Furthermore, Olcsbbat and rukeres have recently developed Android and iOS applications in order to approach users that are increasingly browsing the internet through mobile devices.
Do you CEE? 2011
An up and coming trend among Hungarian internet users is the use of group buying sites. These pages - such as Kuponvilg, BnuszBrigd and rbartok - offering large discounts to internet users have sprung up overnight and swept through the country.
Group buying sites greatly benefited from the rise of Facebook, a great platform for interaction with users, where they can share and enjoy the offers. By the end of the year, more than 17% of internet users in Hungary visited some kind of group buying site. With nearly 11 page views per user, and a little over 2 minutes average time spent, it can be concluded that users visit these sites often for short durations, possibly to check on the stock of coupons and refreshing every couple of days. Group buying is especially popular among female users, as they outnumber men by 12 percentage points in total. This category is dominated by users with high school/lyceum education (45% of all users). Another notable characteristic of the visitors of such services is that they are predominantly in the 18-29 age group (over 35.9% of users).
Price comparison engines in Hungary

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Chart 1. Price comparison engines in Hungary (gemius/Ipsos Fusion Data, January 2011 - December 2011)
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hungary
It is not surprising that the two trends noted above can both be associated with online shopping. This field is a domain of the younger generation and will most probably experience growth in the years to come, as Hungarian internet users grow accustomed to this way of shopping (using e-payments, comparison engines, etc.).
Do you CEE? 2011
seems to be the most engaged in the online reality they significantly outperform other age groups with respect to the number of page views generated per user and average monthly time spent per user (almost 68 minutes). People with high school/lyceum education represent the majority of Hungarian web users nearly 41% of the whole internet population nationwide. However, the highest number of page views per user is generated by Hungarians with elementary education they made on average more than 3.2 thousand page views per user in December 2011. Users with a university degree spent the most time online in comparison to other education groups. Budapest is certainly not only the capital of Hungary, but also the internet hub of the country inhabitants of this city already constitute one fifth of the whole Hungarian online population. A significant proportion of internet users live in villages (23%). People from villages spent the most time online in December 2011 (on average 60 min per user).
The Hungarian online audience is evenly distributed with respect to gender. However, when specific indicators are taken into consideration it turns out that men are much more active online than women in December 2011 they made on average 1.7M page views more per user and spent a quarter of an hour more per month online. In Hungary, 54% of the population is online. Internet users are mostly young people aged 18- 29, as they constitute 34% of the whole web audience. Nevertheless, the 40-49 age group

differences. To be honest, Hungary is not among the best developed markets, but rather just a member of the second tier. Hungary does not represent significant a potential for Western companies; they normally only identify 4 areas in Eastern Europe: Poland, Russia, Romania, and the rest The rest is not homogeneous as there are differences in language, market potential, development, legal environment and even local currencies. Hungary for example is a market with a dominant display advertising share with significant focus on time-based sales methods, high CPM unit prices (in the case of CPM based campaigns) resulting in high CPT level compared to TV, a relative concentration on the media owners side and with a unique fetish for click-through, considered as the ultimate solution for every demand. So, what may happen this year? 2012 will be the year of survival and despondency after 2011, when the online display market was expected to see its first downturn in its 15 year history. Rationalizing, optimization and concentration will dominate the landscape. We might see some areas of growth, like mobile marketing (but there is not enough attention from advertisers), performance planning and buying (but there is big resistance from the media owners), analytics and video (mainly driven by the launch of Hungarian YouTube).
Zoltan Barnoth Managing Director MEC
Recession. This word sums-up the current state of the Hungarian economy, including the already-four-year-long downturn in the advertising market. The headlines of recent years: we have seen a big push towards cheaper and effective online disciplines (like search) while the branding part of digital advertising still has to fight for acceptance and reputation. We have experienced the positive impact of cheap broadband access in online penetration; we have witnessed Facebook overtaking iWiW (the Hungarian social network); we have noticed big changes among editors-inchief and other digital opinion leaders; the rapid expansion of deal-of-the-day websites; and the favorable adaptation of the EU cookie regulation. Generally, our digital landscape is quite similar to other CEE markets, but if you dig deeper you might notice some
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For sure we will see some mergers and closures this year, accompanied by several new developments, and we shall see the winner of the digital audience measurement pitch.
Do you CEE? 2011
those target groups who have become internet users during the past 3-4 years have not been addressed properly. The previously clearly content-dominant Hungarian online market is losing its share day-by-day and, as a logical consequence, its advertising revenues are not growing further either. However, in the last three years the number of daily users increased with nearly 1.3 million readers rising to 3.6 million - the leading content providers have only 15-18% daily share. By contrast, the proportion of international service sites has increased dramatically. In addition to the development of Facebook, earlier providers (like Google, YouTube, Skype) have also shown continuous improvement in user numbers. On the other hand, the user generated content, especially the blog scene, has also differentiated. There are several blogs which look like professional media, with editorial staff, background, and stability, but not so huge audiences. In addition,the development of amateur, mostly hobby-related sites or personal blogs has stopped, with their significance returning to the early days as homemade diaries. From a business perspective, the importance of this type of content has almost disappeared; they have no longer real advertising revenue, so the blog-service providers need to make radical changes to their model.
Our market is also facing the challenge of the global digital players, but there are some local enterprises that seem to successfully manage their businesses, like Etarget (even regionally), Vatera or Carnation.
Supposedly, the strong need for local content presented in the local language will remain and provide an opportunity for local matadors, but this area is already dominated by significant European players like Sanoma, Ringier or Deutsche Telekom. Nonetheless, even these moguls experience problems of economy of scale which are a general barrier to any development and innovation in the Hungarian market. I guess, for more positive news, we would need to see much more dialogue and cooperation among the market players, but Hungarians are just not good at this nowadays. We are brilliant at theory but weak in implementation. Will we ever be able to change this?
Andrs Mth Head of Research at Ringier Head of Research Working Group in IAB Hungary
As well as these processes, 2011 was the year when the mobile-web appeared as a real alternative for news and social media consumption. The cost of data-flow across mobiles fell back to a realistic level, and offers of cellular phones increasingly became offers of smartphones.
2011 was the first year in the online media industry when the crisis showed its face in Hungary. In previous years, most of the industry players had believed that the collapse of the advertising market would not concern the internet and would only occur on television, radio and in the print media. More and more content makers (journalists, editors, video- professionals, etc.) have been delegated to online media, and increasing, though not sufficient, advertising revenue has arrived here. By 2011 this positive trend has been reversed for some, and for others some stagnancy is visible at the very least. The content-oriented Hungarian online media is only able to grow alongside its audience. It could keep its current audience, but
We are not able to define the real, and future, effect of these changes yet, and we do not have any useful business scenarios in mobile-monetizing. Thus this will pose a huge question for all media-owners to deal with in 2012. It is clear for everyone that only the advertising industry can provide enough sources for the development of online media, since in Hungary the pay-for-content approach is still not accepted by users (excluding of course special areas such as sexual content and sensitive business issues). Advertisers found more fashionable surfaces in many campaigns - in social media and search marketing solutions. As a result, the financing of traditional content-based online media has been compromised or has significantly deteriorated.
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Latvia
1.2M internet users

Latvia, despite its small size, is a place with a dynamic internet market that can surprise with various innovations and changes. 2011 for this Baltic country was a time of big purchases on the online market tvnet.lv was bought by the Norwegian media company, Schibsted Media Group, and apollo.lv, was acquired by Finnish company Sanoma News. Moreover, the local social networking site draugiem.lv managed to stabilize its market position and was not threatened by the global giant Facebook.
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Do you CEE? 2011
Table 1. Top 10 websites in Latvia by reach level (gemiusAudience, December 2011)
Market Overview
A short glance at the online market leaders in Latvia in 2011 is enough to confirm that the most popular websites over the course of the last year managed to strengthen their position. The webpage with the highest number of Real Users in 12.2011, inbox.lv, not only improved its reach by 2pp, but also expanded its e-mail services to a neighbouring country Lithuania. The second player a local social networking site draugiem.lv managed to keep second place in the top 10 ranking in comparison with December 2010. This site, however, started to slowly lose its visitors in June 2011.
Still, with an unquestionably strong position for a local social networking website, Draugiem is a phenomenon in itself across Europe in these times of worldwide Facebook domination.
Draugiem.lv tries to constantly expand its scope of activities and profit from new opportunities and trends appearing on the online market. In September 2010 the company launched the collective shopping platform perkamkopa.lv, which since then has grown dynamically. In response to customers increasing interest in video streaming portals (especially Youtube) and VOD services Draugiem also introduced draugiem.tv an online platform allowing its users to watch TV and listen to the radio without any charge. Furthermore, users are able to pay for selected movies and premium TV channels by micropayments. The company also translated the social aspect of its main product (draugiem.lv) into the functionalities of this VOD service and created a new feature collective watching allowing people from different locations across Latvia to watch the same programme together and share comments and emotions online in real time. Draugiem.tv is also a platform for amateur moviemakers, who can upload their films on the website and share this content with their friends via the related social networking portal owned by the same company. Additionally, the service is available on mobile devices and is also going to be present on regular TV sets via smart TV applications.
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It has been quite a year for tvnet.lv, one of the most popular portals in Latvia, bought in March 2011 by Norwegian media company Schibsted Media Group. This website, located in 5th place among the most popular Latvian websites, managed to improve its reach by a further 5pp in comparison with December 2010. Such expansion of the online audience is certainly a consequence of the recent acquisition of Russian news portal Novonews, which targets the Russian-speaking internet audience living in this Baltic country. According to the national census conducted in 2011, the Russian-speaking population constitutes almost 27% of Latvian society, which means that the importance of this group should not be underestimated. The Russian-speaking part of the Latvian population is much more interested in content that is written in their native language and websites that can offer them such information will always stay their favourites. The popularity of the biggest Russian horizontal portal mail.ru among Latvian internet users confirms these suppositions. The website entered the top 10 ranking in 2011 and took seventh place in December 2011. Various media agencies present on the Latvian market have noticed this portals slumbering potential and started to buy advertising space there in order to target the Russia-speaking segment of society. Latvians are also increasingly interested in online fun content, which can make them laugh and can also be shared with friends via various communication channels. The website that perfectly fulfils such user needs is spoki.lv an entertainment platform that provides a broad range of amusing content, from hilarious videos through to games and pictures. In 2010, spoki.lv was just behind the market leaders. Last year, the website managed to improve its market position and in December 2011 found itself in ninth place among the most popular Latvian websites. Spoki is especially popular with young people the youth (15-24 years) constitutes 43% of its audience. Members of the youngest age category are also extremely engaged in this portal and spend on average almost 4 hours per month there.
Do you CEE? 2011
Market Highlights
Online school management systems have been present in Western countries for quite some years already, but they arrived in the CEE region just recently and for the first time in Latvia.
The e-klase project was launched in 2005 by DEAC technologies, but it took some time for this idea to mature and to become a part of everyday life of teachers, parents and pupils. Recently this online platform offering schools management service has been experiencing a boom in popularity as the functions have improved and more and more schools are starting to use the e-system instead of traditional ways of communication. The e-klase project facilitates parent-teacher and pupil-teacher contact. By means of the e-klase.lv website parents have the opportunity to monitor their childs school achievements, check their grades, attendance, homework, and planned tests. The pupils can communicate with a teacher, get comments about their own school performance, and see assigned home tasks. The analysis of the online audience of e-klase.lv, based on the gemiusAudience data, reveals that more women (60% of users) than men (40% of users) visit the website. This could be because the main users of this school management system are mothers, who try to monitor the performance of their children. Thanks to e-klase, they do not have to go to parent-teacher meetings organized on a regular basis. Instead, they can just stay at home and be up-to-date with what happens in their childs education. A particular seasonality exists here which is typical for the education system, and also applies to the changes in the number of e-klase.lv Real Users during the summer months the number of visitors drastically decreases. This seems reasonable, as most people travelling and relaxing during their holidays tend to forget about their everyday school obligations. gemiusTraffic data helps us to gain some more insight into the usage patterns of the portal. E-klase.lv attracts the highest amount of visitors during the evening hours (7-8 PM) when all the user categories go online: parents want to see the grades and the comments about their kids, children access home tasks and speak with the teachers if something needs
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Popularity of e-klase.lv
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further clarification, and teachers try to upload some of the most recent marks and opinions. On the other hand, most page views are generated around 3 PM when the heaviest user category on the website is teachers, since parents are at work and children at school. Apart from facilitating the communication process, e-klase.lv also tries to be a vertical portal offering various content (blog entries, news, contests), concentrating on a broad range of topics connected with education. The main competitor of e-klase.lv is currently mykoob.lv, however this website did notmanage to attract as many registered users as e-klase.lv did.
belonging to the other age categories. Web users younger than 24 also spent the most time online in December 2011 the average representative of this age group was online for 32 hours and 20 minutes. What is also astonishing is the fact that the second population segment that is signified by the longest time spent online are internet users aged between 45 and 54 they spent on average almost 28 hours online. As far as education level is concerned, the two largest groups of internet users are Latvians who completed vocational education and those who graduated from university. However, when average time spent online is taken into consideration, the group of users that is most involved in browsing the World Wide Web are people with a high school/ lyceum diploma - they spent online slightly above 32 and a half hours in December 2011. The majority of Latvian web users are from Riga or the Riga region (nearly half of the internet population), while almost 20% of the Latvian internet audience lives in small cities or villages.
There are more women than men on the Latvian internet. Female users also generated more than 230M page views and spent on average 2 hours more online than male users in December 2011. Young people (below 34 years) constitute more than half of the Latvian online population. The younger the internet user, the higher the amount of websites this person visits. The average Latvian web user, aged less than 24, viewed more than 2 thousand web pages in December 2011, which exceeds by far the average number of page views generated by people
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As far as prospects for 2012 are concerned, I can definitely pinpoint the development of the mobile sector. Furthermore, after a long break the internet portals will become major market players, as social sites are losing their surprise factor. We will also certainly face a continuation of important budget redistribution, from the traditional media to the internet.
Ivars Bauls CEO TVnet.lv

