Agency 2014 by CorD Magazine

S P E C I A L

E D I T I O N

CONNECTING MEDIA WORLD Advertising Sector in Serbia 2014/15

- Advertising is based on one thing: HAPPINESS

— DON DRAPER, “Mad men”

COMMENT

Media Agencies Have a Central Role in Tomorrow’s Connected Media World Apart from its damaging financial impact on agency revenues, the global economic recession has created or accentuated two trends which are having an important effect on agencies generally and media agencies in particular

DOMINIC LYLE

Director General, EACA

EXCLUSIVE

he first has been to challenge the truism that agencies and brands should build collaborative partnerships. In the new post-recession world, client/agency relationships are often short-lived in nature, placing greater emphasis on financial results. Simultaneously, the recession caused many advertisers to shift towards digital advertising both to save money and to satisfy the consumer

position, McKinsey have conclusively demonstrated that advertising has fueled, on average, about 15 percent of growth in GDP for the major G20 economies over the past decade— and in some years, the contribution was as high as 20 percent. At the heart of that growth is digital media, which has grown strongly in recent years, when other media have suffered. It represented 17 percent of total media advertising expenditure

BY UNDERSTANDING WHAT WILL MOTIVATE CONSUMERS TO CHANGE THEIR BEHAVIOUR AS WELL AS THE BEST PLACES AND TIMES FOR ANY MESSAGE TO APPEAR, MEDIA AGENCIES ARE HELPING TO MAXIMISE THE EFFECTIVENESS OF THEIR CLIENT’S MARKETING MESSAGES demand for online content. In the face of criticism from some economists that advertising does not benefit the economy because it tends to increase prices, encourage nonessential investment and help leading companies retain their market

ADVERTISING SECTOR IN SERBIA

in G20 countries by 2010, up from less than 3 percent in 2002. Most research shows that half of the money spent on digital advertising is new investment; the other half represents a shift in spend from traditional print and broadcast media to digital media (for exam-

ple, more online postings on eBay at the expense of newspaper classifieds). As the proportion of advertising spend devoted to digital media increases, economic growth also increases. This finding suggests that digital media can provide greater benefits to an economy than spending on offline media, such as print and broadcast ads, alone. Although digital media represented, on average, 9 percent of advertising expenditure over the past decade, it was responsible for 29 percent of advertising’s effect on economic growth. Digital media offer particular opportunities to media agencies because, in today’s complex media world, the role of the media agency is central to the development of effective communications. By understanding what will motivate consumers to change their behaviour as well as the best places and times for any message to appear, media agencies are helping to maxim-

ise the effectiveness of their client’s marketing messages. Ten years ago, if you asked an account handler in a network advertising agency group about cross media production co-ordination beyond TV and press, you would be met with a blank expression. The cross media market place has evolved beyond recognition. And agencies have recognised the need to demonstrate specialist capabilities that span creative and production disciplines. Today the majority of brands have also embraced a cross media approach, striving to connect on a more personal level and are actively creating integrated cross channel touch points. When media agencies were first launched, their main focus was on their ability to buy media space cheaper and more efficiently than the mainstream advertising agencies, which had previously managed the process of media buying. Today, media agency staff will include roles that simply didn’t exist a decade ago, with titles like search specialist, social media technology expert and content creator. These specialists ensure that the data produced by

to content and/or advertising). That said, more progressive countries and broadcasters have recently started to ensure that audience measurement includes 3 additional metrics (particularly within TV): timeshifted viewing (beyond 7 days after transmission), beyond the TV screen (i.e. PC, laptop, tablets, smartphones etc) and integration with other data sources (e.g. merging census data with internet protocols, metadata etc). These efforts and developments are welcome and essential: in our multi-screen world of today and tomorrow, agencies and clients want and need to understand the different viewing and listening patterns of be-

INDUSTRY PARTNERS NEED TO ENSURE THAT ALL PARTIES (I.E. MEDIA OWNERS, AGENCIES AND CLIENTS) FULLY RECOGNISE AND UNDERSTAND NOT ONLY THE CHANGING DYNAMICS OF MEDIA CONSUMPTION AND BEHAVIOUR, BUT ALSO THE REAL IMPLICATIONS FOR, AND GROWING IMPORTANCE OF, OPTIMISING EFFECTIVE MARKETING COMMUNICATIONS ACTIVITIES modern marketing campaigns as well as the on-going conversation via social networks is easily understood. Increasingly, agencies and clients are developing and using planning techniques across all communication channels and need to plan, track, measure, analyse across all media touchpoints with consumers. Historically and currently, the measurement metrics provided by the majority of broadcast media owners across Europe continue to focus primarily on relatively traditional forms of audience measurement (e.g. number of eyeballs watching or ears listening

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haviour, interaction, duration and volume across and between all screens, not just on the traditional TV sets. Agencies and clients will continue to utilise traditional metrics, such as actual reported audience measurement, bur largely for trading and reporting rather than planning purposes. In the emerging media world, planning and investment decisions will be based upon the predicted, combined impact of an advertising campaign across all platforms and channels. Planning and campaign evaluation will be tracked using 360 degree techniques, including assessment of the

impact from paid, owned and earned channels of communication. The importance of consumer interaction via social media whilst consuming content (TV or radio) must also be factored into the equation; it is critical to use such dynamics in maximising marcoms effectiveness. Ultimately, agencies and clients are looking for measurement techniques that allow evaluation across converged media channels (including the impact of social media), not just crossmedia analytics. They do recognise that business and revenue models of individual content owners will continue to require silo’d forms of measurement, but encourage all businesses to take a progressive approach to developing converged media metrics. Industry partners need to ensure that all parties (i.e. media owners, agencies and clients) fully recognise and understand not only the changing dynamics of media consumption and behaviour, but also the real implications for, and growing importance of, optimising effective marketing communications activities. This means ensuring regular engagement between the most relevant contacts within each organisation to develop research and analysis techniques together with bespoke ideas and activities to fit this new world and ensuring that certain individuals within the media owner organisations come from a wider marketing/agency background, in order to demonstrate that they fully understand and can respond to the challenges facing agencies and clients. Additionally, there is a need to develop genuine “partnerships” rather than supplier based relationships. The precise form of such partnerships will and should vary enormously, but it needs to be based upon a full understanding of the core objectives for each party involved. Successful partnerships will obviously still need to include baseline terms of engagement, but crucially must go further to include deeper levels of integration between the relevant parties (e.g. bespoke arrangements to deliver unique benefits to each stake-holder). ■

ADVERTISING SECTOR IN SERBIA

INTERVIEW

Leader in Introducing New Standards Direct Media continually confirms its leadership role in mastering new technologies and understanding in changes to approaching media companies with the aim of successfully understanding consumers and representing the interests of advertisers JOVAN STOJANOVIĆ

Managing Director, Direct Media

edia companies in Serbia operate under conditions of constant crisis and the expectations of clients to get a better service for less money. Through the constant improvement of its work, investment in the acquisition of new knowledge and techniques, Direct Media succeeds in offering the superior service with a value that can be accurately measured.

