Digital Training Academy: Central and Eastern Europe

Leading thinking, world class training

Digital viewpoints: Filip Pieczyński, International Operations Manager, Gemius

We will see the CEE region grow rapidly in the next years. It will be partially due to the fact that the Internet will become more and more accessible in many countries. The pace of changes, however, very much depends on the local, governmental initiatives which aim to improve the infrastructure and accessibility. They are also important to speed up the process of liberating the telecommunication markets and making the Internet prices go down. Some of the countries in the CEE region which joined EU in last few years have already made a lot to improve the Internet accessibility. Estonia and Slovenia is a good example.

The Internet penetration there is already as high or even higher than in Western European countries. It will be mainly Hungary, Czech Republic and Slovakia which will face a significant increase in the Internet users (the main factor being the low connection prices if we compare them with other Central and Eastern European countries). Russia is another emerging market. The main constraint there is, however, the fact that the majority of Russian society does not have computers. There is an enormous technological gap between the places like Moscow or St Petersburg and the provinces. The penetration in those two big metropolises is round 50%, which is very high. It has to be said that the Russian government makes a lot of effort to make computers and telecommunication services more widely available.

The biggest growth in online adspend will be seen in those countries which so far had relatively low online advertising prices and now due to the strong increase in demand will be changing their price lists (e.g. Latvia and Ukraine). Many advertisers have just recently discovered the Internet as a powerful marketing medium so due to this fact we can expect further growth in online adspend across CEE region. In any country in which a big Western online player starts operating, the competition between the firms will stimulate the spendings. When Bite – a telecommunication giant – appeared in Latvia in 2006 local telecoms started spending much more on the online advertising. We can expect that this scenario will repeat in other Baltic states, Ukraine and Croatia. Ukraine is undoubtedly a country which experiences a boom in investments. Romania and Bulgaria may follow suit.The rate of growth in online adspend in the CEE region can be estimated between 30-50% for next ew years. Baltic states, Ukraine, Russia and perhaps also Romania and Bulgaria will face experience the biggest growth. Internet market size may double there in 2007.

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