In my opinion, the most important event of 2011 on the Latvian market was the acquisition of TVNET by Schibsted in March of 2011. In November of the same year, TVNET acquired Novonews.lv which was a well-known news site for the Russian-speaking community in Latvia. Another crucial event was the sale of the third most popular internet portal, apollo.lv, to the Finnish media concern Sanoma News. The entering of the Latvian market by the latter player from Finland was the most unexpected turn of events during last year. Up till then, the group was not recognized as a powerful market player. This step may have been the result of a wish to promote the groups advertising business in Latvia. Another unforeseen event was the decision to shut down the entertainment portal, mango.lv. It had established a strong position on the Latvian market as a celebrity and community dedicated online news platform.
The Latvian market itself is driven by local products. Google Mail is not so popular and the absolute market leader is a local free email service, inbox.lv. Draugiem.lv continues to be the leader in the social media field, effectively competing with the global giant, Facebook.
At the same time, these two sites are the leaders of the top 10 most popular Latvian websites. The mobile market still remains a niche one as the number of users is significantly lower than in other Baltic countries. Measurement standard is crucially important for the whole Latvian market and each player individually. It determines the direction of development and establishes the amount of advertising budget allocated for the online channel.
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Andris Blaka Board Member Ogilvy Dijigital
access to your favourite TV programmes at any time and any place through any internet connected device. Lattelecom and Draugiem hope to profit from the steadily growing optical network and 3G mobile network coverage (Latvia is among the top 5 countries in the world by average internet connection speed). 2012 will show if these efforts are to be rewarded with consumers. Cheap, widely available mobile broadband and the skyrocketing number of smartphones on the market makes it safe to predict that 2012 will be the year of mobiles in Latvia. The largest content providers are hurrying to make their sites mobile friendly, producing both mobile apps and mobile websites. Several brands have opted to produce mobile-only content (apps, games, websites, ads), and QR codes have become widely used for marketing purposes, but the results so far are not too satisfactory most of the audience are still getting to know their new smartphones and app users are mostly early adaptors. This is expected to change in 2012, as smartphone penetration doubles and interesting content becomes a lure for consumers to expand the use of their devices.
In 2011, digital continued to grow in Latvia in both importance and ad spends. Several new digital marketing agencies entered the Latvian market and this trend is likely to continue in 2012. However, most, if not all, are being established by larger creative, media or PR agencies, which do feel the need to show off their digital capabilities to attract and retain clients. At the same time, production budgets remain low, so the overall quality of locally made digital marketing solutions is still average at best, with a heavy focus on simple social media apps that attract large numbers of fans and followers by offering prize draws.
From the online media perspective, 2 of the 3 largest Latvian news portals were bought by large Scandinavian media conglomerates (TVnet by Shibsted and Apollo by Sanoma News). These acquisitions are yet to make an impact on the advertising market.
While global digital giants continue to expand, the Latvian market remains the only one in Europe where leading players in both social media (Draugiem) and e-mail (Inbox) are local and going strong. This creates both unique advantages to exploit and pitfalls to avoid for anyone involved in the local marketing industry. Next door customer support allows agencies to come up with unique solutions that would never be possible on global platforms, but it is much harder and more expensive to adapt international campaigns. Last year established proof that the long awaited convergence of digital and TV is at the doorstep. The largest Latvian internet service provider, Lattelecom, and leading social network, Draugiem, have both established their digital TV platforms, currently providing paid access to high quality live stream and archives of more than 20 local and international TV channels from computers and mobile devices. This means instant
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Lithuania
2M internet users
Lithuania, one of the smallest CEE markets with respect to the size of the internet population, is also the country with the second highest internet penetration in the region. In 2011 this Baltic state witnessed fierce competition between the major market players with changes in the top 5 of the most popular websites happening almost on a monthly basis. Video content is also getting more and more attention from Lithuanian web users, to name another 2011 phenomena. As a consequence, several popular TV stations TV3, LNK, Lietuvos ryto televizija launched video content websites.
lithuania
Do you CEE? 2011
Table 1. Top 10 websites in Lithuania by reach level (gemiusAudience, December 2011)
Market Overview
Lithuanian websites are eagerly competing to become the most popular on the market. Thus, changes in the top 5 of the most popular online portals can be registered every month. The indisputable leader on the Lithuanian internet is delfi.lt, a horizontal portal also present in other Baltic states. Delfi.lt has slightly decreased its reach on the internet in comparison with December 2010, nevertheless it managed to stay in the leading position in top 10 ranking with nearly 230 thousand Real Users more than the second horizontal portal in Lithuania balsas.lt. In 2011 Delfi.lt upgraded its layout so that new articles published on the website would be more eye-catching. Previously, the main news items were only highlighted by means of headlines. Balsas.lt, the second most popular horizontal portal in Lithuania, advanced by one position in December 2011 in comparison with December 2010, improving its reach on the local internet by 4pp. Despite the high position of balsas.lt in the ranking, the time that users spent on average on this portal per month is the lowest among all 10 Lithuanian major players and amounts to half an hour. Third place among the most popular Lithuanian websites is occupied by a horizontal portal, 15min.lt. 15min.lt has
improved significantly its position since 2010, when in December it was in sixth place on the list, reaching slightly more than 700 thousand internet users. However, the time spent on this website was almost the same in both 2011 and 2010 but the total monthly number of page views generated increased by 11M. The fourth portal, lrytas.lt, stays very close behind its two other main competitors 15min.lt and balsas.lt. In 2011 Lrytas.lt tried to attract the attention of Lithuanians by means of a more personalised approach to the website structure. In autumn, the portal introduced a new function, by which it became possible to adjust the layout of the website and reorganize the content, so that it suits the personal preferences of the visitor. Lrytas.lt fell by two positions in the top 10 ranking in comparison with December 2010. Nonetheless, the reach of this website decreased only slightly by 2pp. The local social network, one.lt, is still doing very well on the market, taking into consideration the strong international performance of Facebook, which is attracting more and more web users in Lithuania as well. After an initial decrease in the number of Real Users in the period January- June 2011, in the later months the number of Lithuanians visiting one.lt started to increase. One.lt has tried to expand its product portfolio by not only encouraging Lithuanians to manage
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their acquaintances through this portal, but also to give them the opportunity to find some interesting content. Therefore, the homepage of one.lt was redesigned to look more like an aggregator of information from various sources and a platform where users can even earn money. Before logging in to their account, the users have the opportunity to browse through the most interesting news from various categories recent news, tips, and articles targeted to female internet users, entertainment and useful information about shop discounts, new products on the market, etc.
Do you CEE? 2011
One.lt aggregates information from fast loan comparison engines, group buying websites, classified ads portals, and offers an e-shop catalogue with over 1000 e-stores. On the website internet users can also find entertainment content such as jokes and games. In the near future one.lt is planning to give its users the opportunity to earn money by awarding them points for their activity on the website and placing advertisements in user generated content with their permission.
As can be seen, supermama.lt had a rather stable year in 2011 and the biggest increase in the popularity of the website was observed in the period from December 2010 to January 2011 when the portal gained 220 thousand additional Real Users. The second most popular website from this category mama.lt has recently experienced a boom in visits and in December 2011 reached almost every sixth Lithuanian web user. The other three portals operating as an information source for parents (tindirindi.lt, tevu-darzelis.lt and tavovaikas.lt - an online version of a printed magazine) have a much lower reach result. Nevertheless, when the average monthly time spent per internet user is taken into consideration, only tevu-derzelis.lt can be compared to the market leader supermama.lt. Internet users spent on average 1 hour and 4 minutes in December 2011 on both of these platforms. Last but not least, one more website targeted to parents, pasmama.lt emerged on the Lithuanian internet and already upon its launch occupied third place on the market, with over 208 thousand Real Users.
The situation for the lower five of the top 10 ranking is rather stable in comparison with December 2010. There is one player that dynamically entered the list of most popular websites in January 2011. Supermama.lt the biggest gainer in the past year is a forum dedicated to parents. By means of this website parents can get many useful tips on how to bring their children up. The threads on the platform are divided into several age categories focusing on the specific periods in a childs upbringing, which makes it easier to navigate through the various bits of information. In December 2010 Supermama was in 17th place among the most popular websites in Lithuania, which means that it moved 10 places upwards in the top 10 list in only 12 months.
To mention another market highlight, it needs to be noted that following the global trends on the internet, the video content market in Lithuania is currently booming. Several national TV stations with a strong position on the traditional media market have noticed this opening opportunity for reaching new customers and launched new websites offering programmes and videos that have also been shown on the traditional TV.
Market Highlights
The current position of supermama.lt the portal helping parents to bring up their children invites a closer examination of the subject of parental forums and message boards in order to check whether the whole market segment is subject to a similar trend, or is the case of supermama.lt unique on the Lithuanian market?
Three projects especially should be mentioned here. TV3 has introduced a video content website tv3play. This happened in the summer of 2011. Furthermore, LNK brought to the market lnk.lt in November 2011, and Lietuvos ryto televizija started the project tv.lrytas.lt. All of these TV platforms function at the moment as a free archive of all the programmes that were previously broadcast on traditional TV. Additionally, tv.lrytas.lt offers live streams. In August 2011 the measurement of the mobile versions of the websites was carried out by Gemius in Lithuania. From the statistics gathered by this study it turns out that there are four strong market leaders when it comes to the number of page views generated via mobile devices. The mobile version of the social networking platform one.lt (m.one.lt) enjoys the highest number of mobile page views generated and in December
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Websites for parents in Lithuania
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Do you CEE? 2011
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Chart 1. Websites for parents with integrated forum on Lithuanian market (gemiusAudience, January 2011 - December 2011; dashed line on the graph in the October 2011 results for tindirindi.lt signifies a temporary lack of data, resulting from the website not measuring its results over the course of the whole month; pasmama.lt was included in gemiusAudience study in December 2011, thus it was not presented on the chart)
2011 this amounted to over 9.7M, which is nearly twice the number of mobile page views generated on the website occupying second place in the list m.lrytas.lt. m.15min.lt and the mobile version of delfi.lt are also very popular with mobile internet users and since November 2011 the number of mobile page views generated on both platforms is steadily increasing. Furthermore, some interesting startups that appeared in Lithuania in 2011 seem to have a big potential for future growth. In 2011, evertink.lt emerged on the local internet. This website aims to be the biggest e-store directory where customers can find a specific e-shop via the product category they are searching for. Subsequently, customers have the opportunity to read the comments and ratings related to the store service. Customers that bought something on a given e-commerce platform are also encouraged to report their good and bad experiences on evertink.lt. Because of such portals the e-commerce sector in Lithuania will certainly become more trustworthy and, as a consequence, Lithuanians will be more willing to shop online. The other initiative is BusyFlow a cloud-based integration tool allowing the user to manage all their online activity. There are various apps that can be added to this management system
and one can find among them those that are frequently used in the business world, i.e. Dropbox, Google Docs, Pivotal Tracker, Google Task or Remember the Milk. BusyFlow aggregates the flow from all the various productivity apps, facilitating the online processes of the project management. The startup attracted significant attention from international investors when this initiative took second place in the startup competition at the London Web Summit.
There are slightly more women than men present on the Lithuanian web. Nevertheless, male users spent on average one hour longer on the World Wide Web than female users in December 2011. They also generate on average nearly 70 page views more. Furthermore, the members of three youngest age categories (15-24, 25-34 and 35-44 ) constitute the biggest group (64%) among Lithuanian internet users. People aged between 35 and 44 spent the most time online on average nearly 13 hours and three quarters per month (December 2011).
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lithuania
In addition, users with secondary and higher education are the most numerous on the internet in Lithuania. Internet users with secondary education also generate on average the highest monthly number of page views.
Do you CEE? 2011
Most web users in Lithuania live in the biggest cities Vilnius (25.2%) and Kaunas (15.1%). Lithuanians living in Kaunas browse the internet the most eagerly, generating the highest number of page views and spending almost 13 hours online (December 2011).
Ramun Malinauskien CEO Omnicom Media Group

Digitalization is a priority for the market: both media and clients are focused on the financial and technological possibilities as well as consumer engagement. 2011 was the year for media owners to build up new channels with the aim of achieving a higher share of audience in the nearest future (MTG launched TV8, LNK has been relaunching InfoTV and LluksTV). The Lithuanian advertising business has been at a very challenging stage since the beginning of 2011. Preparation for the European Basketball Championship meant increased media budgets, more creativity expected by the clients from ad agencies, more effective messages to consumers in the fascinating sport content from the clients side. TV3 was leading the top programmes list with its basketball broadcasting during the whole of 2011 (share of audience was over 58% for some broadcasts).
The main challenge for the advertising market was to take a stand against the ban imposed on strong drinks advertising, which was to come into force on 1st January 2012. This was likely to have a negative impact on the whole media market. Thanks to the efforts of media, clients, ad and media agencies, and modern business authorities, the ban was postponed until 2016 and saved over 10M EUR for media business. We dont see any big differences between Lithuanian and other CEE markets and it is because we have been developing our internet business a little more slowly, using all possible leads from the nearest markets. News portals are among the most influential media channels, but Facebook, with its 1M Lithuanian internet users, is in the lead and creates the need to be on the internet. As the media market is developing swiftly, and the economic downturn still impacts on clients decisions, the need to justify spending versus income encourages the market to seek measurement availability for all media means. The most modern media internet is on the priority list: how we track our campaigns, what may have an influence on them, which target groups does our message reach, and how they react to one or other format, what pushes them to click on an ad and how it influences branding. I believe that 2012 will be a year of constant challenge for us, to keep clients active and believing in media as the most influential factor in developing brand awareness. Lithuania will face the transformation to a digital broadcasting market and this will influence business attitudes as a whole. I believe we will go through the process more gently as we have learned lessons from our neighbours: Estonia and Latvia. I believe in fewer mistakes in rate cards and lower audience losses. Cheap, widely available mobile broadband and the skyrocketing number of smartphones on the market makes it
Offline media owners faced up to the need to be on the internet, as that channel in particular had been the growing flagship of media business in recent years a growth of 15.8% compared to 2010. In the long run internet penetration will continuously increase. In autumn 2011 it reached 69%, with a 5.5pp increase compared to the same period in 2010. Thus, MTG launched TVPlay, LNK presented a new portal, and LRTV started live broadcasting on its site.
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safe to predict that 2012 will be the year of mobiles in Latvia. The largest content providers are hurrying to make their sites mobile friendly, producing both mobile apps and mobile websites. Several brands have opted to produce mobile-only content (apps, games, websites, ads), and QR codes have become widely used for marketing purposes, but the results so far are not too satisfactory most of the audience are still getting to know their new smartphones and app users are mostly early adaptors. This is expected to change in 2012, as smartphone penetration doubles and interesting content becomes a lure for consumers to expand the use of their devices.
Do you CEE? 2011
recent years, we still have rather strong social sites in our own language targeted specifically at our own country. As for areas in which there will certainly be market development, one is likely to be further thematic fragmentation and filling in the remaining topic niches. This trend can already be observed in the developments of the main news portals more and more of them are launching different language versions, or incorporating video content and streaming services as part of their offer. On the other hand there are a given number of large players on the market already competing for rather limited advertising revenue. The other likely direction is the search for non advertising-based revenue as well as the potential of mergers between the industry players with the aim of optimizing costs and increasing combined market share. Nevertheless, the main obstacle for development that I can perceive is the absence of unified game rules when it comes to the measurement of performance. The market is in a good position for growth in terms of advertising spends and should soon become the second biggest segment for advertising revenue after TV. However, this must be matched with a joint effort by the core industry players to build the credibility of audience measurement and monitoring of campaigns.
Aleksandras esnaviius Director DELFI
As a country we are emerging strongly following a recession and are well positioned for strong economic growth in the near future. The internet as an industry is a growth area itself, even during the economic downturn when the ad spend for e.g. newspapers is declining and TV growth rates are just in line or slightly higher than inflation, the internet is forecast to see double digit growth rates.
The internet is one of the widest open doors for globalization and the core users are also younger and more open minded people. Online measurement and clarity about it is hugely important. At the end of the day it is the currency of the industry. Having a strong and reliable currency is a fundamental element for growth and development. 2012 will definitely be a year of increasing competition and traditional media moving more aggressively into the internet or, for those who already did this, fighting to increase their presence there. It will also be a time when more emphasis will be put on all kinds of streaming services. In Lithuania, it is interesting to see that despite the fast growth of Facebook and other global social networks over
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Poland
Poland
19.1M internet users