operate. I think the basic conclusion that emerges from everything is very similar to those in other industries: the consumer has rightly become more demanding – it is necessary to provide quality services for less money. General technological development enormously, perhaps more than in other industries, influence the operations of media agencies. Direct Media was the first agency to recognise digital as a new opportunity, but also as an unavoidable path of development in the coming years. Our digital sector, the largest on this market, is a leader in the region, both in terms of income generated and the innovation which, in cooperation with our partners, we are introducing to the market. We were the first agency to introduce aug-

THE TREND IN THE WORLD, AND SO ALSO IN SERBIA AND THE REGION, IS THE MEASURABILITY OF EACH EURO INVESTED - ROI HAS BECOME THE MOST IMPORTANT PARAMETER FOR ALL CLIENTS - We certainly would not be mistaken if we were to say that the economic crisis of 2008 changed the overall picture of business, but the consequences of the crisis, to the extent to which we have even emerged from it, have lasted for so long that it would be more accurate to defined it as a new reality in which we all

ADVERTISING SECTOR IN SERBIA

mented reality to the region and for that were awarded with regional recognition; we were the first in the region to offer Twitter advertising, and today we provide our clients, again as a first, the possibility of real time bidding as a contemporary way of leasing online media. I would highlight in particular pro-

grammatic buying, or that we are currently working on the implementation of the first campaign of this kind in the region. Technological advances are a major challenge, but we are fully aware that Direct Media, as a leader, is expected to master new technologies before others and to also help raise the quality of the market in this aspect. • The activities of media agencies worldwide play an important role in improving the efficiency of sales and the overall business of a company, hence its high rating in the economic environment. In Serbia, however, this sector is not sufficiently recognised as one of the carriers of development, nor does it have the social status it deserves. What do you think should be done to change this? - With the objective of furthering our understanding of the needs of our partners, Direct Media positioned itself as a communications agency back in 2009, striving to participate even more intensively in strategic planning for brands on the market, because that is the only way to take an extra step towards better quality advertising campaigns. For this market and this time, unusually large investments in additional research, development of its own soft-

ware, that is really useful on this specific market, and a knowledge base that is constantly expanding, we continuously prove that the role of media agencies has changed and that its core business, media buying and media planning, gently turns in the direction of communication planning, with a deep familiarity with consumers, target groups and the markets. I think it is up to the agencies to convince the market that our role has evolved and that we perceive ourselves as being able to offer more and better than traditional media agencies. I think the Direct Media is already partially succeeding in that and for that reason we honestly support and await the development of other agencies on the market in the same direction, because that’s the only way the status of agencies on the market can be changed. • The place of the agency in the contemporary economic environment is at the heart of media-advertiser dialogue. How do agencies carry out this role and what kinds of efforts are exerted in its implementation? - It is true that, viewed as a lump sum, the role of agencies is somewhere between advertisers and the media. I still think that the role of a proper agency is on the side of the consumer, who is at the centre of our strategy. We are aware that the new times, fragmentation of media, and hyper individualism, have led to a completely new approach to developing strategies. Excellent knowledge of the media and their ever greater measurability gives us the advantage of comprehensive knowledge of market trends. Only through understanding the consumers can we put ourselves on the side of the advertiser, and then through absolute familiarity with the needs of advertisers we can find the most efficient way to communicate that message with the help of the media. Some will say that this is just phrase, but from a many years of practice, I can say with certainty that only a partnership between all three parties, with the aim of satisfying the needs of consumers, can lead to many years of success, in what all of us are trying to promote in the best possible way. I can say unreservedly that Direct Media has been privileged to work with companies that are leaders in their cat-

egories and I believe we, at least to some extent, and precisely by building these relationships between all three parties, have also succeeded in contributing to that.

Media Strategy adopted in 2011. The next phase, which will include new harmonisation with European trends, will be even more significant.

• Budgets for advertising should be recognized as an investment, not an expense. How is it recognized in Serbia? - As I said earlier, a large number of market participants have recognised that – certainly advertisers primarily, but together with them all those quality agencies. In order to improve the market, it is up to us to work together to ensure that all participants in the process become aware of that. The trend in the world, and so also in Serbia and the region, is the measurability of each euro invested - ROI has become the

• The opportunities provided by new media in Serbia will be reflected in the schedule of the budget for advertising. How will 2015 look and what challenges await us? - We already know that the reduction in public sector wages will have a negative impact on the purchasing power of the citizens of Serbia. In Serbia, which has been living in a kind of latent economic uncertainty for the last two decades, there exists this strange delayed effects of the crisis, which would probably have been noticed much earlier on other markets. It seems our consumers need time to react to changing circumstances, probably because they have spent years getting used to economic uncertainty.

WE CONTINUOUSLY PROVE THAT THE ROLE OF MEDIA AGENCIES HAS CHANGED AND THAT ITS CORE BUSINESS, MEDIA BUYING AND MEDIA PLANNING, GENTLY TURNS IN THE DIRECTION OF COMMUNICATION PLANNING, WITH A DEEP FAMILIARITY WITH CONSUMERS, TARGET GROUPS AND THE MARKETS most important parameter for all clients. The job of every high quality and transparent agency is to familiarise those clients, who do not have the know-how in the field, with the existing international practice and to suggest this kind of quality control of their work. With that, the work we do will also be recognised in the right way and respected in accordance with the results we achieve together. • What are the legal and regulatory solutions within the framework of existing and future laws that would improve the functioning of the advertising sector in Serbia? - The Law on Advertising, which is under preparation, is the first step towards that. Of course, all laws must follow the real picture of the media and the market, considering that we are still at the stage of adopting media laws based on the

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In any case, economic stability and GDP growth are the first factors that will affect spending in 2015, and therefore advertising budgets. Our assessment is that the impact of television, which has really been offering quality and truly professional programming in recent years, will continue to strengthen and that the new digital media will continue to be the winners in terms of growth in their share of the advertising pie. Media measurability is increasingly important and I’m certain the media companies will try, as accurately and convincingly as possible, to prove their impact on the public. Those who succeed in that will emerge as victors, while those who do not manage to do that in an adequate way will lose in the long-term. That’s why market regulations, tools and the research we have available are in the interests of all of us. ■

ADVERTISING SECTOR IN SERBIA

INTERVIEW

Efficiency Must Mean Sales! More, Faster and Cheaper vs. Strategy and Creativity? In crisis conditions clients are increasingly looking for “more”, “faster”, “cheaper”, while creativity and a strategic approach to quality are often ignored. This phenomenon threatens to lead to a complete collapse of the entire industry, without which it is impossible to adequately place products on the market DEJAN RANĐIĆ

General Manager, DNA Communications

ne of, if not the, greatest needs of our market is the process of continuous education and improvement of relations between agencies and clients, says Dejan Ranđić, CEO of DNA Communications. The rule “Cash is King” has done its bit, so media agen-

through tenders where bids are judged according to the lowest price, which is devastating for this industry. Primarily they are asking for “more”, “faster”, “cheaper”, and it is precisely these attributes that become the basic criteria for cooperation, while creativity and a strategic approach

ONE OF, IF NOT THE, GREATEST NEEDS OF OUR MARKET IS THE PROCESS OF CONTINUOUS EDUCATION AND IMPROVEMENT OF RELATIONS BETWEEN AGENCIES AND CLIENTS cies are too rarely consultants and strategists, and too often only implementers. There’s not enough partnership. Services that by definition have creativity at their core are procured

are qualities that are often ignored. “This phenomenon, which, if we’re honest, is the fault of both agencies and clients, threatens to lead to a complete collapse of the entire

industry, without which is impossible to ensure an adequate placement of products on the market – an essential element in any sales system,” says Ranđić. However, there are positive examples of small and large companies who enthusiastically approach their advertising strategy and view investments in effective communication with consumers as a serious investment and not an expense. • The economic crisis and huge technological advancements have resulted in major changes in the functioning of the advertising, media and media agencies. What challenges await agencies in accordance with these changes?