Poland is the second biggest pure CEE market after Russia. With an internet population reaching over 19M users and internet penetration equal to 54% there is a huge potential for growth on this market. In 2011 Poland witnessed the growing popularity of YouTube, a fierce battle between the worlds largest social networking service, Facebook, and its local competitor, NK, and dynamic changes in the group shopping sector.
poland
Do you CEE? 2011
Table 1. Top 10 websites in Poland by reach (Megapanel PBI/Gemius (gemiusAudience), December 2011); the ranking includes both audited and non-audited websites: for non-audited websites page views and times are not available
Market Overview
While looking at the ranking of top 10 sites according to the number of Real Users at the close of 2011, one might think that not a lot has changed since December 2010. Indeed, only one new site entered the listing last year - gazeta.pl, the horizontal portal of one of the largest media groups in the country, Agora SA. Gazeta has replaced another player, interia.pl which was one of the first portals on the local market, created in 1999, as a common undertaking of Comarch, the leader of the Polish IT market and the biggest Polish radio station RMF FM. Interia.pl still maintains a high position on the market, ranking 11th in December 2011, and reaches 37% of internet users in Poland. Nevertheless, Poland followed 2011 global trends, and saw major changes in the online industry. Video, social media, e-commerce and mobile these four sectors brought Poland closer to the Western markets, often strengthening the position of global players versus local brands. User-generated video content, including movie clips, TV clips, and music videos, as well as amateur content such as video blogging and short original videos YouTube had it all for the Polish
users. Its popularity has risen significantly and this video sharing and streaming website managed to acquire around 1.5M more Real Users than in December 2010 and improved its reach by more than 5pp (from nearly 65% in 12.2010 to 70% in 12.2011). It was also quite a year for Mark Zuckerberg and crew, whose site added an impressive 2.5M additional Real Users. The reshuffling between social networks was broadly discussed by the local media, mostly due to the fact that Facebooks growing market share was perceived as a threat to Polish players. And this scenario was realised as from December 2011 Facebook took 4th place in the ranking of most popular websites in Poland, while the position of nk.pl, one of the most dynamically growing Polish start-ups, began to deteriorate. Formerly known as Nasza-klasa, which means classmates, nk.pl lost more than 1M users in 2011 (corresponding to almost 8% of reach) and dropped from second to sixth position in the ranking of top 10 Polish websites. Trying to regain its market position, nk.pl provided new functions for its subscribers. In 2011 this social portal came up with a new computer application miniNK, which integrates instant messaging with news feeds from the nk.pl
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personal website in the form of an external application. Additionally, it became available on mobile phones on all crucial platforms. Similarly, the user base of the leading market e-commerce player allegro.pl has also shrunk (from app. 60% of reach in 12.2010 to 57% in 12.2011). In order to expand the extent of its operations on the market, the company has decided to buy 90% of the shares of agito.pl - one of the most important Polish e-stores selling household goods and Radio-TV appliances. The Allegro Group is also constantly expanding its online services. In the previous year the company launched a new website fully dedicated to group shopping citeam.pl. Additionally, in the middle of January 2012, the Allegro Group introduced a new mail-order service sendit.pl which should enhance the shopping experience for customers of its online auctions. This move has helped Allegro to separate its operations from the postal companies and thus to manage the sales process better by taking over the logistics from external players. Poland is also one of the leading CEE markets with respect to the use of mobile internet. The results of the 2010 edition of the Mediascope study conducted by IAB Europe showed that Polish mobile internet users spend 10.3 hours each week on the mobile internet and come out top across European markets (Mediascope, 2010). In March 2011, the Polish online audience measurement study - gemiusAudience (known in Poland as Megapanel PBI/Gemius), was enriched with the audit of mobile pages.
Do you CEE? 2011
Market Highlights
There is not a shadow of doubt that 2011 was the year of collective buying for Polish internet surfers. Browsing for good deals on slightly more luxurious products and services seems to attract the Polish customer. The high dynamics of this market development is also a consequence of the ferocious competition between the key market players and the emergence of many new fast-growing start-ups that are trying to find their own place in this market niche.
In only a single year websites offering group shopping attracted more than 1.7M additional Real Users and the whole sector closed the year reaching 30% of the Polish online population.
The results prove the dynamic growth of mobile internet surfing in the country. Over the course of only nine months the share of mobile page views, among all domestic page views, has nearly doubled and as a consequence in December 2011 almost every 50th website viewed by Polish internet users was seen on a mobile device.
In 2011 Groupon was the unquestionable market leader in Poland. However, its position has been gradually deteriorating recently. The popularity of this platform peaked in March 2011 when the website attracted slightly over 5M Real Users, but from this month on the number of people visiting groupon.pl has been steadily decreasing. New players appearing on the market have introduced aggressive marketing and sales strategies and, consequently, managed to reap part of the Real Users harvest. This is especially true for citeam.pl, the collective buying platform opened by the Allegro Group - the irrefutable leader in the Polish e-commerce environment, which turned out to be extremely successful and at the moment seems to have the potential to endanger the position of Groupon. The dynamics of growth of citeam.pl is remarkable. Upon its launch in February 2011 the platform attracted merely 201 thousands of Real Users. Nevertheless, its promotional activities proved to be effective and daily deals attracted a lot of e-shoppers. Apart from the group buying websites, Polish people seem to be highly interested in finding attractive offers via online classified ads websites. Recently, a new market leader tablica.pl emerged as a result of the rebranding of the other online classified site szerlok.pl. The portals change in name and marketing strategy managed to significantly boost its popularity. In December 2011 it turned out that approximately every sixth internet user in Poland visited tablica.pl at least once. The other key market players (gumtree.pl, gratka.pl and olx.pl) were left lagging behind.
The websites with the highest number of page views from mobile phones in Poland in December 2011 were: wp.pl (74M mobile page views), onet.pl (60M mobile page views), fotka.pl (nearly 37M mobile page views), allegro.pl (22M mobile page views) and gazeta.pl (21M mobile page views).
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Group shopping sites in Poland
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Chart 1. Top 5 group shopping websites by reach level (Megapanel PBI/Gemius, December 2010 - December 2011)
Almost the same percentage of women and men constitute the Polish internet population. Nevertheless, men seem to be much more active on the World Wide Web. In December 2011 not only did they view almost 500M more pages than women, but also spent 1 hour and 15 minutes on average per user more than the average female user. Most Poles active online are young people aged 15-34. Users between 25 and 34 most eagerly browse the internet, spending there on average almost 28 hours per month. They also seem to be interested in obtaining information from various sources as the number of web pages they open per month far exceeds the number of page views associated with other age categories in the gemiusAudience study. In comparison with 2010 the online population of seniors (55+) expanded significantly and in 2011 over 300 thousand more users from this age category were present on the Web. People with high school education, followed by users with a masters degree, constitute the largest segments of Polish online population. When the time spent online is taken into consideration, the part of the market that is the most engaged in browsing websites are Poles with a bachelors degree, who
dedicated an average of 29 hours per month to visiting the web in 12.2011. Contrary to trends visible in other European countries, a high proportion of Polish internet users (34%) come from rural areas. Poles spending most time on the internet are inhabitants of relatively big cities (200,000 500,000 people) - an internet surfer originating from this type of city was online for approximately 27 and a half hours in December 2011. In 2010 the Polish internet landscape looked slightly different people living in the largest Polish cities (>500 000 inhabitants) were the ones spending the most time online.
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Do you CEE? 2011
Andrzej Garapich President PBI (Polish Internet Research)
2012 will certainly be a year of interactive TV and VOD services. This is the most promising part of the internet industry, as youths prefer watching TV-like content using video platforms (such as YouTube, Vimeo etc.).
Poles believe that they have an exceptional market and, thus, local interactive brands are very strong and successfully compete with global ones. The only ranking led by a global player in Poland is the one for search engines, where Google visibly dominates. So, apart from this, and Facebook whose position has recently been improving, the industry can be characterized as dominated by local brands. Furthermore, the Polish market can be described as mature, where surprising events rarely happen. The last unexpected turn took place in 2006, when the social network portal Nasza Klasa (nk.pl) was launched. Since then, changes, as on other mature markets, have happened gradually. The most significant recent change on the market happened in August 2011, when Facebook overtook the abovementioned local social media leader. The Polish web landscape, with over 19M internet users (7+, according to Megapanel PBI/Gemius, December 2011) is one where the advertising sector is able to maintain an internet branch. There are only a few instances of Polish entrepreneurs expanding their business to other regional markets such as Gemius, the research agency and Allegro Group, an e-commerce platform. The simplest explanation for the weak global activity of Polish brands is the size of the local market which is large enough to maintain the domestic brands, but not lucrative enough to support their global expansion. On the Polish market, we can observe the domination of horizontal portals. There are five of them, all very successful. In the majority, horizontal portals (except o2.pl) belong to other media owners (newspapers, magazines or TV groups). The most popular instant messenger, Gadu-Gadu, which is a part of MIH Holding (owned by Naspers), was also created by local developers. Nk.pl, as mentioned above, recently lost its first place among social media websites, but still has more than 11M monthly users and for more than 2.5M Poles is the only site of this type they use.
Launching video and audio stream measurement should help to convince advertisers to use such channels for marketing activities. The main obstacles on the Polish market are generally similar to those elsewhere in the CEE. First of all, the domination of the global players limits the operational space for local entities. Other obstacles include the economic situation of the industry and the low level of internet infrastructure. Overregulation and high taxes additionally restrict the development of the interactive market. Still, Poles are very innovative, well-educated and very open-minded and I believe they can be very competitive in the global online reality.
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Maja Biniewicz Digital Consulting Manager Starcom
In 2011 the Polish market was faced with several interesting events on the social media market. The first of these was Google+ debut. Surprisingly, even after a few months, it didnt gain much market share, due to Facebooks strong position. It should be noted that most social network users already have an account and friends on Facebook and have no motivation to change this. Another turning point for social media saw Zuckerbergs giant beat the key local player nk.pl in terms of reach. Facebook has not failed to notice this fact and in 2012 is planning to open a Polish office which will help to prepare more elaborate social strategies. Currently, advertisers tend to concentrate on ad hoc actions on this platform few have a long-term strategy. Poland is quite a big market and, thus, there are many advertising opportunities: all online advertising areas are pretty developed and there are almost no clients who dont promote themselves via the internet at all. This provides a certain turnover but, at the same time, makes the Web increasingly more cluttered. In 2011, an average campaign had 30-40 million impressions, so its very likely that on every website there are at least a few ads. This glut poses a specific challenge: how to maintain online advertising effectively? Video pre-rolls and rich media are new and quickly developing concepts of online presence. Almost every publisher has a video advertising offer, as online becomes a TV campaign extension. The main obstacle here is content cost publishers are not able to provide as capacious inventory as the market demands since they have to pay high amounts for copyrights. In terms of rich media there are two significant players who offer these kinds of creative formats. More aware clients include engaging ads as part of their strategy as normal banners are less effective CTR- and visibility-wise.
2012 is expected to be the year of the mobile. A very high mobile penetration on the market should be noted over 100% in terms of active SIM cards. Recently, the owner of one of the biggest Polish TV platforms bought an LTE (Long Term Evolution) license and is trying to popularize new mobile internet connection quality.
On the other hand, mobile operators mainly sell smartphones, another catalyzer for growing mobile internet penetration. It is predicted that in 2012, 40% of all mobile phones will be smartphones. Furthermore, one of the hottest topics for the upcoming year is ad exchanges. Display networks have plenty of unsold inventories and will try to capitalize on that. The question remains: will portals join this concept?
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10
Romania
7.7M internet users

Romania, the biggest market in South-Eastern Europe, was another of the countries in 2011 in which hitherto popular social networks were facing an uphill struggle with the domination of the global market player. The opening of a local Google office, the launching of yahoo.ro and with Romanian start-ups recently figuring among the most promising in Europe, this market appears to be on the right track to becoming one of the regions locomotives.
ROMANIA
Do you CEE? 2011
Table 1 Top 10 websites in Romania by number of unique clients (SATI, by BRAT, Traffic measurement, December 2011)
Market Overview
In order to provide a valuable and complex analysis of the Romanian online landscape, this chapter is based on the results of the research conducted by BRAT, Romanian Joint Industry Committee for the internet, under the name of SATI. Besides the traffic results (usually technical metrics as page impressions, visits, unique clients - cookie based indicators), the results for the viewing audience of websites and the socio-demographic profiles of visitors are available in this study. The traffic results are delivered in real-time, while the audience and socio-demographic results are provided at 3-month intervals, representing the audience values calculated for the average week in a 3-month period. The last delivery corresponds to the period 1st September 2011 - 30th November 2011. In the Do You CEE? report two separate rankings of the top market players from SATI are included. The first is the ranking of the top 10 websites by traffic figures (by the number of unique clients, a cookie-based figure). The second ranking is based on the results of SATI audience measurement, and it represents the average weekly number of persons visiting websites and their socio-demographic profiles. Please note that, due to differences in the methodology, the SATI results
should not be directly compared with gemiusAudience data for other CEE markets presented in this report.
In 2011, the video sharing service trilulilu.ro continued to achieve the leadership status it had won in its early days. In December 2011 it was the most popular Romanian site ranked by the number of unique clients, reaching approximately 3 million.
Thus, the leader follows the pan-CEE trend for the increasing popularity of sites sharing video and audio content, as Trilulilu is the first Romanian web page of this type. This free access site was officially launched on 22 January 2007. The second biggest site measured in SATI, also ranked by the number of unique clients, is the forum on softpedia.com. Within 10 years of its existence Softpedia has been successfully maintaining its high popularity. This multi-subject forum offers discussions on numerous issues spanning from software, photography and hardware to users opinions on various matters such as gastronomy, movies and many, many more.
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Table 2. Top 10 websites in Romania by audience (SATI, by BRAT, Audience measurement, September 2011 - November 2011, universe: 14-64 y.o., urban areas)
News portals are well represented in the top 10 listing of SATI traffic measurement. No less than 3 general news sites stirileprotv.ro, adevarul.ro (which dynamically entered the top 10 websites in 2011) and realitatea.net managed to accumulate between 2.3 and 2.5m unique clients in December 2011. Additionally, the so-called online yellow press services (tabloid) category contribute to the impressive traffic results here, represented by two titles: Cancan and Libertatea. 9th position is occupied by cinemagia.ro, a site dedicated to movie reviews. This service has been constantly increasing its popularity since it was included in SATI 4 years ago. Out of the 3 best Romanian sport sites sport.ro, gsp.ro and prosport.ro - only sport.ro managed to enter Decembers Top 10. It is important to note that the previous leader in the Do You CEE report, the Romanian section of hi5.com, lost most of its share in local visitors preferences. In December 2011 it withdrew from measurement by BRAT and therefore
it is no longer present in the results. The new leader in the social media category, according to the traffic results, is tpu.ro, a relatively new site that recorded a rapid growth in the few years since it started being measured by SATI. This phenomenon is going to be discussed in the Market highlights part of this chapter. As presented in the Table 2, in its last 3 month period before exiting SATI, the Romanian section of hi5.com maintained first place in audience measurement, with over half a million persons visiting the website on average per week. Other leaders performance (trilulilu.ro, forum.softpedia.com, cancan.ro and libertatea.ro) in terms of traffic is confirmed by their audience results. The socio-demographic profiles of the visitors reveal a balance between women and men for most of the websites in the top 10 listing, except the sports websites, gsp.ro and sport.ro, where men represent two -thirds of all visitors.
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Social networks in Romania
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Chart 1. Popularity of chosen Romanian social networks audience by the number of monthly Unique Visitors (SATI, by BRAT, Traffic measurement, December 2011 December 2012)
The social network, hi5.com, has a relatively young audience, with almost 69% of its visitors between 14 and 44 years old. Visitors to trilulilu.ro and forum.softpedia.com have a similar profile. The largest group of their users is made up of persons aged 14-24 years. The youngest audience is registered by tpu.ro, where over 77% of visitors are less than 34 years old. The tabloids, cancan.ro and libertatea.ro, have an audience which has a higher affinity with the middle-aged segment who have a higher social status.
Market Highlights
The year 2011 saw a great struggle between social networking services on the Romanian market, which is not really a novelty in the region if one takes into account the situation in such countries as Poland or Hungary. Still, on no other market did this clash end with a definite withdrawal of several players from the market. However, a dim ray of hope still flickers for local websites of this type and may indicate some reconstruction of the social network idea. Due to the growing importance of the social media mogul, Facebook, such hitherto dominating sites as neogen.ro and hi5.com (a global social network, popular in such regions
as South America) faced a danger in terms of keeping their position on the Romanian market. Both were built on a similar model to Mark Zuckerbergs site (user creating an account to meet friends and maintain relationships, among other things) and were used mainly by teenagers and young people (in September 2011 - November 2011 results of SATI Audience measurement for hi5.com, the main group of users, 37.2%, was aged 14-24 years). Nevertheless, most of this group of internet users seemed to prefer the worldwide aspect of Zuckerbergs site, as well as all the elements related to its user experience, and in 2011 decided to join the globally-growing mass of Facebookers. Due to this, neogen.ro, closed down in 2011, and merged with zumzi.ro. Hi5.com, acquired in December 2011 by another social networking site, Tagged, is currently undergoing several changes implemented by the new owner. Nevertheless, it continues to lose its share on the Romanian market.
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ROMAnia
Do you CEE? 2011
There is still one local player which remains oblivious of the problems its counterparts have had and is gradually improving its position on the Romanian market. Tpu.ro (Toti Pentru Unu, All for One) is making moves to possibly regain the market share lost by hi5.com and neogen.ro.
Based on SATI Audience measurement (September 2011 November 2011, 14-64 y.o. universe, urban), the Romanian online market is dominated by young and very young people. 67.7% of the internet users in the country are under 40 years old. The number of users decreases with age - only 2% of internet surfers are over 60 years old. Graduates of high schools and universities are extremely well represented among Romanian internet users. According to SATI (Audience measurement, September 2011 - November 2011, 14-64 y.o. universe, urban) they constituted 77% of the total number of internet users. Vocational school graduates accounted for 8.8%, while school children of grades 1 to 10 constituted 14.2% of the online population. As in other CEE countries, an important number of internet users in Romania live in the capital city (Bucharest) or in other large cities (over 200,000 inhabitants); this amounts to approximately 42% of all internet users. Almost 30% of the Romanian online population live in cities with 50,000 200,000 people. The remaining 28% live in places with less than 50,000 inhabitants.
TPU is slightly different than competitive services. It is more similar to a combination of a social network and a forum, where one can create an account and ask questions of various kinds from about 30 different categories of ones interest and expect other members to answer the enquiry. The person answering may gain points if the response is highly informative, witty, interesting or given quickly. The site also offers responses from experts in a given category of questions. TPU also offers a streaming channel, group-buying option, and a free blog platform to all its users. Based on the assumption that people usually at first turn to other people rather than a search engine when seeking an answer to a burning question, the site, launched at the beginning of 2009, is gradually gaining popularity on the market with its monthly unique visitors number increasing by over 500 thousand in one year (December 2010 - December 2011, SATI, by BRAT, Audience measurement). 2011 was also a popular year for Romanian internet and technology start-ups. A few of them gained international recognition and the attention of global investors. The Telegraph and TechCrunch 2011 ranking of the top 100 emerging technology businesses in Europe included three companies from Romania. One of them is UberVU, a social media monitoring platform, founded in 2008, with offices in Great Britain and Romania. Believing in the market potential and the talent of local entrepreneurs Microsoft had already built its technology centre in Romania in 2006. The largest of such hubs in Europe cooperates with numerous small local businesses such as software and application developers.
The gender structure of Romanian internet users is relatively balanced, reflecting the general structure of the population. According to SATI research, men are only slightly better represented than women, accounting for 51.3% of the online population.
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Ioana Anescu Managing Director IAB Romania