NEUROMARKETING IS NOT THE FUTURE, BUT RATHER THE PRESENT Dr Nikolaos Dimitriadis, Brand Advisory director at DNA Communications

People in marketing largely have presumptions about how some things take place in the human mind. It's a gamble, full of risk, with a lot of money in play. Companies invest a lot of money into a campaign and what happens is they pray that it works. Science, in that sense, enables us to eliminate that burden and offer a basis and methodology that we can

ADVERTISING SECTOR IN SERBIA

apply practically. Based on science, we can develop very specific tools and strategies, in order to precisely and accurately define messages that pave the way to the “buy button” in the brains of our customers. I have been investigating neuromarketing since 2005 and I'm very pleased that its global expansion is underway, but for now Serbia is lagging behind the rest

of the world in this area. Neuromarketing brings an entirely new methodology, a new concept of thinking and a change in our way of understanding communication. I am absolutely sure that the concept of neuromarketing will dominate the field of communications, marketing and sales in the next 10 to 20 years, and we want to be leaders in this field.

- The battle for market share is increasingly fierce, and the main focus of most companies in Serbia and the region is increasingly sustaining sales levels. Marketing, advertising and promotions have key parts in achieving those goals. The basis for successful placements is timely and effective communication, along with an increasing need for more precise and individual targeting of customers, because many categories of products are losing the characteristics favourable to mass communication and promotion. Cost-efficiency is a basic demand, but primarily through the establishment of a clear link between advertising and increased sales. • The activities of media agencies worldwide play an important role in improving the efficiency of sales and the overall business of a company, hence its high rating in the economic environment. In Serbia, however, this sector is not sufficiently recognised as one of the carriers of development, nor does it have the social status it deserves. What do you think should be done to change this? - In order to improve the situation and bring about the desired changes, it is necessary to identify the problem clearly, along with key partners – customers. I also believe strongly that clients are fully aware of the fact that in circumstances of constant budget cuts and increased demands for first maintaining sales, and then making it grow, they cannot expect such results without high quality support. This negative spiral is already reflected

on the market, where campaigns are overly aggressive, too similar to one another and, as a rule, contain overly basic calls for action (such as “pork loin 499 din”), which completely trivialises communication.

tic changes that resulted in change in the audience, which, for example, prevents ratings of the electronic media in the future being viewed through the lens of analogies with the same period of previous years.

• Budgets for advertising should be recognized as an investment, not an expense. How is it recognized in Serbia? - We encounter many positive examples. There are a large number of small companies that use their hardearned advertising budget trying to convert into a better sales tool, and the big ones that approach their advertising strategies with great enthusiasm and passion each year. A certain number of clients approach this process too routinely and with complete shallowness, which usually results in great inflexibility and almost complete rejection of innova-

DNA COMMUNICATIONS IS THE ONLY CERTIFIED NEUROMARKETING AGENCY IN THE REGION, MADE SO BY THE VERY PIONEERS IN THIS FIELD, THE WORLD'S FIRST NEUROMARKETING AGENCY, "SALES BRAIN" and plan, not inertia or the distribution according to their market share. Media development is an extremely dynamic and highly unpredictable. There has been a consolidation of the market, with media exiting traditional lines and most of them growing into media companies that offer communication with end users via several different channels (print, digital, special editions). There have also been dras-

tion and new strategic approaches. Unfortunately, there are also many of those who treat advertising as an expense, exclusivity, and accordingly they try as much as possible to reduce it. It is with this category that we usual part ways very quickly, and not because of the low budget, but rather because the approach prevents elementary partnership and cooperation. ■

CHANGE AND INTRODUCING INNOVATION The media are changing rapidly, our market is slowly opening to new methods and channels, some of which have long been mainstream in other developed markets, but there must be perseverance and vision. The clients’ needs for maximum effectiveness of advertising and for the best possible and most precise targeting of target groups are contributing to that. Digital is constantly expanding, while on the other side, BTL/Event in combination with online and social media is having a new life. If you wish to advance on any market, you

need true innovation. We recognised that potential in neuromarketing and on the basis of this model we have developed a unique methodology in accordance with the latest discoveries in the field, allowing each campaign to be a response to the real needs of end users, with the possibility of maximum testing of communication and reducing risk. In parallel we are working to educate the local market and to date we have successfully held two Neuromarketing workshops in collaboration with the world's largest Neuromarketing agency,

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“Sales Brain” from San Francisco, and one highly attended lecture at the Weekend Media Festival in Rovinj. All events sparked great interest among local and regional professionals in communications, experts in business development and top management, but also experienced marketing, PR and sales teams, which is further confirmation for us that we identified the potential well. I am proud to note that DNA Communications is the only certified neuromarketing agency in the region, made so by the very pioneers in this field, the world's first neuromarketing agency, "Sales Brain".

ADVERTISING SECTOR IN SERBIA

INTERVIEW

Think Out of the Box

Current consumption in Serbia is low, and from 1st November, with the adoption of new laws on media, limited income will be further reduced. As such, the capabilities of communication agencies are reflected in their ability to adapt to change MARIN ŠIMURINA

Managing Director, Grey Worldwide Belgrade rapid response to consumer habits. It is also extremely important to create a platform that will measure the effectiveness of sales. While that is iKomerc elsewher e in the world, in Serbia that kind of tool does not exist. Changes will only be felt after the establishing and embedding of such a platform on the local market.

ew business conditions – reduced budgets and the emergence of new media – forced media agencies to define their approach to the client and design campaigns in a completely different way. • The economic crisis and huge technological advancements have resulted in major changes in the functioning of the advertising, media and media agencies. What challenges await agencies in accordance with these changes?

• The place of the agency in the contemporary economic environment is at the heart of media-advertiser dialogue. How do agencies carry out this role and what kinds of efforts are exerted in its implementation? - Grey agency has been operating on the Serbian market since 1997. Our main interest lies in growing together with the client. Every type of plan, agreement, compromise and idea is conducted in the service of the progress of the business, both our own and the client’s. The core of our business is transparency and creating strong and fair relations with our clients, through creative agencies, suppliers and advertis-

BUSINESS IS CURRENTLY FOCUSED ON INTERNATIONAL CLIENTS, WHO ARE CONSCIOUS OF EVERY DINAR INVESTED, AND THEIR VERY APPROACH IS BASED ON EFFICIENCY - The main challenge for media agencies is to evaluate, to evolve from the standard perception of media buying and become communications agencies, capable of recognising the habits and needs of consum4 | INTERNATIONAL GERMANY 2012 ers. It is very important that media companies have a clear picture of their consumers, target groups: print media is lacking in this respect, digital media has the most precise information. It is crucial to create a