Like any other emerging online market, Romania is still in search of the best recipe that can bring stability and maturity to its business environment. Although it has a huge growth potential, the digital landscape lacks unity and overall confidence in the internet as a good branding vehicle or payment tool. The players are continuously striving to build a proper understanding of what digital advertising really means and to deliver satisfactory results for the advertisers.
tech talent and computer literacy in urban areas, Romania is expected to soon become one of the most active and energetic countries in the region in terms of digital business. Romania is also the only Latin-speaking country in the region and the good English knowledge among the population makes it an open-minded market for adopting successful business models from most of the Western countries, as well as being a hub for many CEE-oriented companies, campaigns and projects. Still, the strength of the local players is not that solid for competing successfully with global giants in terms of efficiency. Google, Facebook and Yahoo are a constant presence in clients briefs and the lack of local alternatives makes it hard to overcome this domination. However, they are integrating pieces next to the more flexible and adaptable local content providers. The year 2012 will be, in my opinion, a year of learning and consolidation - the year of engagement and integration. Before thinking about video, mobile, augmented reality and other innovative formats, it is time to consolidate what the market already possesses and learn how to use it properly. We need more know-how for the professionals involved in digital and better understanding of the current tools, channels and overall mechanisms of the market. This will eventually bring more trust, both from the users side - in engaging with brands and from the advertisers side - using the internet as a purchasing channel. The online industry is supplying tools like behavioural targeting, mobile campaigns, affiliate marketing, video advertising, and social media, but marketers need to understand how to use those as a whole, as part of an integrated strategy. The main obstacles for the market are the lack of confidence and know-how. We need to provide evidence for online effectiveness in terms of branding as well, not just action and performance. Furthermore, an understanding of the long term use of online as part of marketing strategies needs to be ensured.
The boom in group-discount websites in 2011, the growth in social networking projects and the high demand for this kind of action in marketing strategies, the localization of Google activities by opening a local office, the launching of yahoo.ro all these things, however, show a strong orientation of the market towards communities and performance.
All kinds of research that provides more data about traffic, user behaviour, role of digital in branding, decision making and purchase chain, are of a significant value and provide a great deal of support for the development of the market. The most important strength of Romania is its development potential. As one of the top countries in terms of broadband penetration and speed and as one of the biggest countries in the region in terms of population, with its governmental programs aiming to increase internet and computer penetration throughout the country, taking into account the fairly accessible mobile internet subscription fee and high penetration of 3G technologies and, finally, the great
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Dragos Stanca Managing Partner Q2M

The main trend visible in 2011 was buy more for less. The average price of a campaign was 30-50% lower than in 2010. Another important thing that could be noticed was the fact that the discounts were higher, which in a few words means: more work for less money. Allocating more and more resources for Facebook campaigns is another trend their share in the total digital media budget is around 10% now. When calculating the total share of online ad spends another 20-25% allocated to Google should be added. All in all it makes the general trend on the local market seem like bigger volume, less money for each campaign and for local websites. Still, after all, the online market is growing, though only large publishers or sales houses manage to do real business. One problem of the market is the vast number of sale houses or so-called entities over 30. This makes the big media agencies very strong in negotiations.
The most coherent media group in doing cross-media strategies, tv-print-online, is in my opinion CME, with a lot of media exposure for the VOD platform VOYO and good synergies with the Mediafax Group owned by the CEO of CME, Adrian Sarbu. The total share of online in the total advertising mix is still small, despite the collapse of print, and the main problem is the fragmentation of the market in all its components: sales houses, publishers, interactive agencies and so on. The only consolidated part is that of media agencies which are using their position to negotiate better prices, which even sometimes are considered too small. From my point of view the market will surely develop in the sector of transaction-based services and e-commerce. We have enough publishing websites, everybody thinks they know the content (politics and football, too). But few players are producing real content with real journalistic value. It is time for real business and real extra-advertising money.
One of the most significant events of 2011 was the downfall of the former stars, hi5.com and neogen.ro. The latter was closed in January and merged with zumzi.ro. The only local social network that faced up to the competition of Facebook was tpu.ro, a local Q&A platform, which in February 2012 had as many as 2.5M Unique Visitors.
As far as local players that compete with global giants are concerned, Kuponiada, FunDeal and Zumzi are also doing a good job competing with Groupon. Other significant moves in 2011 were the rebranding of ePayment into PayU, after Naspers took over the company, and the transition of traditional publishers to more online behaviour, like Ringier Romania that plans to invest more in online. Allegro is another active local player with some acquisitions to be closed soon.
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Russia
55M internet users

Russia is indeed a vast market full of potential, but not for everyone is this potential to build on. The experience of Western internet marketers proves that Russia is a hard, very competitive market. Both global giants, Google and Facebook, despite conquering most other places on Earth in terms of online, have not managed to surpass the power of local leaders Yandex and the Russian social networks: VK and Odnoklassniki respectively. The future may, however, bring change, as the global players are beginning to catch up
russia
Do you CEE? 2011
Table 1. Top 10 websites in Russia by reach level (gemiusAudience, December 2011)
Market Overview
Russia is the biggest CEE market and at the same time one of the most specific. The combination of the loyalty to strong, local brands and very competitive, unique business conditions pose a challenge for Western marketers. In spite of their success, or even monopoly, in other markets the global leaders are still not able to win over the hearts and wallets of Runet users. Take Google for instance. An international giant and the number one search choice for people around the world, is number two in Russia, while the Yandex remains leader. Yandex is a local search engine and horizontal portal which is also present in Belarus, Kazakhstan, Ukraine and, since last year, Turkey. However, a look at past data shows that Google is beginning to catch up with its Russian rival. It gained over 9M Real Users (RU) in one year and its reach among the online population grew by almost 10 percentage points, while Yandex grew by 4.5M RU. Due to rapid audience growth, the reach of the latter remained the same. The pick of social networks, vk.com (formerly vkontakte.ru) and odnoklassniki.ru, are the two main players in this field.
With almost 20 billion page views monthly they leave Facebook far behind with a mere 600M. Of course Facebooks 20M Real Users is a lot, but they spend less than one hour monthly on average using the service, which means they are not as active there as on the local social media services. The Russians interact, share, chat and play using domestic networks. From a business perspective, the shares of both Russian social networks are fully or partly controlled by one fund: Mail.ru Group. This group is also a Facebook and Zynga (gaming giant) investor.
However, it should be noted that Facebook is rapidly developing its user base in the Russian market. From 14th place in the ranking of Real Users it went to 7th, gaining 9M users in just one year.
According to gemiusAudience data, the monthly average time per user almost doubled, which is also the case with the overall number of page views per month. At the same time,
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odnoklassniki.ru and vk.com also experienced some growth, but not as rapid, with the latter almost stagnant in terms of reach. Vk.com is also experiencing a drop in terms of user engagement the number of page views in December 2011 was 3 times smaller compared to the same period in 2010. 2nd place in the ranking is taken by mail.ru, a website with a long tradition which started off as a free e-mail service and then developed into a horizontal portal. With over 47M Real Users in December 2011 it is even closer to the main competitor (yandex.ru) than a year before, and with this growth pace, both in terms of RU and user engagement, it may become the most popular website next year. Wikipedia.org is another global service that appears in the Russian ranking. Having gained 5M RU last year, it is developing steadily and managed to improve its rank by one place last year. BigLion.ru, which came in 8th, is an online group shopping service. The group shopping frenzy conquered Europe last year and Russia was not an exception. A bunch of local services of this kind entered the market, while biglion.ru won most of the prizes. It developed with exceptional speed (3M RU in January 2011, over 19M RU in December 2011). However, the website does not manage to get as much engagement in terms of the number of page views and time spent on site as other services from the top 10 ranking, but this may be a part of its specific character. 9th place was taken by LiveJournal, a blogging and community platform now owned by a Russian company SUP. LiveJournal also slightly improved its position compared to the previous year and almost doubled the overall number of page views generated on the site. The last place in the Top 10 ranking belongs to avito.ru, an online classified site controlled by the Swedish investment fund, Kinnevik. Avito.ru experienced a worse period during the year, but raised its reach significantly at the end of summer 2011. Typically for a classified ads services, the number of page views is relatively high. 2011 was also a bad year for some players which formed the Top 10 a year before. Mozilla.com, a very important place for Russian internet users in 2010 (over 20M RU) is nowadays even outside the top 20 after losing over a half of its audience. Rambler, another horizontal portal, fell by 3 places to 11th,
with its user base reduced by almost 30%. Last year also saw newcomers that could make it to the top soon: iwi.ru, a VOD service, rose from almost nothing to a 22% reach during 2011.
Market Highlights
Some of the processes and phenomena which take place on the Russian online market are similar to those familiar to Western and Central Europe, and some are unique. Last year saw various trends emerge in Russia, among which were VOD and group buying, but also some promising Russian curiosities. As in other CEE countries, the VOD services hit the market. What they offer is full movies, episodes or TV programmes to watch, either for small amounts of money or for free (in the latter case the user is shown a video ad before watching the desired material). Both websites offering paid content, and those with content for free, formed a group, which seems to have filled a relevant niche and attracted over 18M Real Users in Russia in December 2011, while a year before it was not even 6M. The main player in this sector is ivi.ru, which experienced a gain of 5M RU in just 4 months. The website offers very diverse content, spanning from fresh blockbusters straight from Hollywood, through Russian series and children entertainment, to niche specimens like horrors from the Soviet era. Additionally, it features music of various genres and, thanks to cooperation with Warner Bros, a special set of movies from this studio. As for the business model, some of the newest content is paid and the rest is free and preceded with a video ad. Other Russian VOD services were not such a success as ivi.ru, but growth is also clearly visible in these cases. Perhaps the winning method here was content and payment method differentiation. Some other VOD websites only offer Russian movies/series (videomore.ru, tvigle.ru, zoomby.ru). What is more, the competition is either only fully paid or fully free. The most successful ivi.ru features both local and foreign videos, additionally it is mostly free, but premium content such as new movies needs to be paid for.
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Another global trend which also appeared in Russia in 2011 was group buying. As said before, the unquestionable leader in this field on the biggest CEE online market in the previous year was BigLion.ru.
To say more about BigLion, it has a nearly identical format and layout to the global leader Groupon, but users dont seem to mind and the site Real Users number was raising rapidly last year. What about the competition? Both main market followers (groupon.ru and kupikupon.ru) are striving not to lag behind, however the gap between them and BigLion keeps growing. Also the latter, kupikupon.ru, has had some severe problems with customer service and product delivery, which most probably made it less competitive, causing it to fall from 17% in September to 12% reach in December. Counting in a few less relevant players, the group buying market boasts a reach of almost half the online population altogether. As for Russian innovations and startups in the field of social networks and communications, the Mail.ru Group, which acquired ICQ (a popular online communicator) in 2010 and
holds the position of the unrivalled social networking player in Russia, is responsible for the launch of yet another social media initiative: Futubra. Futubra.com is intended to be an easy way to share interesting media with others, technically perceived as a mix of Twitter and Tumblr, only allowing for a short text describing the multimedia the user is sharing. Launched in January 2012, Futubra is still a beta version available only in Russian and its performance is yet unknown however the power behind the new service promises possibly influential innovation. Coming finally to changes in the online advertising industry, a trigger in this field surprisingly comes from the government a beer TV ad ban came into force at the beginning of 2012, which means a paradise for online marketers. With Russia being one of the biggest beer markets, most of its huge beer advertising budget is now expected to move online. Mobile advertising should also benefit from the situation, given the development of the mobile applications market in the previous year on all platforms, tablets most of all. Apps from publishing houses and publishers for iOS and Android hit the market strongly in 2011; most leading portals already have their versions on those platforms. The category most heavily advertised in mobile is forecasted to be Luxury.
Group shopping sites in Russia

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Chart 1. Collective shopping websites in Russia (gemiusAudience, August 2011 - December 2011)
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Regarding the formats used in display advertising, there was an interesting discovery unique for the Russian online market a video layer featuring a live human character, e.g. presenting an offer and clickable by the viewer. It has been proved that its CTR may even reach as high as 9%.
Do you CEE? 2011
(above 36 h). The last group also generates significantly more page views than one could expect from the age split in the Russian online population. The largest group among the Russian online audience (users with vocational education) has experienced a significant gain during the last year with over 4 million newcomers. The second biggest group is graduates, who accounted for 30.6% of internet population in December 2010, however a year later their share decreased by 2pp. Users with incomplete secondary education are very active online they spend almost 49 hours online monthly on average. The overrepresentation of users coming from Moscow and St. Petersburg is smaller every year (23.9% in 2010, 21.5% in 2011). The strongest group is formed by inhabitants of towns and cities of up to 0.5M inhabitants (a rise of 2pp y-o-y). It must be said that users living outside the two biggest cities are relatively more active, with more time spent and more page views generated. The least active are users from the Far East region.
The online audience composition in terms of gender resembles the general population structure: women are slightly overrepresented and it does not seem to change much over time. Men spend a little more time online monthly (34 h 45 min compared to 33.5 h), but both genders are evenly active when it comes to page views generated. The majority of the online audience is constituted by young people: 57.1% are under 34 years old, however a year before it was over 60%. Seniors are definitely a group gaining share (1.5pp y-o-y). The two most active segments of Russian internet users are youngsters up to 24 years (40 h online on average per month) and people around forty years of age
Boris Omelnitskiy President IAB Russia
which resulted in an increase in the online budgets made by the business representatives and advertisers. Thus, the already existing internet infrastructure, such as search engines, social networks, communication services, media content resources, video and photo sites, successfully developed to meet the users demands in a battlefield which experiences competition with such global players as Google and Facebook. 2011 was characterized by the stable growth of the market leaders, which led to centralization, and presently 6 7 of the largest holdings control up to 90% of all internet advertising budgets. At the same time the competition is preserved, but the bracket threshold for entry into the market has grown considerably. The main anticipated event of the year was the release of Yandex company on the stock exchange NASDAQ. This was preceded by the output of Mail.ru Group on the LSE at the end of 2010. These two examples of the leading internet companies in Russia inspired the whole market and have boosted the number of startups, new services, and businesses, including those related to interactive advertising.
The Russian online ad market is in a phase of active growth at the moment (+ 56% to its value in 2010 according to the rating of the Association of Communication Agencies of Russia, ACAR), due to the continuing increase in the number of internet users in Russia. It needs to be remembered that at the end of 2011, Russia took first place in the ranking of the number of internet users in Europe, pushing Germany into second place. A simultaneous increase can be observed in the frequency of network usage by moving users into online social activities, entertainment, gaming and consumer communications. Due to these changes, internet as a media channel took a significant place in the everyday life of Russian society
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Marina Solovieva Head of Performics Russia ZenithOptimedia
for real big international players, not for small and medium businesses. At ZenithOptimedia, and Perfomics our digital brand network we can see it across the CEE markets, and especially with all major clients here in Russia, starting from small real estate developers up to giants such as LOreal. Looking further along the performance funnel, not all marketers in Russia are as yet well equipped (in terms of knowledge, expertise and tools) to evaluate the ROI of their digital practices on their own brands, but we can see that they have become more and more sophisticated in this area, and subsequently demand more from the agencies to track deeper, analyze smarter, and report on the real performance of digital ad campaigns. Therefore, we envisage 2012 as the year for big global data-management platforms and for players entering the market seriously (Marin, Kenshoo etc). It is also surely the time for such local players and technologies (e.g. new behavioural targeting on Yandex). Working with them in partnership brings greater control over accountability, performance analysis, and optimization of digital campaigns, which helps clients to navigate through this increasingly complex digital world.
In these times of global media investment slowdown, the Russian media market still showed double digit growth for 2011. And it is true to say that the great majority of this growth was powered by the digital advertising which added up to over 40% in monitored spends year on year. With that pace of investment increase, digital has officially become the second biggest medium in the country (16% share of spend), only being at a respectful distance from TV, which historically has been the most powerful media channel, responsible for roughly half of all media spends. These changes in the media landscape are grounded on two big and important conclusions, which now sit prominently in the heads of marketers. First of all the audience is there, online: all soc-dem groups, all geographies, spending lots of time online and ready to interact. Secondly, internet actually works: for direct sales these performance channels do best (SEM, SEO, affiliate programs), or for engagement and keeping your customers loyal here the social media programs prove effective (VK, Facebook, Youtube). As far as audience development is concerned the clear indication of this digitalization is the fact that TV-viewership has decreased by 5% on major 12-54 TA, just within the last year. And if we look at the younger 16-25 segment, then for them theres not a single time spot in the 24h clock when TV reach would be higher than internet reach. This is, by the way, the strongest rationale behind why advertisers need to invest more in online video formats, and plan them together with their TV campaigns. Digital performance marketing is really the only area which has experienced a boom recently, and the coming years could be glittering years for those players who can win over the market with best performance and optimization solutions. Since demand in growth for e-commerce across all consumer segments has risen, big advertisers (even global FMCGs) have started to look into how they can monetize their online traffic directly. Following on from this comes the development of more complex and accountable search strategies, affiliate management programs, and SEO tools -
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Slovakia
2.6M internet users

2011 was, for Slovakia, a rather small, landlocked country located between the Tatra mountains and the river Danube, again a year of changes and new challenges across all market segments. The majority of online media publishers were busy with product development while launching new services and improving current offerings. 2011 was especially intense for Zoznam this horizontal portal introduced, in cooperation with InterStore.sk, a new online shop, Zshop. Furthermore, the online advertising segment was thriving and managed to strengthen the position of the internet in the marketing media mix. Contrary to this, advertising investments in print, outdoor, and radio decreased which, in the short term, helped to raise the internet to the 2nd media type in the marketing media mix in Slovakia.
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Do you CEE? 2011
Table 1. Top 10 websites in Slovakia by reach (AIMmonitor - IAB Slovakia - Mediaresearch & Gemius, December 2011)
Market Overview
It was indisputably a good year for Azet, the current market leader in Slovakia. In December 2011, Azet managed to increase its total number of Real Users, by 60 thousand, in comparison with December 2010. However, this improvement did not translate into a higher reach due to the overall growth of the Slovakian internet population. In 2011 users of Azet were less engaged on this website, spending monthly on average 3 and a half hours less than they had spent one year before. Still, when this result is taken into consideration, Azet remains the unquestionable leader on the market. In December 2011 an average web user visiting Azet was browsing this website for 5 and a half hours longer than an average internet user viewing the market runner-up Zoznam. Pokec (chat in Slovakian) - the social networking site launched in 1999 by Azet - also enjoyed a relatively constant level of popularity throughout the year, with 1M web users visiting the website on average per month. In 2011, Azet also introduced the discount portal zlavy.azet.sk, which tries to differentiate itself from the competition by offering aggressively low prices, often as much as 90% of the standard price on the market. Furthermore, the company introduced a new portal for car
drivers automoto.sk which offers current news, advice, and objective car tests. Zoznam.sk, the second most popular website on the Slovakian internet, owned by Slovak Telekom, is trying to continuously expand its scope of operations and introduce new websites that have the potential to attract the attention of Slovakian web users. In December 2011 Zoznam broadened its user base by nearly 100 thousand additional Real Users in comparison with December 2010, which corresponded with a decrease in reach equating to 1.5pp. In 2011, Zoznam introduced some new products to its already broad portfolio. One of the most interesting websites launched by Zoznam is Telk a personalized online TV guide that presents the airing times of TV programmes for 91 Slovak and foreign TV stations. The website, thanks to its Facebook integration, also enables the user to share favourite programmes and discuss them with friends via Facebook or remotely record them on to a Magio Box (satellite TV set) through an iPhone app. Furthermore, Zoznam, in cooperation with Deutsche Telekom, in 2011 launched Gamesload the first online portal in Slovakia allowing its users to download games legally.
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Sme.sk, the third most popular horizontal portal on the Slovakian market, is also striving not to stay too far behind its main competitors. In 2011 the website introduced two new online platforms Tlacovespravy.sme.sk, which focuses on promoting products, activities, and recent news about listed companies, and Elektro.sme.sk a new section of the shopping service, concentrating on electronic products. In comparison with December 2010 Sme.sk expanded its user base by more than 123 thousand of Real Users in December 2011, which translated into a slight improvement in the portals reach - by nearly 0.3pp.
Do you CEE? 2011
In July 2011 the portal launched a redesign and introduced a new logo. The main changes allowed readers to navigate more easily through the website in order to find the content that most interested them. Besides the visual changes, the portal also decided to head in a new direction, on similar lines to regular magazines. Aktuality started to publish interviews with celebrities and added more expert opinions and comments about current world issues. The other positions in the top 10 ranking are occupied by the three most popular news portals Topky, as and Pravda. Among the portals mentioned, Topky, the flagship news portal from Zoznam group is the most visited website by Slovaks, with 37.5% reach on the internet. Topky also managed to improve its market position in 2011 the most, gaining over 150 thousand additional Real Users. Furthermore, the Slovakian web users who visit this news portal seem to especially enjoy browsing through the recent information it publishes, since time spent on this portal by an average visitor increased by 8 minutes and the average number of page views generated per month grew by 28 in the period December 2010 December 2011. News from Topky also became available through digital television, Magio.
The website that managed to visibly improve its market position in Slovakia was aktuality.sk, owned by Azet. This news portal attracted over the course of 12 months nearly 350 thousand additional web users.
In May 2011 the website crossed the barrier of 1M Real Users and since then has been steadily growing. Aktuality invested a lot of money in new marketing campaigns in 2011, presenting itself as a reliable source of information.
Page views from mobile devices

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Chart 1. Number of domestic page views generated from mobile devices on the pages with the highest mobile traffic in Slovakia (AIMmonitor - IAB Slovakia - Mediaresearch & Gemius, December 2011)
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Market Highlights
As can be seen above, there is one very strong market leader with respect to the amount of page views generated from mobile devices azet.sk. 62% of all mobile page views generated from mobile devices in Slovakia in December 2011 occurred on various subsections of this portal.
Do you CEE? 2011
the internet the most eagerly among all the age groups identified on the market and in December 2011 an average member of this age category generated almost 660 page views. Nonetheless, the highest amount of time spent online (11 h 20 min) was achieved by another age category, namely web users between 35 and 44. 40.5% of Slovakian internet users have completed secondary education, including extended studies. However, Slovaks that graduated from secondary school but did not take the leaving exam are the most active online and spent more than 12 h 30 min on the Web in December 2011. Furthermore, 40.5% of Slovakian internet users live in places of fewer than 5 thousand inhabitants. Looking at the geographical regions in Slovakia, Slovaks living in the Koick region generate on average the highest number of page views (nearly 725 in December 2011) and spend the most time online 11 h 45 min for December 2011.
The audience of other Slovakian websites that lead on the market with respect to the number of generated mobile page views Sme, Zoznam, Topky, Aktuality and as visits these services from mobile devices to a much lesser extent. Furthermore, among the websites characterized by the highest traffic from mobile devices, Azet is also leading with respect to the percentage of mobile page views generated among all domestic page views (6.9%). In Slovakia there is still a huge gap between the internet usage from PCs and mobile devices. 5% of all page views generated in Slovakia in December 2011 originated from mobiles. Nevertheless, the share of mobile page views amongst all domestic page views is much higher than in the neighbouring countries Poland and Hungary, due to the more affordable prices for mobile internet in Slovakia. In the world of online advertising, new bannner formats (e.g. IAB Rising Stars) started to be implemented in marketing campaigns. Moreover, 2011 was unquestionably a year of creative strategies employing video content. Nevertheless, the real expansion of both approaches is expected to happen in 2012.
Men constitute a slightly bigger part of the internet audience in Slovakia. They are more involved in browsing various websites, since they generated on average 40 page views more and spent 45 minutes more online than female web users in December 2011. When the age categories are taken into consideration, the age group that is the most active in Slovakia are web users aged between 15 and 24. They also tend to browse
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slovakia
Do you CEE? 2011
Milan Dubec Head of the Methodological Commitee IAB Slovakia
The most important trait differentiating the Slovakian market from its neighbours is the fact that it is rather small. In many companies the marketing department is located in the Czech Republic, Hungary or Poland, so logically the domestic market situation is put before any strategies for Slovakia. Markets with fewer users and lower budgets need to have more effective and lower-cost products, which means: less unique content and less high-quality local services. But for the strong players this means a very significant local position.
For the local-global opposition the specific requirements of domestic language are a major issue. The use of diacritical marks translates into the popularity of given sites (except Google search, YouTube videos and Facebook). Among the most popular local entities one can point to domestic news portals and the Slovak social network Pokec.sk (with a share of 47% on the online Slovak market).
This site, with 1.2M Real Users per month (from a total 2.5M RU), is a strong online player, which is able to grow despite Facebook. Azet.sk freemail service is also very strong and attracts 1M Real Users. I am sure that the next years will bring more local content to users but only from strong portals and big brands. The other portals will deliver average or only must have content. The landmark for 2011 was certainly the establishment of the Google display network, as it will continuously get more and more share. The more clients go there, the higher prices we can expect there in the next couple of years.
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Denis Schvarcz CEO CORE 4
Understanding the data and its application can prove to be the distinction between successful clients and their agencies and the rest of the market. The Slovak online industry is sometimes viewed as a lab market for mobile operators, providing the opportunity to explore newest technology and trends, thus attracting young and talented people. In general, though, it is a median online market among the Visegrad 4 countries (Czech Republic, Hungary, Poland and Slovakia) so we do not see market development in significantly different areas. Social media is still on the rise, with Facebook reaching about 85% of the online audience at this time, as well as video content.
The Piano project started in May 2011 and was the most crucial event on the Slovak online market. Piano is a Slovak-based company that provides publishers with an independent common-payment system for their media websites using an innovative platform. The publishers themselves decide what content is placed within the system and the system enables them to monetize it. Today, Piano has 11 publishers and more than 50 websites within the system, reaching approximately 2/3 of the online audience. Slovak publishers participating in the Piano project represent about 63% of the daily print market and 39% of the weekly print market. But the project did not stay local. In early 2012, Piano launched in Slovenia and is currently in negotiations with publishers in 11 countries worldwide. They expect to announce a launch in two to four countries by the end of 2012.
High quality market data is collected and available for the industry. If there is still a potential area for growth then this is it.
Until recently, only basic measurements were generally being requested by clients as they were not always up to date with current opportunities for data collection, analysis and evaluation already available on the market. This, however, is changing quite rapidly. The pressure from clients to collect, analyze and evaluate data related to their online activities is growing. They understand the need for the best possible ROI on their advertising budgets much better. On top of this, they are willing to adapt their spending to make their campaigns and websites more efficient. Therefore we see 2012 as a year of effectiveness. We see online agencies investing their time and effort on improving their services in order to deliver added value monitoring. Better social media data is also becoming more available.
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13
Slovenia
1.3M internet users