ADVERTISING SECTOR IN SERBIA

ers. In this chain, each element is equally important and nurturing those relations is something we insist on as a serious player. • Budgets for advertising should be recognized as an investment, not an expense. How is it recognized in Serbia? - Digital solutions have led to so-called “out of the box” thinking among agencies. Digital changes the way of thinking, strat-

egy, planning and, ultimately, changes the awareness of how a campaign should look. In this new order only those who are ready for rapid and frequent changes will survive. Business is currently focused on international clients, who are conscious of every dinar invested, and their very approach is based on efficiency. Their budgets are bigger and optimised, and our task is to further optimise them, thereby creating a new goal, and that is an investment, not an expense. Behind every media activity must stand results, i.e., the importance of every dinar invested. • What are the legal and regulatory solutions within the framework of existing and future laws that would improve the functioning of the advertising sector in Serbia? In every country where advertising is developed a Joint Industry Committee has been formed as a body that solves fundamental issues of mutual relations between clients, agencies, the media and advertisers. In Serbia this body would raise the standard and the focus would not be on laws and regulations, but rather on acts governing relationships within the industry itself. • The opportunities provided by new media in Serbia will be reflected in the schedule of the budget for advertising. How will 2015 look and what challenges await us? Increasing investment in the field of digital advertising and advertising on social networks. Budget optimisation, how much global trends can be applied on our market. Don’t receive direct orders, but rather always strive to be a step ahead of the wishes of clients. ■

ANY 2012

INTERVIEW

Exiting Crisis Through Partnership A situation where everybody fears uncertainty is certainly not good. Partnership relations, long-term cooperation, trust and joint investments in new media are the only solution for agencies and advertisers to forge a high quality partnership MILOS SIMIĆ

President of the IAA Serbian Chapter

dvertising budgets in Serbia are unfortunately not growing, which is only a natural response to the economic crisis. When you add to this an uncertain market situation and indistinctive economic development in the next few years, it is only natural for investment plans to stagnate. Advertising is an investment focusing on increasing revenue, strengthening a brand's market position, evoking trust in consumers and increasing the credibility of products or services. There is no progress if there are no investments in advertising. Unfortunately, the total amount of money being spent on advertising in Serbia is on the decline and last year – 2013 - was the worst year since 2006 in this regard. In the given market circumstances and considering the current atmosphere, it is very difficult to expect every advertising investment to become profitable. Traditionally, agencies have had pole position in the entire process, linking advertisers to media. Their mutual relations were based on trust, long-term cooperation and innovation. Today these relations are busy changing, which is derived directly from the current economic situation. Price has become the main argument in decisions advertisers make. In this way,

investments in developing new media professionals, which agencies have been a hotbed for over a number of years, has also become unprofitable, and that certainly isn’t good for further development and progress. I think the crucial thing to do is revert back to the time when quality of service was on a par with price. I also think that in the near future partnership will become a very important cooperation format. Solutions will come through

boom of our industry worldwide. Today an increasing number of businesses are directly selling online which, it seems, has also become the most interesting advertising channel for them. The print media have found a way to overcome the crisis to a certain extent by partnering digital portals and social

THERE IS NO PROGRESS IF THERE ARE NO INVESTMENTS IN ADVERTISING. UNFORTUNATELY, LAST YEAR – 2013 - WAS THE WORST YEAR SINCE 2006 IN THIS REGARD partnership relations between all of the industry's players which, I hope, will result in better investments. The IAA (the International Advertising Association), of which I am the president, has been working hard on better defining market relations through modern regulation, the active implementation of self-regulation and respecting the code of ethics of this profession. Serbia is still a rather traditional media market. TV remains the most important medium by far, which is contrary to technological development and the expectations of most consumers. Digital media instigate change and take the central position in the new economic

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networks. Regardless of these new opportunities, Serbian agencies have failed to utilise digital media for advertising and to find an adequate way to be paid for the resources they spend. This primarily relates to social media networks. The agencies also didn’t fully become agents of change, but have rather opted for a tried and tested method of selling to traditional media. A situation where everybody fears uncertainty is certainly not good. Partnership relations, long-term cooperation, trust and joint investments in new media are the only solution for agencies and advertisers to forge a high quality partnership. ■

ADVERTISING SECTOR IN SERBIA

INTERVIEW

Trust is Key For a successful relationship between client and agency it is essential to have greater education of all parties, mutual trust and the willingness of the client to recognise media experts as important partners who will assist them in achieving their goals SLAVICA ŠIMIĆ

Director, Media house d.o.o

espite the challenging economic situation and the reluctance of companies to invest in advertising, media still provide space for high-quality communication solutions to reach untapped market niches. In this work clients should rely on the professionals, who have knowledge, research and tools, for the

dia and media agencies. What challenges await agencies in accordance with these changes? - The challenges are already present. “New” media demands training and adapting to change, and “old” media are not lost, rather their effectiveness must be found in new formats. It is essential to constantly uncover new and

IN THE COMING YEARS WE CAN EXPECT A SUBSTANTIAL INCREASE IN INVESTMENT IN MOBILE ADVERTISING, BECAUSE OVER 20% OF ONLINE ACTIVITY IS CONDUCTED VIA “SMART” PHONES, WHILE LESS THAN THREE PER CENT OF THE BUDGET IS INVESTED IN THIS CHANNEL money invested in advertising to be converted into a smart investment. • The economic crisis and huge technological advancements have resulted in major changes in the functioning of the advertising, me-

creative solutions and further optimise planning. New models for leasing space, particularly in digital media, are redefining the role of the media agency, placing a focus on consultancy and research. For example, customers can easily lease advertising space directly

on Google, without the mediation of an agency, but certified experts will make a more efficient plan. • The activities of media agencies worldwide play an important role in improving the efficiency of sales and the overall business of a company, hence its high rating in the economic environment. In Serbia, however, this sector is not sufficiently recognised as one of the carriers of development, nor does it have the social status it deserves. What do you think should be done to change this? - It is essential to have greater education of all parties and trust in Agency – Client relations. It is necessary to share confidential information regarding the overall business of clients, and not just that part relating to our job. Clients should be recognised

PROFESSIONALS IN FOCUS clients and associates of agency Media House: ANDREAS WEISS

Dentsu Aegis Network

MediaHouse and Carat have worked together successfully since 2005 – so we are getting close to our 10-year anniversary! Carat has always enjoyed the local market knowledge and pragmatic, as well as professional, approach of Media House in working

together. Paired with our international expertise and Carat´s digital focus, we will focus on quality, efficiency and transparency on the market. ALEKSANDAR POZNANIĆ Jaffa DOO Crvenka:

The dedication with which Media House realises projects, and

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ADVERTISING SECTOR IN SERBIA

their sincere attachment to the brands they work for, are something that can be found increasingly rarely in the business environment. As with any house, the foundation is a key element of stability, and in the case of Media House that is definitely Slavica, with her energy, ethics and

rational approach to everyday challenges. NENAD LJUBISAVLJEVIĆ Serbia Bolton Group

A house that knows what it’s doing! MARIJA KARAN TV Prva

If I had the opportunity to put together the next

government I would suggest Slavica as prime minister, because I am sure that, with her team, she’d work honestly to fulfil that which was promised and on the realisation of the goal for all of us. I have been taught that by ten years of experience working with them.

us as important partners who will assist them in achieving their goals. With our clients we have achieved a high degree of trust and partnership relations in which the responsibility for successes and failures is shared. • The place of the agency in the contemporary economic environment is at the heart of media-advertiser dialogue. How do agencies carry out this role and what kinds of efforts are exerted in its implementation? - An agency should have a consulting role on both sides. When it comes to the relationship with the client, the agency has long played a role – based on knowledge, available research and tools – in creating the best communication solutions for its clients. But an agency also needs to play that role towards the media companies and, through transparent communication on the quality and efficiency of services in their offers, advise them on untapped market potential.

desired activities, we can see exactly how much return on an investment there is. If the Client primarily considers itself a trader, and the agency’s aim is just to spend a given budget, then the client will certainly view that investment as an expense. Investing in advertising always carries some risk, and we understand why custom-

• The opportunities provided by new media in Serbia will be reflected in the schedule of the budget for advertising. How will 2015 look and what challenges await us? - Without drastic changes in the structure of investments in 2015, the trend of growth of digital media through all forms of communication will continue, while television will continue to maintain its share above 50%. In the

E-COMMERCE IS NOT SUFFICIENTLY DEVELOPED IN SERBIA AND THERE IS HUGE ROOM FOR IMPROVEMENT, BECAUSE DIGITAL CAMPAIGNS CAN LEAD TO DIRECT SALES OF PRODUCTS AND SERVICES VIA THE INTERNET

• Budgets for advertising should be recognized as an investment, not an expense. How is it recognized in Serbia? - Perhaps through the digital segment it is easiest to understand that investing in advertising is an investment and not an expense. Today we can monitor how many people visited a site, how much and in what they reacted emotionally, whether they filled out a request for more information or eventually purchased a product or service. By introducing the relation between the invested advertising budget and TIJANA BABIĆ

MEGGLE Srbija d.o.o

Professional, Responsible, Precise, Dedicated IVANA TIMOTIJEVIĆ Atlantik Group

Sports and cars are my association with Slavica, which tells me that she recognises the importance of team and speed, which is very important in this business. I'm not

processes, in order to ensure the legal regulations do not hinder the processes and business development. For example, e-commerce is not sufficiently developed in Serbia and there is huge room for improvement, because digital campaigns can lead to direct sales of products and services via the internet.

surprised by the partnership relations, responsibility, reliability, or practicality that characterises Slavica and her team. You feel safe, unburdened, and they know what they are doing. SANJA BUMARIJANA ZONIĆ Oriflame

We have cooperated successfully with the team of

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ers are reluctant to apply some of our suggestions and solutions, but it often occurs that after a small-scale test campaign the client opts to increase the level of activity, encouraged by the results achieved. • What are the legal and regulatory solutions within the framework of existing and future laws that would improve the functioning of the advertising sector in Serbia? - Considering the dynamics of change in this sector, it is essential for lawmakers to constantly monitor these Media House for 11 years. Our successful cooperation is the result of deep understanding and joint work. The best results are achieved when the client and agency comprise a unique team dedicated to the same goal. In our case the professionals from the agency are more than associates, they are full support, given that they are familiar with the movement

coming years we can expect a substantial increase in investment in mobile advertising, because over 20% of online activity is conducted via “smart” phones, while less than three per cent of the budget is invested in this channel. New, more sophisticated tools are expected for measuring, for media buying, as well as new advertising formats. As an important example, we can also mention video advertising on YouTube which, in just the six months it has existed, has already had a significant impact on advertising in Serbia and the region. ■

and development of our business. Beside the fact that they have good knowledge of the Serbian market, we are also delighted with the creative side that is offered to us at each meeting, and we’re absolutely certain that we will get the highest quality service that includes the application of the latest technology when it comes to the media market.

RGIC

DPC Multivision

All that the same, but if you could do it a bit differently!” A thirst for variations that never fades away! AS-MEDIA Cooperation with them is enjoyment, because everything is so quickly and easily agreed – it flows like a song!

ADVERTISING SECTOR IN SERBIA

INTERVIEW

Companies should understand that their continuous media presence supports the achieving of their business objectives. All the more so because practice has shown that reducing the budget for advertising, and thus reducing media presence, results in falling sales of products or services

Synergy of Knowledge and Expertise BRANISLAVA CAGRONOV Managing Director, Media Jobs

lobal financial crisis affected media market all around the world, so, also in Serbia, we are all faced with reduced advertising budgets. Media Agencies are reliable partners on the media market in all circumstances. â&#x20AC;˘ The economic crisis and huge technological advancements have

the region, has been stagnating recently after several years of growth, which is a consequence of the global financial crisis. Companies are attempting to reduce costs and the first area targeted is advertising budget. However, it is extremely important to maintain a level of visibility in the media. Practice has shown that reducing advertising budgets, and thus media

WE KNOW THE HABITS OF CONSUMERS AND THE MEDIA EXTREMELY WELL, SO WE ARE ABLE TO ASSESS HOW THE COMPANIES WE WORK WITH CAN ACHIEVE THE GREATEST BENEFITS IN PROPORTION TO THEIR ENVISAGED BUDGET resulted in major changes in the functioning of the advertising, media and media agencies. What challenges await agencies in accordance with these changes? - The Serbian media market, like in other countries, especially those in

ADVERTISING SECTOR IN SERBIA

presence, results in a decline in sales of products or services. â&#x20AC;˘ The activities of media agencies worldwide play an important role in improving the efficiency of sales and the overall business of

a company, hence its high rating in the economic environment. In Serbia, however, this sector is not sufficiently recognised as one of the carriers of development, nor does it have the social status it deserves. What do you think should be done to change this? - A large number of media agencies operate on our market. Media Jobs is a local company that operates within the group Lowe & Friends, giving it access to new knowledge and experiences from other markets. We know the habits of consumers and the media extremely well, so we are able to assess how the companies we work with can achieve the greatest benefits in proportion to their envisaged budget. In our work we use the state of the art tools and local expertise, in synergy with years of experience. Prior to arriving at Media Jobs many of our colleagues gained experi-

ence in international companies and research houses, which has also contributed to us properly understanding the needs of our partners. • The place of the agency in the contemporary economic environment is at the heart of media-advertiser dialogue. How do agencies carry out this role and what kinds of efforts are exerted in its implementation? - Media Jobs cooperates with partners from different fields, from telecommunications, via retail, to banking services, and we are pleased that our partners understand the need for a continuous media presence, as support to the realising of their business goals. The media planning process and negotiating with media companies entails a comprehensive and complex process that companies planning to advertise often do not have the resources for. Media agencies possess those resources, professional skills and experience. In their work, our media experts use research which helps them to come to the knowledge

and, in accordance with the defined target groups, they carefully plan the media presence of their clients and their brands, products or services. In that way the agency secures for its clients the most significant market presence with the least funds invested. In addition to advertisers, media agencies are also inexcludable partners of media companies themselves on the media market all over the world.