Slovenia, an exceptionally mountainous country in the CEE region, did not face major changes on the internet landscape in 2011. The three biggest media groups CME, Telekom and Styria Media Austria control the market with various websites from their portfolios located in different positions in the top 10 ranking. Still, 2011 was for Slovenia a year of many new innovative ideas and advertising models. The most important new approach brought to the market the iGRP model, deriving from TV metric language created an opportunity for various companies from the FMCG and OTC sector to understand the concept of online advertising better, which resulted in higher investments from their side.
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Do you CEE? 2011
Table 1. Top 10 websites in Slovenia by reach level (MOSS-SOZ - Valicon/Gemius, December 2011). Only the audited websites are presented in the ranking.
Market Overview
The Slovenian top 10 ranking is dominated by horizontal portals the biggest websites belonging to this category occupy the four top places on the list.
The most popular portal, 24ur.com the website providing a wide variety of current news, spanning from recent events and politics, through sports to entertainment belongs to Pro Plus d.o.o., the Slovenian member of CME (Central European Media Enterprises).
together with other portals from its portfolio. This campaign was one of the reasons why, in 2011, an even larger share of the Slovenian internet audience was attracted to 24ur.com, and this website improved its lead over the main market competitors Siol, Najdi and RTVSlo. In comparison with December 2010 24ur expanded its reach by 1pp, gaining over 47 thousand additional Real Users. 24ur.com has tried to focus more recently on multimedia content, which has made the presentation of the current news more engaging for the online audience. Pro Plus, apart from its broad scope of activities in the TV sector, also has a wide portfolio of websites and several of them zadovoljna.si, vizita.si and moskisvet.com - were among the top 10 most popular websites in December 2011. Mokisvet (Mens world), a website targeting male internet users, while offering assorted information about sports, technology, motorization and lifestyle, can perceive 2011 as a successful year due to improving its position among the most popular websites in Slovenia by three places and consequently entering the top 10 ranking. Mokisvet attracted more than 40 thousand additional Real Users in December 2011 in comparison with December 2010, which corresponds to a 5.7pp increase in reach on the Slovenian
Pro Plus also has a broad portfolio of TV stations: POP TV, Kanal A, and online TV on demand Voyo. Due to the recent crisis, the major market players advertising budgets have shrunk significantly and this gave Pro Plus the opportunity to advertise its flagship news portal, 24ur.com, uniquely on TV,
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internet. The other portal with a similar profile as Mokisvet Zadovoljna, concentrating on female Slovenian users strengthened its market position and concluded the year in 6th place in the top 10. Siol.net, a news portal belonging to Telekom Group, is the second most important player on the Slovenian market. In 2011, Siol managed to keep internet users for longer in front of their PCs or mobile device screens while browsing their web page than they did last year. The average time spent by Slovenians on this news platform increased over the course of 12 months by more than half an hour and reached 3 hours and 30 minutes per user in December 2011. Telekom Group also owns two other major market players who were among the 10 most popular websites in Slovenia najdi.si (local search engine and a horizontal portal) and telephone register itis.si. Najdi is doing impressively well on the market considering the global dominance of the Google search engine. The website enables one to search within certain categories, such as news, video, dictionaries, and to personalize this search by registering as a user. It is also possible to send a free text message via this platform. In 2011 a more location-based search was introduced to najdi.si by integrating Slovenian maps into the search engine. Furthermore, the use of price comparison search engine ceneje.si in the subsection of Najdi dedicated to shopping Nakupi enables the web users to find the best deals on the Slovenian internet. Rtvslo.si a horizontal portal owned by the national TV and radio station defended its fourth place on the market and closed 2011 reaching 35.5% of Slovenian web users. In March 2011 this website even managed to overtake najdi.si and achieved the best result in its history, occupying third place in the Slovenian top 10 ranking and having 495.5 thousand Real Users. Rtvslo is a more independent source of current national and world news than the two other leading portals on the Slovenian market 24ur.com and siol.net as it has its own network of journalists and all the content that is presented on the website is originally prepared by them. Styria Media Austria is a third media group, after the CME Group and the Telekom Group, with a significant market share in Slovenia and a broad portfolio of various websites. Two of them - bolha.com and zurnal24.si - consolidated their market position from the previous year and stayed in the top 10 ranking. Bolha.com a classified ads and auctions portal kept its fifth place from December 2010 and only slightly decreased its reach. Zurnal24.si, on the other hand, dropped one place in the top 10 websites ranking, losing almost
Do you CEE? 2011
17 thousand Real Users in comparison with December 2010. Zurnal24 also has an online free newspaper edition which ranks highest among all the Slovenian newspapers.
Market Highlights
In 2011 websites targeted at male internet users (moski.si and moskisvet.si) and at female (zadovolijna.si and zenska.si) were steadily attracting more and more attention from Slovenian users. Especially moski.si and zenska.si, which both began 2011 rather weakly (with Moki having 332.5 thousand and enska - 703.3 thousand page views in January 2011) and managed to expand greatly and engage visitors to a higher extent. They both concluded the year with 2M more generated page views than they achieved in January 2011 for each site. Both portals are owned by VSN New Media Network d.o.o. and have a similar format, slightly adjusted to meet the needs of the given gender.
Nevertheless, the leaders on the market of the specialised female and male online platforms are moskisvet.com and zadovoljna.si. They both belong to Pro Plus d.o.o. and are far ahead of their direct competitors. In December 2011 the users of both websites generated around 6.3M of page views.
Among all these specialised male and female portals, the user base of zenska.si is expanding the most dynamically over the course of 12 months (from January 2011 till December 2011) the number of Real Users increased by 75%. Slovenian gemiusAudience data gives some further interesting insights into the online audience of specialised male and female portals. Contrary to expectations, Slovenian males are only visibly prevalent on moski.si where they constitute 66.5% of this websites audience. On the other three sites the audience is much more balanced for instance zadovoljna.si is visited by 49.5% male users, despite the fact that the content presented on the website is dedicated to issues that could be of relevance to women. Therefore, it seems that specialised male and female platforms are also visited by representatives of the other gender, who probably want to find out more about their life partners from such sources of information.
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Men's and women's sites in Slovenia
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Chart 1. Number of page views on most popular websites targeted to men (moski.si, moskiswet.com) and women (zadovoljna.si, zenska.si) (MOSS-SOZ - Valicon/Gemius, January 2011 - December 2011)
When it comes to novelties in the field of online advertising, the biggest change in 2011 concerned ad formats. Video ads are becoming more popular, mostly due to the fact that they are catching users attention and tend to prove higher CTR rates than other formats. What is more, larger formats, such as full screen wallpapers, started to dominate the online ad market which gave creative ad agencies the opportunity to show their innovativeness and increase their market share. Publishers such as 24ur.com, bibalaze.si, vizita.si, cekin. si, and many others, also saw the opportunity to increase their revenue from advertising budgets and encouraged the advertisers to create an eye-catching website background in order to promote their products better. Furthermore, the iGRP model, based on the TV metrics approach, started to gain in popularity among Slovenian publishers, advertisers and companies. This method provides the means to understand the concept of online advertising more thoroughly and review the effectiveness of online ads from the traditional advertising perspective, concentrating predominantly on audience reach and the average time spent on a particular platform. Such changes in the pricing and effectiveness measurement have already attracted online investment from many new Slovenian FMCG and OTC industry players, who have never advertised on the web before.
Many sites began to monetize their content in 2011, and this phenomenon is especially characteristic of smaller, more specialised, news portals. There are two approaches to earning money from content delivered to web users either through a double recall option when the internet user has to re-type certain words (commercial) into the provided box to open a specific limited content or through a pay -wall introduced on the Slovenian market by the Slovakian company, Piano Media. This option consists of providing access to a broad scope of national websites by paying one modest subscription fee per month. Various Slovenian websites, i.a. Delo (national daily newspaper), Dnevnik (national daily newspaper), Slovenske Novice (national daily newspaper) and Primorske Novice (the most popular daily regional newspaper), have all decided to follow this limited content model and have joined the Piano network of Slovenian publishers.
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Do you CEE? 2011
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Keeping with the general trends visible across the CEE region, male web users are overrepresented on the Slovenian internet and constitute 53% of the Slovenian online audience. They were also responsible for a higher level of online engagement compared to female users having spent, on average, nearly 4 and a half hours longer online per month in December 2011. Users younger than 24 years old constitute the largest part of the Slovenian online audience nearly 27.5%. On the other hand, the highest amount of time spent online and the most significant number of page views generated was achieved by members of the 25-34 age range.
Do you CEE? 2011
A large part of the Slovenian online audience is still at school 26.21%. Moreover, when education is taken into consideration, it was those who had completed elementary school, or who have lower educational achievements, that spent the highest amount of time online in December 2011 (nearly 15 hours per user). People living in small settlements of less than 500 inhabitants seem to constitute a significant part of Slovenias internet audience nearly 16.5% of the total audience comes from small towns or villages. These people also browse the internet the most eagerly, generating on average 557 page views per user in December 2011.
Marko Vonina Sales Executive Pro Plus

Last year was a year of many innovative ideas and new advertising models. The iGRP model was the most significant new approach. It offered TV advertisers a chance to understand the internet through TV metric language. That was the reason why we saw a big premiere for many FMCGs and OTCs who had never advertised online before. The Slovenian online advertising market seems not to be large enough to be attractive for the big global players. This seems to be good news for local players who show high innovativeness and a constantly flexible approach. 2012 should see a continuation of last years activities. All players starting from advertiser, creative agency, media buyer, right up to the publishers, will surely be more aware that they have to work together in order to get the best and most out of online. In 2011, many sites started to monetize their content. Some of them, mostly the specialized ones integrated advertisers content within their own. Most online daily news sites implemented a paywall for their main content.
In the middle of the year, a media consumption survey revealed that more than 40% of online users simultaneously use TV and internet on a daily basis. That piece of news has encouraged many advertisers and publishers to use it in their advertising activities.
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Do you CEE? 2011
Zoran Savin President of the Executive Committee MOSS
the influence of foreign media (especially in taking a big portion of advertising budgets). What will 2012 bring? I think that next year will be a year of monetization on the Slovenian market. At this point probably everybody in the industry realizes that advertising cannot be the only source of money for online content and services. Other methods are, therefore, appearing and will appear, as media owners search for them.
In 2011 the Slovenian market became, more and more, an arena for a head to head race between PopTV and Telekom group. Fierce competition between the two major players, meant a somewhat difficult recent period for the market, but I expect that this trend to change as both players see the big potential in online media and services and have opportunities to make various leaps in ideas and approaches. On top of that, other media houses (Styria, Delo, Dnevnik, ) are expressing a strong will to reclaim what is theirs in this online race. Hopefully, this will even give some backing to a vibrant Slovenian startup marketplace, which is growing day by day.
It is important to stress that Slovenia has always been, and probably always will be, a fairly closed market, where various broader industry influences perhaps have less impact then in other markets. Nevertheless, certain media, like Google and Facebook, have impacted the industry in different ways.
As said before, the impact, may not be as hard as in other markets, but is nevertheless leading the way in budget distribution. How the market, especially the biggest players, reacts to this remains to be seen. Especially now, where it is beginning to affect the whole industry, not just the online part of it. The market is still encountering some obstacles in its development. Some will say, that this predominance of big media players is giving more food for thought to people who did not invest when the ocean was still blue. It remains to be seen, how the opening of the ex-Yugoslavian markets will affect the market. But in my opinion there are other, bigger, challenges to overcome, ranging from advertising propositions, the willingness of advertisers to try to understand the effects of their campaigns, and overcoming
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Turkey

The online market in Turkey is larger than all pure CEE markets put together (Russia not considered). The Turkish online population reaches a number equal to half of the population of Russian web users but it is characterized by rather slow growth (only 4% year on year). 2011 on the Turkish market was most of all marked by a great tragedy the October earthquake which also paradoxically has become indubitable proof of the increasingly important role that social media, especially Twitter, plays in the everyday lives of Turkish web users. 2011 in the online reality brought several important acquisitions, the increasing popularity of video content websites and e-commerce, the dynamic spreading of mobile internet usage among users, as well as reshuffles on the web tools landscape.
turkey
Do you CEE? 2011
Table 1. Top 10 websites in Turkey by reach level (Gemius / Ipsos KMG: IAB Turkeys Internet Audience Measurement, December 2011). The table ranking features scripted sites only.
The ranking of the top 10 major players by reach on the Turkish market features as many as 4 portals presenting general information and news. The one that is most popular, the no. 1 in the ranking, is mynet.com, a horizontal portal, which, with almost 9.5M real users and almost 40% reach, took over the leadership in December 2011. This site, operating on a horizontal platform model, holds its position strongly and only a slight drop in reach (1.3%) was witnessed as compared to the respective period in 2010. Mynet.com is run by the company of the same name, established in 1999 by Emre Kurttepeli. Mynet.com is followed by blogcu.com, a local blogging platform, created by Nokta, a company established in 2002, operating in Turkey as well as in the United States. It specializes in search services and search-based advertising solutions. Web 2.0 projects are its latest area of business. The top three of the most popular sites closes with dailymotion.com.tr, a local version of the popular video content portal, established in 2005, in Paris, France and considered an answer to the popularity of YouTube. Mentioning this video content mogul it is easy to move on to number four in the ranking which is held by izlesene.com, a unique site also featuring multimedia content, owned by the abovementioned Nokta.
This site both operates, as well as looks like, the most popular video site in the world and most of its success was built on the tremendous market gap that resulted from the banning of YouTube in Turkey. Number five in the ranking, sahibinden.com is a online classified site, created in 2000, by Taner Aksoy. The site prides itself on the fact that every minute 2 cars are sold or 1 real estate is sold or rented by its agency and claims to be the most frequently visited ad and e-commerce platform in Turkey with more than 170 employees and more than 3M ads.
Sahibinden.com, despite its 5th position in the ranking in terms of reach, is the clear leader as far as the activity of web users is concerned. In December 2011, it registered about 3M more page views than the leader of the reach ranking, mynet.com.
Moreover, its average number of page views was over one and an half times that of the leader (317 vs. 188).
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Sahibinden.com is followed by two news portals, milliyet.com.tr and hurriyet.com.tr, of about the same popularity (26.5% and 26% reach) and located in 6th and 7th places. Right behind these two, there is domainhaber. com, a thematic portal, presenting news related to computer hardware (including a ranking prepared according to the opinions of the users), software and games. The site features tests of the presented products as well as a forum. In ninth place in the ranking, an online auction site, gittigidiyor.com (which in Turkish literally means going gone) may be found. The site was founded by Serkan Boranili, Burak Divanliolu and Tolga Stone, and uses a mechanism which permits buyers to shop without taking any risk, thanks to a right to test a product for three days. A wide range of products is featured at gittigidiyor. com from PCs to video games, mobile phones to clothing, jewelry to cameras. Furthermore, collectables from such areas as numismatics, philately, as well as prayer beads, books etc. are also sold on this service. April 2011 has seen the continuation of Gittigidiyors acquisition by the global e-commerce giant, eBay. This investment was a follow-up to buying a minority stake in the company in 2007. Following the conclusion of the 2011 deal, eBay owns a decisive 93% of the local e-commerce entity. The classification of the 10 most popular websites on the Turkish internet is concluded by haberturk.com, the last news site from the top 10 classification. The site is a part of Haberturk news group, which also includes a newspaper, television and radio channels among its services. The range of the information presented on the site spans from strictly gossip news to those from the economy, arts and culture, health and technology industry.
Do you CEE? 2011
devastated the Van province in eastern Turkey. A number of aid requests (for food, drugs, shelters etc.) from the affected area were registered. One remarkable true story of two teenage boys, trapped under the rubble, saved only thanks to their tweeting for help (thus making use of Twitters location feature which permits pinpointing of the exact location of the user), was reported by most media channels all over the world and became dramatic, yet credible, proof of the widespread popularity of social media in Turkey.
Moving on to the local online market in 2011, one of the main events was definitely the acquisition of the locally originated private shopping site, Markafoni, by Allegro-MIH, a subsidiary of the global giant Naspers.
Markafoni, accepting its members by invitation, offers sales reaching 90 percent in high-end brands from the categories of accessories, cosmetics, decoration and clothing to its clients. The discussed acquisition of 70 percent share of the third biggest e-commerce company in Turkey has also revealed the estimated value of this key local player 200M dollars. This event, widely commented upon not only on the Turkish market, is expected to move the local e-commerce sector to a higher level as well as help Markafoni in becoming a global brand as it has already been operating in Ukraine, Australia and Greece. Due to the transaction, concluded in July 2011, Allegro-MIH acquired Markafonis operations in Turkey (3.5M registered members) and Ukraine in addition to Zizigo, the largest online shoe retailer in Turkey. Last but definitely not least, it is worth taking a look at some features of the Turkish internet users preferences as regards tools used. This market seems to be catching up with most of the pure CEE as far as preferences in terms of web browsers are concerned. The unthreatened dominating position of the preferred browser of Turkish internet users, Microsofts Internet Explorer, began to diminish in 2011, only to give way to Googles Chrome, the share of which has been gradually increasing since the beginning of 2009. The most visible bumps took place at the end of 2010, when the share of MSIE fell below 70% (a level which the Microsoft product maintained easily during the previous years), at the end of
Market Highlights
2011 proved to be a captivating year for all those interested in the development of the Turkish online reality, not only in terms of the decisive moves of the key market players but also in terms of users preferences, as far as tools used are concerned. The visible and increasing popularity of video content sites is one of the key themes of the past year on the Turkish internet, as well as the dynamically growing importance of the global social networking sites Facebook and Twitter. These two have experienced an immense boost in usage, especially following the tragic events of October 2011, when a disastrous earthquake
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Web browsers in Turkey
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March 2011. This is when Chrome took second place from Mozillas Firefox, thus not only following the CEE-dominating trend, but also the global trend registered in 2011. Chromes growth, present on the market since 2009, has accelerated, as in the worldwide arena thanks to the frequent update schedule and lightweight browser itself. The overtaking of the hitherto leader, MSIE, is expected to happen in Q2 2012. As regards the ranking of Turkish mobile producers as far as website-averaged percentage share of page views performed on the market is concerned, Apple is gaining ground while Nokia is being pushed down. Only in the first quarter of 2011 did both of these producers enjoy almost the same share, amounting to 42% (Nokia) and 40% (Apple), while already at the end of that year, in Q4 2011, the gap between the two producers was as big as 19% and over (Apple - 45.8%, Nokia 26.7%). The black horse in these races proves to be Samsung, which has visibly gained most of Nokias share, and in the period December 2010 December 2011 its share grew from 8.1% to 13.8%. If this trend is maintained in 2012, it is more than probable that Samsung will gain second place in the Turkish mobile producers ranking with ease.
Just a glimpse on the socio-demographical data describing the Turkish online landscape proves that it is in a rather young, yet gradually developing stage. One proof for this thesis may be the distribution of genders in the web users population which still shows a strict predominance of men 56.5% reach. This situation has slightly changed since December 2010 as the share of women online has since then increased by 0.6pp. Still, men spend more total time online than women, in December 2011 by over 3.5 hours. The other justification for this state of affairs may stem from the cultural specificities of the discussed market. The thesis concerning the youth of the Turkish internet market is further confirmed by the December 2011 Gemius / Ipsos KMG: IAB Turkeys Internet Audience Measurements results concerning age of web users. As they prove, as much as over 70% of all internet users in Turkey are below 35 years old. Thus, one can argue that Turkey does not yet experience the ageing of the Web phenomenon which is omnipresent on the highly developed online markets of e.g. Western Europe. There, the usage of the internet ceases to be the area of active functioning of young people only, but rather it is also eagerly entered by the members of the older age groups.
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Nevertheless, when it comes to the average monthly number of page views generated and average monthly time spent the persons from the age group 45-54 years of age in December 2011 have performed very impressive number of 713 page views and spent online 11 hours 50 minutes (to compare - the results of the 15-24 y.o. age group: 844 and 11:45). The total internet users population in Turkey is most generally divided into three major groups: with primary education level or less (30%), secondary school education (25%) and high school education or over (45%). Still, it needs to be noted that almost one-third of the total online population has primary education at best while the share of persons with university education or higher is at the level of 14.2%. At the same time, users with higher education, spend online more average time
Do you CEE? 2011
per user than any other age group (14 hours 12 minutes, more than twice the time of those with primary education or less) and generate a bigger average monthly number of page views per user than members of any other group (as much as 889 while users with primary education or less perform 417 of them). As the December 2011 Gemius / Ipsos KMG: IAB Turkeys Internet Audience Measurement results prove, the majority of internet users (72.8%) live in urban areas a distribution which is consistent with the general pattern for the whole population. The users from the urban areas perform also a bigger number of monthly page views per person and spend more average time online.
Neslihan Mesutoglu General Manager Sales of Advertising Digital Media & Radio TURKUVAZ REKLAM PAZARLAMA DANIMANLIK A..
content, and loyal users, offer a high quality inventory for the image building campaigns within their site portfolio.
Turkey, as a country lying both in Europe and Asia, has great potential to be a digital hub in its area, familiar as it is with both eastern and western cultures and habits. The Turkish digital market has kept growing steadily in 2011, both in advertising and digital media spending. The advertising investment growth is 37%, one of the best growths in the EMEA market. The social media, video advertising and the rising e-commerce field helps the market to give a good growth ratio. The search market is also strong in Turkey due to e-commerce and small and medium enterprises (SME). The investment they have done in AdWords campaigns has a very good ROI. Furthermore, display is growing thanks to the larger number of image and branding campaigns present online. Thus, the publishers with their strong editorial investments, premium
2011 was the year of group shopping, which has registered more than 10 billion Euro in revenue. The growth of this sector amounted to as much as 57% in comparison with the previous year. Social media also witnessed an incremental development in the last year. 35M Facebook users in Turkey added to the omnipresent trend of opening companies Facebook profiles and gaining fans.
2012 in the social media will be the year of engagement with brands and companies followers within Facebook profiles. I believe that different strategies to activate these fans will be used which will give the industry new potential for growth. Twitter, Instagram, Pinterest and other social media still remain a new phenomenon for the Turkish user and this fact will drive the markets growth in this respect too. The share of young people in the online population on the Turkish market is the most important difference from that in the CEE markets. 37 million people in the country are under 30 years of age. At the same time, the education system is
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being digitalized by the Turkish government. The first step will be to introduce 10 million tablets for students by 2016. The whole initiative is intended to make future users spend more time using digital media and the latest mobile devices. As for the local players which are proving to be very successful, there is Markafoni, with its new investment in Greece, Ukraine, and Korea. Furthermore, at the beginning of 2011 a minority stake in Ciceksepeti was acquired by Amazon, and E-bay has bought 93% of giitigidiyor.com. Trendyol, a private shopping company, registered 100 million USD investment of venture capital and there are other companies which have been capitalized by foreign investment companies. Last but not least, mobile and video advertising seems to be one of the growing stars in the market. Social media will need wider engagement from the publishers side to get strong on branding campaigns. This is all due to the fact that the premium content and the copyrighted content is getting more important for the advertisers.
Do you CEE? 2011
Currently almost half of the Turkish population is connected to the Web, although broadband access is below the average for European countries. According to IAB Turkey Internet Audience Measurement Research for April 2012, the internet penetration rate over the age 12 is already 42.7% and the total number of internet population above 12 years old is 25,371,409M. Turkish online users are very young. Out of the over 25M users mentioned previously, nearly 19M are under the age of 34. This makes Turkey a unique country in terms of consuming both digital and new technologies. Social media is very popular and, based on insights from Socialbakers, Turkey is Facebooks country no. 5 globally, with the number of users exceeding 30M. Turkish internet users are also very active on other services such as Friendfeed the countrys no. 1 and Twitter the countrys no. 8 in terms of the number of users globally, based on Webrazzi insights. The worldwide sale of smart phones increased by 63% in 2011 and tablets by 260%, which is a real record-breaking number. In Turkey penetration rates are still low, especially for tablets, but, as Turkish consumers are keen to consume new technologies, its realistic to expect that mobile devices will expand dramatically in the near future. As a result, development of mobile applications and dedicated content will be one of the major trends on the publishers market. Consequently, advertisers should also discover the potential of the mobile Web. Another aspect is video. On average, Turkish people spend almost 40 hours per week watching television. This tendency is changing in favour of online video. For instance, according to IAB Turkey Internet Audience Measurement, the percentage of those aged 15-34 who watch Web TV was 74.41% in November 2011. Intellectual property and online piracy will definitely be a major issue in the coming years. In order to cut off the financial support that keeps rogue sites which steal copyrighted material and sell counterfeit goods alive, serious measures are likely to be developed and antipiracy policies adopted, both on an industry and state level.
Aygen Tezcan Coordinator IAB Turkey
Turkey, with a growth rate of 8.5% in 2011, was the second most developing economy in the world after China, at a time when many of the neighboring countries in the Middle East and Europe were struggling with political turmoil and bail-outs. On the other hand, the advertising industry has outperformed the economy and ended 2011 with a growth rate of 20% compared to 2010.
The most appealing development took place in the digital industry. According to local AdEx results from IAB Turkey, total adspends reached 721M TRY (308.4M EUR, net value), and the reach of the internet both fixed and mobile has also expanded dramatically.
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Ukraine