IT IS ESSENTIAL THAT ALL LAWS REGULATING THE FIELD OF ADVERTISING IN ANY ASPECT, SUCH AS, FOR EXAMPLE, THE LAW ON MEDICINAL PRODUCTS AND MEDICAL AID DEVICES, THE CONSUMER PROTECTION ACT, LAWS GOVERNING TRADE OF FOOD PRODUCTS AND OTHERS, MUST BE MUTUALLY HARMONISED AND, OF COURSE, COMPLIANT WITH THE LAW ON ADVERTISING of consumers, as well as all the necessary tools for strategic planning and budget optimisation. Using this research and these tools requires huge investments. When we take into account all of the above, the most rational solution for a company is to engage specialised media agencies, which are the only ones to have all the necessary resources. • Budgets for advertising should be recognized as an investment, not an expense. How is it recognized in Serbia? - Agencies analyse the habits of end users in the consumption of media

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• What are the legal and regulatory solutions within the framework of existing and future laws that would improve the functioning of the advertising sector in Serbia? - When it comes to the media market and its regulations in Serbia, it is essential for advertising to be regulated as clearly as possible by legal regulations. We have a valid Law on Advertising, but in some aspects it is still unclear and requires improving and modernising. The new Law on Electronic Media also recently came into force and is harmonised with the EU Directive on audio-visual media services, which is also of great

importance to our business. However, the problem is the incompatibility of legislation that regulates this area and their common contradictions, which result in different interpretations. It is essential that all laws regulating the field of advertising in any aspect, such as, for example, the Law on Medicinal Products and Medical Aid Devices, the Consumer Protection Act, laws governing trade of food products and others, must be mutually harmonised and, of course, compliant with the Law on Advertising. It is also necessary for jurisdiction to be clearly divided, in order to be able to create a clear framework for the operations of all media market participants. • The opportunities provided by new media in Serbia will be reflected in the schedule of the budget for advertising. How will 2015 look and what challenges await us? - The crisis prompted us to adapt to current circumstances and find adequate solutions to the problems we are facing. In recent years we have witnessed online media constantly recording growth and influence. This brought changes in the business of advertisers, media companies and media agencies themselves. We also expect the growth of mobile advertising (advertising aimed at mobile phone users). Global online media companies, such as Google, Facebook, YouTube and others, will further improve the targeting and optimisation of campaigns. That’s a challenge, but also provides great potential for the media industry. Media Jobs is an agency that monitors all global trends and applies them to our market. In this way we improve our operations and provide new opportunities for our clients’ advertising. ■ CONTACT: MEDIA.JOBS Tel: +381 11 6556 800 Mail: office@mediajobs.rs Airport City Belgrade Omladinskih brigada 90v/VIII 11070 New Belgrade, Serbia

ADVERTISING SECTOR IN SERBIA

INTERVIEW

MIROSLAV ŠUTIĆ Director, Partner Research Solutions

Advertising (Does) Not Multiply Economic Development Fifty experienced marketing specialists would completely change the image of the national market and national products at the global level in just a year. However, both businesses and the state are short-sighted when it comes to this and have no courage to accept it

here is an old dilemma between whether advertising realistically increases spending and capital turnover or is just a necessary evil used by manufacturers to attract consumers who are being inundated by piles of useful/useless products. Of course, this is an artificially created dilemma.

consumers (information-persuasionseduction) has been going on for over a century, as long as mass production. An increasing number of products have been trying to win over a relatively limited consumer space (budget). In most cases, and in order to accomplish this rather unattainable goal, manufacturers have had to choose

A NEW GENERATION OF BUSINESSMEN, WHO SEE CAPITALISM AS A SYMBOL OF ABSOLUTE POWER IN THEIR 'BACKYARD', ARE NOT EVEN AWARE THAT THE ONLY REAL SOURCE OF (LONG-LASTING) POWER IS A SATISFIED CONSUMER WHO RETURNS FOR ANOTHER PURCHASE Why do chicken eggs sell much one of three basic combinations or better than duck eggs? Because strategies: high quality and/or affordable price and/or good presentation. whenever a hen lays an egg she announces it with a cackle. In cases where consumers were 4 | INTERNATIONAL GERMANY 2012 Active communication with forced to dig deep into their secret

ADVERTISING SECTOR IN SERBIA

savings or break their piggy banks, high quality is a given. So is efficient communication, which underlines all real benefits for consumers with an addition of the exceptional “pleasure” they will derive from making the right choice. Communicators are competing to see who is going to have a more creative presentation and not who is going to imagine the advantages of one product over another. However, when pockets are empty, low price becomes the most important argument, while product quality and its comparative advantages are only virtual issues. Still, active communication with the consumer remains the common denominator in both situations. This thesis is proven by the situation in the Serbian advertising industry, which achieved an annual turnover

of around €100 million several years ago and is showing no signs of being left defeated. The infamous 2008 financial crisis had the least effect on the advertising industry. The growth of this sector did slow down, but it never stopped thanks to two factors which are objective and subjective. The first factor is a continuation of the story about 'cackling hens'. Regardless of the reduced purchasing power and lower prices (and lower quality), supply still outweighs demand and each product needs to be pushed as much as possible in order to entice consumers to reach into their wallets. The communication is probably not so flattering any more, with aggressive advertising pushing out the sophisticated model and the quantity of media pressure over-

development? The weak influence of top marketing (and advertising) professionals is a result of extremely undeveloped entrepreneurial spirit on the whole. A new generation of businessmen, who see capitalism as a symbol of

OUR BIGGEST CAPITAL – CREATIVITY, INNOVATION, VISION, RESOURCEFULNESS, COURAGE, GOOD COMMUNICATION SKILLS AND UNDERSTANDING OF MODERN MARKET RELATIONS – HAS BEEN TRAPPED ALL THESE YEARS shadowing the quality. Nevertheless, it seems that advertising has never been stronger than it is now. The subjective factor, which should be credited for the resilience of the advertising industry during the time of general recession, comprises pronounced creativity, excellent craftsmanship, exceptional ability to cope and quick adaptation to the new business environment. All of this is applicable to the Serbian advertising industry too, not only during the past decade, but the past two decades. Our advertising agencies are on an equal footing with the biggest global advertising players and, for a number of years, they have been the hotbed of advertising talent in the entire region (and wider). Their victories at various advertising festivals have almost become routine. We could even say that the potential of our advertising industry far exceeds the level of development of our market economy. So, why is it that this potential doesn't emerge at the forefront even more and have a more significant impact on economic

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absolute power in their 'backyard', are not even aware that the only real source of (long-lasting) power is a satisfied consumer who returns for another purchase. A satisfied consumer demands (to a certain extent) a fair supply and careful communication. Just think back to all futile attempts of advertising Serbia or its products abroad through raising national awareness. The commissions placed in charge of doing this comprised eminent and renowned people from music, artists, businessmen,

professors of economics, doctors and state representatives who didn't have a clue about communication or 'seduction' skills, the whole purpose of which was to change awareness and behaviour. There were no professional communicators or masters

of a new skill of shaping (functional) behaviour in sight. Marketing was and still is an untapped opportunity for repositioning companies and products on both the domestic and global markets. The economy is the one segment that really needs new ideas, new strategies, new skills, new markets and new consumers. The economy is not able to tackle this problem by itself, since it is drowning in old-fashioned or immature notions of contemporary market behaviour. Fifty experienced marketing specialists would completely change the image of the national market and national products at the global level in just a year. No 50 businessmen or 50 state officials are able to accomplish this, regardless of how powerful they might be. Our biggest capital – creativity, innovation, vision, resourcefulness, courage, good communication skills and understanding of modern market relations – has been trapped all these years. Both the businesses and the state are short-sighted when it comes to this and have no courage to accept it. Today's version of the old saying “a bird in the hand is worth two in the bush” could well read “no bird in the hand and I certainly don't want two in the bush”. ■

ADVERTISING SECTOR IN SERBIA

INTERVIEW

Time is the New Currency

Media agencies are increasingly faced with two challenges: one is a limited budget for advertising and other is limited time in which to carry out a campaign. Real time planning has become inevitable, not only in so-called new media, but also in those we call traditional media VIOLETA GRUBIŠIĆ

Managing Director, MEDIAPOINT

he challenges that media campaigns will confront in the next year are related to the continuation of the crisis and balancing client-media relations in these circumstances. However, many years of experience teaches us that the client will always find the money for a good and original idea.

• The place of the agency in the contemporary economic environment is at the heart of media-advertiser dialogue. How do agencies carry out this role and what kinds of efforts are exerted in its implementation? - I think it is primarily important to answer all strategically important issues for the realisation of the determined goals of marketing clients. We

best reach their target audience and, in addition to that, develop content that both the media and the client will be satisfied with – the media company because it will thus increase the quality of its own content and the client because that content will attract the target group in the right way. Contemporary economic conditions at this moment are such that reducing advertising budgets is a mass phenomenon. However, most clients will gladly accept innovation, provided that means reducing, or at least not drastically increasing, costs and provided it does not deviate from the company’s corporate identity. On the other hand, there are clients who are always looking for something that has never been seen before, where the task of agencies is to create, with the help of new technologies, something that does not already exist in the world of advertising.

AN EXPERIENCED TEAM, WITH KNOWLEDGE AND EXPERIENCE IN ALL MAJOR MARKET CATEGORIES, ALLOWS US TO RECOGNISE THINGS ON TIME AND WORK TOGETHER WITH OUR CLIENTS PROACTIVELY are one of the links in this process, but with the globalisation of media the digitization process and lifestyle changes, the role of the media agency receives additional complexity and importance. We are the ones who will find for 4 |the INTERNATIONAL GERMANY client the right place, right time 2012 and right intensity of advertising in the right media, which will enable them to

ADVERTISING SECTOR IN SERBIA

• Budgets for advertising should be recognized as an investment, not an expense. How is it recognized in Serbia? - Advertising as an investment is largely recognised among the greatest number of clients. However, time is also viewed as the new currency. We are often confronted by two challenges: a limited budget, but also lim-

ited time in which everything should be realised. Real time planning has become inevitable, not only in socalled new media, but rather also in those that we call traditional media. The advantage of Media Point is in the fact that it is able to respond flexibly and quickly with the aim of achieving the best possible Returnon-Investment for the client. An experienced team, with knowledge and experience in all major market categories, as well as experience working on the side of the advertiser, allows us to recognise things on time and work together with our clients proactively. • The opportunities provided by new media in Serbia will be reflected in the schedule of the budget for advertising. How will 2015 look and what challenges await us? - New media actually aren’t that new anymore. We increasingly witness companies directing their campaigns towards Facebook, Twitter and mobile applications. The development of these media brings with it many advantages, such as precise targeting of the target group and the possibility of finding a more precise niche. However, regardless of the growth of this type of advertising, relatively small budgets will continue to be allocated for this aspect. Most of the challenges we will face in the next year will be related to the continuation of the crisis and balancing client-media relations under these conditions. ■

INTERVIEW

In Step With Changes Agency Media S SMVG has spent many years investing in the development of the digital sector, from community management to performance marketing, which is becoming an increasingly important advertising segment in Serbia BRANKA MALETIĆ

CEO & Regional Manager Media S SMVG

egardless of the fact that technological changes are overdue in comparison with the UK and the U.S., our market is adjusting by developing services essential to serving the client. Agency Media S SMVG has spent many years investing in the development of the digital sector, from community management to performance marketing. Although there is now more and more talk about internetbased advertising, we have been doing digital campaigns for our clients since 2009 and the percentage of the agency’s total turnover in digital media (social, display, google etc.) has been growing rapidly over the years. The growth of digital advertising budgets in CEE in 2013 was 21% year-on-year, while during the same period in Serbia it was 13%, according to IAB statistics. It is interesting that now there is increasing talk about predictions for digital advertising on digital portals in 2015, while next year our market expects equal or reduced growth compared to the previous year – of 10 to 13 per cent. Growth is expected in video advertising, mobile phone advertising, Google and social networks (Facebook and Twitter), while display advertising stagnates. TV remains the dominant medium on our markets, with the fastest ANY 2012 building of reach and awareness, and there is a big question of how to measure the combined reach of all video formats, because they are not

now only a privilege of TV, but rather also internet portals and YouTube. Media S SMVG Agency has started to apply ISP (integrated screen planning), which is one of the key elements in increasing the efficiency of video campaigns. Depending on the market and target groups (younger or older), if we placed 85-90% of the total budget on TV, and the rest on internet-video format, we get 3-5% higher overall reach of the campaign. In developed countries, like the UK, U.S., Norway etc. this percentage is even higher. These are data for the FMCG category, which means that for technology or auto categories they could be even higher.

THE ONLY THING THAT HAS NOT CHANGED IN OUR WORK SINCE THE BIRTH OF ADVERTISING IS CONSTANT CHANGE Conversion is another important element for measuring the efficiency of a campaign, the relation between the amount invested in advertising and what is gained (sales, orders etc.). Here we are lagging behind the developed markets that have systems for measuring conversion and for media companies that are not developed for performance marketing. All these tools and research are expensive and for our clients that would be a serious additional expense to the overall cost of the campaign,

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where the profitability of measurement itself comes into question. Media agencies desks are occupied by “maths men”, a term increasingly used in the media, and for us numbers indicate the effectiveness of campaigns. Technological development and developed internet analytics media, as well as consumer behaviour on them, led to the conclusion that it is not enough to merely reach consumers through proper targeting, but rather it is also necessary to motivate consumers. That means the Content that should represent the organic growth of an agency. The role of media agencies overlaps with the creative agencies, where we produce high quality content that must be original and make sense to the consumers who will consume it. The only thing that has not changed in our work since the birth of advertising is constant change. Due to the aforementioned technological changes and economic crisis, agencies change. That is not a simple process and for this reason we have launched various seminars within the auspices of the agency that provide our people with the opportunity to develop with the demands of the market. ■

ADVERTISING SECTOR IN SERBIA

MEDIA: ABC COMBINED CIRCULATION

A Step in the Right Direction In a move already dubbed a “new dawn” for the print industry, the Serbian Audit Bureau of Circulations, a member of the global IFABC, has started combining print and digital sales figures into a single audited figure for the first time in its eight years of operating

ublishers now have a single, audited, trusted figure to take to advertisers that represents both print circulation and growing sales of digital editions. This merging measure is certainly a step in the right direction. ABC Serbia has accelerated its decision to join the rest of the world in creating a transparent environment within the Serbian media industry. The question that still remains is how deep the divide is in Serbia in terms of transparently conducted media business - between media own-

growing fast, but not as fast as everyone expected. Forecasts suggest there will be no extreme changes in the advertising market in the year ahead. We can expect further growth of internet advertising, while television will continue to hold its market share of almost 50% strongly. What is the future of the Serbian print industry? This depends on how soon publishers recognise the importance of transformation from a publishing firm to a global media company, with the introduction of new forms, formats, platforms and channels of communication.