Ukraine, being one of the largest CEE markets in terms of overall population, is currently experiencing a huge growth in the number of internet users, despite the remaining underinvestment in online advertising. If more funding was to be brought into the market, the last and the coming year, with such rapid industry development, could have been the best moment for the investors to notice the potential of the market. However, the Ukrainian online sector is largely dominated by Russian enterprises such as Mail.ru, Yandex and VK.
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Do you CEE? 2011
Table 1 Top 10 websites in Ukraine by reach level (gemiusAudience, December 2011). The ranking includes both audited and nonaudited websites: for non-audited websites page views and times are not available.
Ukraine, being the second pure CEE market in terms of total population, had remained very underdeveloped online until a few years ago when its user base started to expand very rapidly. Given this pace of growth and population size, Ukraine is a land of promise for online marketers. The first place in the ranking of the most popular sites in Ukraine is occupied by the global search engine google.com, reaching 71.5% of local internet users in December 2011. The leading position of this player is definitely not endangered in the coming year, as in the last month of 2011 this website attracted approximately 1.4M more Real Users than the market follower mail.ru. Similar to other countries of the former Commonwealth of Independent States, websites of Russian origin have a very strong position in Ukraine. Among the regional players, three Russian giants: Mail.ru, Yandex and VK are the most important on the Ukrainian market. It seems relevant to note that here, on the Black Sea coast, the order amidst the most popular market players is reversed and, unlike in Russia, mail.ru site is the ranking leader, and the Russian leader Yandex follows closely with its Ukrainian domain. However, it has not always been so and the supremacy would have been interchanged every now and then between those two major players all the
time since summer 2010, according to gemiusAudience data. The leading position of Mail.ru among the regional players in Ukraine has now only been stable since October 2011, but the number of page views generated on this horizontal portal has been experiencing a relatively firm rise since then. Vk.com is a regional player leading in the social networking sector on the Ukrainian internet. This exceptional performance of a local, or rather regional website concentrating on socializing and networking is quite unique and in 2011 did not occur on a lot of CEE markets. Vk.com reached more than 60% of the Ukrainian internet users in December 2011. YouTube, Googles global video content site, concluded 2011 in fifth place in the top 10 ranking with a reach level slightly lower than 50%. The situation on other CEE markets (Poland, Hungary), where YouTube has currently a much stronger position, shows that there is still a huge potential for growth in Ukraine for this video content site. This forecast could be further corroborated by the fact that YouTube is the only video content site present in the top 10 ranking in Ukraine. In December 2011 6th and 7th position in the top 10 were occupied by two websites also performing very well globally
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online encyclopedia wikipedia.org and social media mogul Facebook. Both these sites had a comparable reach in Ukraine in December 2011 and attracted then more than 4.7M Real Users. Despite the fact that the popularity of Facebook among Ukrainians is steadily increasing, there is still a huge gap between Mark Zuckerbergs social platform and the regional favourite vk.com. Thus, it should take at least a couple of years till both these services will have a comparable position in Ukraine, taking into account the current growth rate of Facebook on this market. Odnoklassniki.ua is not as successful as the three other sites audited by gemiusAudience, the regional leaders mail.ru, yandex.ua and vk.com in terms of Real Users and reach, but it noticeably registers the highest number of page views and time spent per average user of the Ukrainian internet. Similarly, as in neighbouring Russia and Belarus, this social networking site is therefore associated with very high user
Do you CEE? 2011
engagement. What is more, the number of page views generated on this portal is rising much more quickly (over 40pp rise between September and December 2011) than its number of Real Users. Odnoklassniki, similarly to Yandex, recognized the market specificity and, as a consequence, changed the top-level domain of their services to .ua.
The popularity of social networking sites on the Ukrainian internet is quite exceptional. Behind the regional leaders vk.com and odnoklassniki.com and the global social media giant Facebook there was still place in the top 10 ranking for the fourth website belonging to this category fotostrana.ru.
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Fotostrana.ru has a slightly different profile than the other three market players from the sector and probably this is the reason why it attracts the attention of the Ukrainians online. This social service tries to differentiate itself from the other market offerings in the sector by being more entertaining. After creating their own personal profile, users have there the opportunity to choose their online pet which will accompany them during future visits, and this can also be done from mobile devices. Moreover, Fotostrana connects people that do not know each other in reality and could be used by its users as a dating site. People visiting this service have the opportunity to chat to strangers online, and to make new friends by commenting on and rating others pictures. There is also a gaming platform integrated on this site. Ukr.net, a horizontal portal, which aggregates links to the interesting content across the Ukrainian internet, closes the ranking of the top 10 most visited websites in December 2011. In the last month of 2011 Ukr.net reached every 4th Ukrainian web user which corresponded with nearly 3.5M Real Users. This website facilitates the life of Ukrainians searching for recent news from a specific category, since all the content published on Ukrainian websites is assigned here to a particular thematic group (politics, business, entertainment, cars, etc.). As a consequence, it is very easy to find news of interest. Besides this, the website also offers an email service, virtual USB flash drive, online classifieds, video streaming and dating services.
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Apparently, last year Ukrainian internet users began to perceive the web more as a source of advice on offline matters. Taking a look at the chart makes clear that the website categories which grew most rapidly in 2011 were Health & Medicine, Women, Entertainment & Leisure. Some fluctuations set aside, those groups experienced respectively 125, 69, 66 percentage growth in just one year. The website which grew the most in the first category was eurolab.ua, a medical portal (a mere 6 thousand Real Users in December 2010, a surprising half a million a year later). Some categories did not grow as much as expected: with the UEFA European Football Championship Euro 2012 getting closer each month, nevertheless, according to gemiusAudience study, sites concerning football like football.24tv.ua, football.ua, profootball.com.ua, ua-football.com did not get significantly more attention from the Ukrainian internet audience in 2011. There was, however, still half a year left to the event and during this time more traffic was drawn to those sites. As for online technology and the subject of internet browsers, another surprise here Ukraine is one of two countries in CEE (together with Belarus), which prefer the Scandinavian browser Opera. However, the distance between Opera and its competitors is not huge. In the last year, Opera remained in a stable position, but Firefox was losing its share against Googles Chrome, which is rapidly conquering the market similarly to other CEE countries. It is very likely that 2012 will bring Chrome to second place behind Opera. In Ukraine, less than 5% of all page views were generated with the use of mobile devices in 2011. The leading producer of the Ukrainian market was in 2011 Nokia, but its share in total mobile page views was falling fast throughout the year, while Apples share was constantly rising. Spring 2012 brought an exchange of ranks between the two market leaders. Last year also saw the slow rise of two other producers: Samsung and HTC, with Sony Ericsson going down in this market. Similar to Belarus and Russia, Ukraine is still a dominium of Windows XP, but its share is going down and it is clearly going to be replaced by Windows 7 in the second half of 2012. Last but not least, 2011 was a year when interesting innovative ideas came into being in Ukraine and soon afterwards gained significant international exposure. Two projects should be mentioned here especially. Runfaces is a Ukrainian startup combining the functions of video communication tools and social networking platforms on one site. The users, after an easy registration process, are expected to declare what their interests are and directly afterwards they can meet new friends online and start contacting them via video chats. The website,
Market Highlights
In 2011 Ukraine experienced the highest growth of online audience among all CEE countries. Given the population universe of over 14, the rise amounted to 2.4M Real Users, or approximately 17.5% from December 2010 to December 2011. The market is growing rapidly, however the funds invested in it are still rather small. Taking into account the online advertising spending of 2010, it can be easily noticed that despite the country size and overall population, it is smaller than in Slovakia. Also the online adspends per user indicator leaves Ukraine in the group of underdeveloped countries. Hopefully the growth of online population will bring some more money into the market in 2012.
Some website categories benefited from the market development more than others. Which ones? The answer: lifestyle.
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within just a few days, managed to gather 10 thousand new registrations and it soon went viral on the internet on a global scale. The web users, especially in United States, were so eagerly exploring the new possibilities to socialize provided by Runfaces that the website even crashed at some point due to extremely heavy traffic. The other interesting initiative from Ukraine is KitApps an application for mobile phones and tablets facilitating the process of event & conference management and other business processes. This service gives its users the opportunity to create a tailor-made application which will be subsequently developed and published in the AppStore within 7 days. There are various templates available on the website of KitApps which makes the process of building the app easy and enjoyable.
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disadvantage of the last and largest group inhabitants of the big urban centres. A look at the Kiev region shows clearly that the capital city of Ukraine is rapidly losing its dominance (by 18pp in one year). Also, the users from Kiev and the capital region tend to spend less time on browsing the World Wide Web. All the above mentioned trends indicate that the online population of Ukraine is maturing. It is no longer the domain of young, well-educated users from big cities, but its structure gets more and more representative and similar to the total structure of Ukrainian society.
The gender imbalance of the Ukrainian internet audience is diminishing. Whereas in December 2010 men accounted for more than 51% of internet users, currently the distribution is almost even. When average time per user is concerned, women tend to be more active (16 hours per month on audited sites) than men (14 hours 12 minutes). Young people (aged 14-24) currently constitute a smaller percentage than they did a year ago (by 2pp). Groups which in turn grew stronger are the 25-44 age group and seniors (>55 and over). These groups also spend the most time online and altogether generate over 60% of the page views, with 25-34 year olds surfing the web for 16.5 hours monthly on average. Comparing the share of highly-educated users to the previous year, it has fallen visibly (by 3pp), as has the share of those lacking formal education (by over 2pp). Half of the Ukrainian online audience is therefore made up of people with secondary, vocational or incomplete higher education. This group also generates over half of page views and spends more time on the internet than other groups (16.5 h vs 13.5 h monthly average). In Ukraine, users coming from the countryside now constitute a bigger part of the population (12.6% in 2011, 7.8% in 2010). A relevant change is also visible in the case of the share belonging to small and middle-size urban entities (altogether 41.8% of the Ukrainian audience) compared to 33.3% just a year earlier. All these changes are, of course, to the
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and Western Europe, does not have monopolies on its internet market. Google faces competition from Yandex here, and, as for social networking websites, VKontakte and Odnoklassniki leave Facebook behind. Ukraines internet market is unique due to its linguistic diversity. A part of the countrys population is Ukrainian- speaking, while the other part speaks Russian, so market players take care to localize their products. International websites, first and foremost American and Russian players, enjoy the widest reach in Ukraine. Google and Yandex dominate the search market, while Facebook, VKontakte and Odnoklassniki are the most popular social networking websites. One of the few market segments where the leadership belongs to a local player is online shopping. The online store Rozetka.ua has a very strong position on this market. 2012 will certainly prove itself to be the year of Euro 2012. For many companies, the European Football Championship is a chance to show themselves on the internet market, and they will try to use this opportunity. We are bound to see interesting solutions in online communication during the championship. Already last year, the quality of Ukrainian Social Media Marketing (SMM) improved and some really successful projects appeared on the local market. In the coming years, more companies will seek to establish their presence on social networking sites and they will demand better service in this area. All in all, it needs to be noted that the Ukrainian market continues to grow at a fast rate, while internet penetration in the country is only approaching 40%, so the potential is still huge.
Vitaliy Gorduz Head of Internet Division at United Media Holding UMH-KPMedia
The key point of 2011 was the consolidation of the largest market participants in one DigiMedia sales house. Furthermore, advertisers increased their budgets for the internet industry. With the creation of new sales houses and regional offices for Mail.ru and Yandex in Ukraine becoming even more active, we can talk about the beginning of market consolidation and can say that the internet took its place in the media mix in 2011. Ukraine remains between two large markets. Coming from the East are Yandex, Odnoklassniki, VKontakte etc. and from the West, Google and Facebook, with these two groups of players putting up a fight in the social network and search segments. Nevertheless, there are some local players which successfully compete with the global giants, such as, for example, Ukrainian Media Holding. In my opinion, 2012 will definitely be remembered as a year of special projects, significant growth, and new rules for market participants due to the consolidation process.
Sergey Petrenko CEO Yandex Ukraine
Ukraines internet audience has increased more than 20% within a year, totalling almost 14M, according to gemiusAudience. Also, more money is being spent on advertising per web user. Ukraines online advertising market has grown by 57pp compared with 2010, reaching 440M Hryvnias, according to the All-Ukrainian Advertising Coalition. The country, like most CIS countries and unlike Central
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Data Sources
The general market overview provided in the report is based upon data acquired by the gemiusAudience study. Reach rankings of the top ten websites included in this study are presented for each country. Additional statistics from the gemiusAudience study were used in order to further enrich the information in the rankings.
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The only exception from this approach is Romania, where the ranking and further additional statistics are presented based on the SATI data provided by BRAT Traffic and Audience measurement.
Table 1. Methodological overview source of data, number of websites included in the study, age groups per country
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Another type of data presented in the report originates from gemiusTraffic. This data was used for the chapter covering the usage of the mobile internet in Central and Eastern Europe. Moreover, the gemiusTraffic study was used in several chapters focusing on specific countries in the region (Belarus, Croatia, Turkey, and Ukraine) in order to outline the situation on the web browsers market, and in the Bulgarian chapter for the overview of the situation on the mobile devices market. Data for web browsers and operating systems of low popularity aggregated in groups consisting of all versions of a particular browser or operating system. In order to analyse the behavioural patterns of internet users using mobile internet (chapter Mobile internet) the total number of page views generated from mobile and traditional devices was calculated. Subsequently, the hourly shares of the total daily amount of page views were estimated. This approach was implemented for each day from the week 5-11 December 2011, and afterwards the weekly average of the share of page views generated from a particular type of internet connection per given hour (mobile vs. traditional devices PCs, laptops) was extracted. The description of each market was enriched with the experience and knowledge of Gemius local representatives present in each of the countries included in the report. The Opinions from the market section, which contains forecasts concerning the future of the internet in the countries researched, consists of direct citations of the opinions expressed by local market experts. Data on the overall number of internet users presented at the beginning of each country chapter has been collected for December 2011, concentrating on the age groups which exist in the gemiusAudience study (see Table 1). The number of internet users shown in the Regional comparison chapter provides the data for the age groups of 15+ (where possible) in order to make the data more comparable. Further references, including the specific source of used data, can be found below all the tables and charts presented in the report.
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measurement to provide media sellers, planners, and buyers with online media planning data. The data is provided once per month, reported on a weekly or monthly basis. gemiusAudience study is conducted on several CEE markets under the official name of NetMonitor in the Czech Republic, gemius/Ipsos Audience in Hungary, Megapanel PBI/Gemius in Poland, AIMmonitor in Slovakia, MOSS in Slovenia and Gemius / Ipsos KMG: IAB Turkeys Internet Audience Measurement in Turkey. The cookie files are recorded for a user upon the first page view generated in the month measured. The files present data for cookies that have been ascribed to a particular country until the end of the month. Panellists who are enrolled in a software panel (where such is available, i.e. Hungary, Poland, Russia, or Ukraine), are recruited from a particular country only, based on their geolocation details. More information on this study can be found on www. gemius.com and www.audience.gemius.pl and other gemiusAudience sites.
About gemiusTraffic
The gemiusTraffic study provides information on internet users behaviour on the websites and applications. The data are gathered by using counting scripts, embedded in the code of sites included in the study. For more information go to www.gemius.com and www.rankingcee.com websites.
Glossary
Real Users the number of individuals in a given month who visited a selected website at least once. This number represents the reach of a researched website and shows the actual number of people not computers or cookies, which are often understood as visitors who visited the website. The socio-demographic profile of these people can be also determined. Page View loading the WWW document of a given internet website. When an internet user views a web page, this generates a page view. The page view is recorded by a special tracking script that has been placed in the code of the relevant web page.
About gemiusAudience
Gemius sets the standard for internet audience measurement (gemiusAudience) in almost half of all European countries, as well as in the MENA region and Israel. The gemiusAudience study integrates offline research, site-centric measurement, on-site questionnaire surveying and user-centric
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Methodological Note
Reach the indicator is expressed as a percentage and constitutes the ratio of the number of visitors (Real Users) who generated at least one page view on the selected website within the given time period, to the total number of internet users within that time period. Average Time Spent per User the total time spent by the average Real User from the given target group on the selected website or websites. Average Number of Page Views per Real User the number of page views on the selected website generated by the average Visitor from the given target group within a given time period.
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service provider, the power of IAB Europe comes from its extensive membership. IAB Europe exists to promote the growth of Europes interactive advertising markets, to protect the interest of the industry, to regulate practices on the market and to educate stakeholders in the digital landscape. To achieve these goals, IAB Europe coordinates activities across the region including public affairs, benchmarking, research, setting standards and best practices. IAB is supported by Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine and the UK. IAB Europe corporate members include Adobe, AlcatelLucent, BBC, comScore Europe, Ernst & Young, Fox Interactive Media, Gemius, Goldbach Media Group, Google, Hi-Media, Koan, Microsoft Europe, News Corporation, Nugg.ad, Nielsen Online, Orange Advertising Network, Publicitas Europe and Zanox. For more information, please see www.iabeurope.eu
About Gemius
Gemius is the leader in the field of internet measurement and consultancy in Europe, Middle East and Israel. Originating in Poland, Gemius has expanded across the EMEA region and is currently operating on thirty markets. The company is the pioneer of the full hybrid methodology for online audience measurement, integrating both consumer panels and advanced site-centric research, giving media planners highly credible results (gemiusAudience). It also offers professional research solutions, analytical and advisory services, from sitecentric and user-centric studies to technologically-advanced tools for studying internet user behaviour on chosen websites (gemiusTraffic), internet user socio-demographic profiles (gemiusProfile), the quality of WWW page usage (gemiusUsability) and the effectiveness of internet advertising campaigns (gemiusEffect). Gemius also conducts research related to subjects submitted by customers (gemiusAdHoc). Apart from the above-mentioned research services, Gemius offers studies on the behaviour of users who view online multimedia content (gemiusStream) and a research tool for immediate measurement and presentation of all clicks made by internet users on a website (gemiusHeatMap). For more information, please see www.gemius.com.
SATI Methodology
SATI Universe is composed of 6,150,182 persons represented by the Romanian population aged between 14 and 74 who live in urban areas and have used the internet. The methodology used for SATI was chosen by BRAT and belongs to the German company Spring GmbH. It is made up of several stages: traffic measurement, collection of data necessary to define the audience and the profiles of the visitors, a complex mathematical algorithm defining the persons visiting a website in a given period of time. The key phases of the methodology are described below. One audience and socio-demographic database is delivered to SATI clients every 3 months for corresponding periods of measurement.
About IAB
Representing 21 country members across Europe and over 5,000 companies, the Interactive Advertising Bureau (IAB) Europe is the trade association of the European digital and interactive marketing industry. Supported by every major advertiser, media group, agency, portal, technology and
Data Collecting
The data used to calculate the audience and the sociodemographic profiles of the visitors is the result of mixed methods of data collection, in an attempt to take the best advantage of each method. The results of the traffic measurement and of the online survey are combined in order to estimate the number of visitors to a website:
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Methodological Note
a technical measurement of each websites traffic, providing essential data for determining unique clients. A database will store each monthly set of Unique Clients for all the websites measured in SATI, a survey is carried out on each website, by posting an invitation to take part in the online survey and displaying an online questionnaire in order to get information about the websites visitors, the persons who have already used the computers/browsers assessed before, the data revealing the dimension of the universe and the structure used to weigh the data collected by means of the online survey is measured by SNA FOCUS - a face-to-face survey, carried out on a representative sample of the urban Romanian population aged 14-74.
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Main indicators and their definitions

Number of Visitors per week the average number of visitors (persons, not browsers) visiting a website per week in the measured period. Number of Unique Clients the number of Unique Clients visiting a website at least once in the reporting time period, calculated on the basis of cookies or other variables in case of a cookie-disabled browser (IP, user-agent, etc). A Unique Client basically translates into a browser. Number of Page Impressions the number of pages of a website, displayed in a browser at the request of a visitor. Number of Visits the number of a series of one or more page impressions sent to the visitors browser, as a result of a visitors request. A visit ends when the period between 2 page impressions is longer than 30 minutes.
Traffic Measurement
The technical measurement of traffic serves as the basis for audience sizing. The Unique Clients measured by the traffic measurement system provide the basic information for further identification of single visitors. The Unique Clients are the browsers/computers used by a visitor to see a particular website. The data about the Unique Clients is obtained using cookies, as well as other combinations of variables. To reduce the risk of double measurement of a Unique Client, due to inaccurate identification (for instance due to cookie deletion), the Unique Clients obtained from the measurement are then filtered through a specific statistical procedure, resulting in a number of unique qualified clients.
Online Survey
The sample for the online research is randomly drawn from the group of unique qualified clients on a monthly basis. If a user selected in the sample returns to any of the websites in the study, an invitation to take part to the online survey is sent to him/her. A complex system of sample administration allows for the display of invitations to the same single client to complete the online questionnaire on many different websites, at different hours, so that an optimal response rate can be obtained. The responses collected from that unique client will then be attributed to the entire list of websites he/she visited during the research period. A complex process of data-mining and transformation will compensate for any distortion that might occur due to heavy users and will also solve the multi-client and multi-user issues.
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bibliography
Executive Summary:
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Db.lv (15.12.2011). Ptjums: pusgad kolektvs iepirkans kuponu apgrozjums 4 milj. Ls http://www.db.lv/tehnologijas/ petijums-pusgada-kolektivas-iepirksanas-kuponu-apgrozijums-4-milj-ls-249640 (retrieved: 28.04.2012) HIS iSuppli Market Intelligence (26.04.2012) http://www.isuppli.com/Mobile-and-Wireless-Communications/News/ Pages/Samsung-Overtakes-Nokia-for-Cellphone-Lead.aspx (retrieved: 28.04.2012)
Market size & market development: Akamai (2011) The state of the Internet. http://www.akamai.com/stateoftheinternet/ (retrieved: 14.04.2012)
Online advertising state : The Drum (27.02.2012). Strategy Analytics forecast predicts that Global ad spend will grow by 4.9% in 2012. http://www. thedrum.co.uk/news/2012/02/27/strategy-analytics-forecast-predicts-global-ad-spend-will-grow-49-2012(retrieved: 10.05.2012) Forbes (26.08.2011). Online Ad Spend to Overtake TV by 2016. http://www.forbes.com/sites/roberthof/2011/08/26/onlinead-spend-to-overtake-tv/ (retrieved: 10.05.2012) GroupM (09.04.2012). GroupM study says 2011 global internet ad spend hit $85 billion for 17 percent of total investment. http://www.groupm.com/pressandnews/details/770 (retrieved: 10.05.2012) IAB AdEx, 2010 IAB AdEx, 2009 SPIR (2012). Internet Advertising to Keep on Growing in 2012. http://www.spir.cz/en/internet-advertising-keep-growing-2012 (retrieved: 12.05.2011)
Mobile internet: Capgemini, The Royal Bank of Scotland (RBS), and Efma (2011). World Payments Report 2011. http://gbm.rbs.com/docs/gbm/ insight/gts/perspectives/WPR_2011.pdf (retrieved: 19.04.2012)
The Economist (13.04.2012, online edition). The revolution to come. http://www.economist.com/blogs/freeexchange/2012/04/ general-purpose-technologies?fsrc=scn/gp/wl/bl/therevolutiontocome (retrieved: 18.04.2011) Telecompaper (23.04.2012). Polish m-commerce market grows by 722% in 2011. http://www.telecompaper.com/news/ polish-m-commerce-market-grows-by-722-in-2011 (retrieved: 18.04.2012)
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Capgemini, The Royal Bank of Scotland (RBS), and Efma (2011). World Payments Report 2011. http://gbm.rbs.com/docs/ gbm/insight/gts/perspectives/WPR_2011.pdf (retrieved: 18.04.2011)
Social networks: Mashable (25.02.2012). 13 Pinteresting Facts About Pinterest Users. http://mashable.com/2012/02/25/pinterest-userdemographics/ (retrieved: 23.04.2012) Mashable (11.04.2012). Is Google+ the No. 3 Social Network? Depends How You Measure It. http://mashable. com/2012/04/11/google-plus-number-three/ (retrieved: 24.04.2012) Mashable (23.04.2012). Facebook Now Has 901 Million Users. http://mashable.com/2012/04/23/facebook-now-has-901million-users/ (retrieved: 23.04.2012) TechCrunch (11.02.2012). Where The Ladies At? Pinterest. 2 Million Daily Facebook Users, 97% Of Fans Are Women. http:// techcrunch.com/2012/02/11/pinterest-stats/ (retrieved: 23.04.2012)
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IAB Europe
The Egg Bara Street 175 1070 Brussels Belgium +32 (0) 2 526 5568 communication@iabeurope.eu www.iabeurope.eu
Gemius
7 Woloska St. 02-675 Warsaw Poland Phone no. +48 22 390 90 90 contact@gemius.com www.gemius.com

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Do You CEE 2011 Report Gemius IAB Europe

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The overview of the Central and Eastern Europe internet market in 2011

Reach over 40 million CEE customers with Skype's in-client advertising.

Email skypecee@microsoft.com for more info

Do you CEE? 2011

Authors: Opinions headline

Alain Heureux, Filip Pieczyski

Grayna Jakubowska, Marta Klepka, Sebastian Sadowski, Konrad Sterczyski

Dawid Fillmann, Micha Wodarczyk

With special thanks to:

Do you CEE? 2011

IAB Europe President and CEO

Gemius Management Board Vice President

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Methodological note Bibliography

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Do you CEE? 2011

One stop shop for measurement of your digital marketing activities

Leading online audience measurement in EMEA

New generation of web analytics

Best monitoring of multimedia engagement

The fastest click analysing tool in the world

Integration of behavioural and survey insights

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Market size & market development

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Market size & market development

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Broadband penetration [%]

Broadband penetration - 2011

Chart 1. Broadband penetration Source: Eurostat, 2011

Market size & market development

Do you CEE? 2011

Market size & market development

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Opinions from the market

Artur Waliszewski Regional Business Director Poland & CEE Google

Market size & market development

Do you CEE? 2011

Market size & market development

Do you CEE? 2011

Fastest Click Analysing Tool in the World

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Countries with online adspends < 100M

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The Effectiveness of Online Advertising

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Lei sur eT ran ime ce, Bro ker age

Chart 3. Share of ad impressions per sector (gemiusAdMonitor H2 2011)

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Opinions from the market

Do you CEE? 2011

Belyaev Alexey Co-founder and Head of Research Committee IAB Russia

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First Choice Agency and Advertisers Adserver in CEE

Social networks & Mobile internet

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Opinions from the market

Levente Lovas Senior Product Marketing Manager Vodafone Hungary