THE QUESTION THAT STILL REMAINS IS HOW DEEP THE DIVIDE IS IN SERBIA IN TERMS OF TRANSPARENTLY CONDUCTED MEDIA BUSINESS - BETWEEN MEDIA OWNERS AND ADVERTISERS, WHO SHOULD HAVE A CLEAR PICTURE OF THE MEDIA IN WHICH THEY ARE INVESTING ers and advertisers, who should have a clear picture of the media in which they are investing. But is the industry moving fast enough to produce better metrics? With the economic crisis, the Serbian media market has faced falling advertising spending and over the previous five years total annual advertising revenue ranged from €155 up to €175 million. Spending through different communication channels has remained largely unchanged: TV is on top, while print is in constant decline, internet revenues are

ADVERTISING SECTOR IN SERBIA

The new laws on electronic media and public service media were adopted in August. Superseding legislation that was more than a decade old, the new laws introduce some significant changes, either as a result of harmonisation with the European regulatory framework or by addressing specificities of the Serbian media market. What will happen in the next few years depends greatly on the rearranging of the media industry and the pace of economic progress, as well as the capacity of the industry to carry out

reconstruction and catch up with technological developments and modern regulatory practices. In the meantime, but more than ever, the Serbian media market needs transparent measurement systems that are designed to adapt to the increasingly diversified media landscape, focused on transparency and enabling the media, marketing and advertising sectors to gain greater insights and control over their audience data. ABC remains firmly entrenched as the print media industry's chief bean counter. ABC and all other such measurement systems are made to improve advertiser efficiency and profit. Only then can media owners or media agencies expect to receive higher advertising budgets as recognition. As long as advertisers feel the benefits of advertising through a higher return on investment due to successful media campaigns they will continue to push and increase budgets. At this stage advertisers are generally confused by various measurement tools and methods, publishers’ claims about millions of copies sold and being a high quality vehicle for the promotion of their products and services. The future role of the Audit Bureau of Circulations will be the same as that of its very first day: • Bring the industry together to agree on measurement processes that define what counts and to determine best practices. • Offer independent audit and compliance services, delivering certification that verifies data • Inspire confidence in the market by delivering a valued stamp of trust across the media world. ■ ABC, governed by the industry, for the industry

INTERVIEW

Ride the Wind

The future of media and marketing will belong to those who are able to process a large amount of information, to shape it with meaningful logic and create content that the client will profit from in a world where consumers are changing rapidly MARKO KOSOVAC

Managing Director, Plus Media

oday's changes are so rapid that in such circumstances the only ones who can find their feet are those who are willing to adapt accordingly and who manage to cope in the competition of an ocean of online content and create an authentic product for their clients. This approach is called adaptive marketing and it has been embraced by one of the world’s biggest media agencies, Mindshare, of which Plus Media is a member.

ing. Simultaneously, this is also the vision of one of the world’s biggest media agencies – Mindshare – of which Plus Media is a proud member. • The activities of media agencies worldwide play an important role in improving the efficiency of sales and the overall business of a company, hence its high rating in the economic environment. In Serbia, however, this sector is not sufficiently recognised as one of the carriers of development, nor does it have the social status it deserves. What do you think should be done to change this?

a media agency and in the field of innovation in media companies themselves. • The opportunities provided by new media in Serbia will be reflected in the schedule of the budget for advertising. How will 2015 look and what challenges await us? - The domestic market is trying to keep pace with developed markets. However, this level is still lower. It is primarily for this reason that I believe the general picture of the market will not change drastically in 2015 compared to the previous year. Television will continue to be the dominant channel

• The economic crisis and huge technological advancements have resulted in major changes in the functioning of the advertising, media and media agencies. What challenges PLUS MEDIA, AS PART OF THE MINDSHARE SYSTEM, HAS A await agencies in accordance with COMPARATIVE ADVANTAGE ON THE SERBIAN MARKET BECAUSE IT these changes? IS UP TO DATE WITH THE LATEST MEDIA INDUSTRY TRENDS - Today media, consumption of media and forms of advertising in new media - The advertising market in Serbia can are changing, we can say every day. The of communication, although it is a fact still be considered a young market in impact of digital media on society in that room exists for the further development of online media. However, this this area. I consider constant training, general is huge and ultimately delivers will primarily depend on investment in of employees in media agencies and what no traditional media ever even online media and the ordering of the the clients themselves, is the first came close to hinting at – for each general situation on the market. criterion that must be fulfilled in order person to be a source of information, Our task is to monitor the latest for the market to improve and develop or it is a type of media that led to the trends in the field of media on a daily further. I believe that from the moment emergence of new advertising goals, basis and recognise those that we we are able to follow the developa person whose words are considered ment of the global market to a greater can use effectively in our clients’ caminfluential in a digital world. paigns. The advantage of Plus Media extent, the work of media agencies The future of media and marketing is certainly the fact that we are part of will also be recognised as a carrier of will belong to those who are able to Mindshare’s worldwide network and development to a greater extent. process a large amount of information, because of that we have easy and swift Plus Media, as part of the Mindarrange it in such a way that it has a 4 | INTERNATIONAL share 2012 system, is fortunate and has a access to a huge number of ideas, data logical meaning and use it to create GERMANY comparative advantage on the Serbian and technology from around the world activity that the client will generate a market to keep up to date with the latthat we can apply on the local market profit from in a world where consumer est trends in the media industry, both in the new media domain. ■ awareness is also changing fast. Such from the position of the operations of www.plusmedia.rs an approach is called adaptive market-

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ADVERTISING SECTOR IN SERBIA

INTERVIEW

Optimisation at all Levels

The crisis has prompted companies to view the countries of the former Yugoslavia as a single market of similar habits and purchasing power. Universal Media has responded to such needs of its partners with an integrated regional service that encompasses multiple markets BILJANA KOLAKOVIĆ

Regional Managing Director, Universal Media

s one of the leading media agencies in Serbia and the region, the first signs of the crisis prompted Universal Media to develop a long-term strategy enabling optimisation at all levels. Along with its clients, who decided that in crisis conditions they should view the countries of the former Yugoslavia, along with Bulgaria and Albania, as a single market of nearly 30 million people who are economically even, with similar habits, purchasing power, cultural connections and with an offer of similar brands, Universal Media offered to its partners an in-

with these changes? - Technological advances contributed to the automation of work processes, which ultimately leads to time savings and better use of human resources, as well as better control of the effect and results of operations. Long-term growth requires continually investing in people, education, data, i.e., understanding consumers, media and trends. Our partners recognise that media planning is a strategic process that involves the possession of knowledge, tools and data, coupled with the implementation of media

UNIVERSAL MEDIA OFFERS ITS REGIONAL PARTNERS AN INTEGRATED SERVICE THAT ENABLES THEM TO HAVE A CLEARER OVERVIEW OF OVERALL MEDIA ACTIVITIES, SAVE TIME, HAVE GREATER CONTROL OVER THE ENTIRE PROCESS AND BETTER CONDITIONS FOR ADVERTISING tegrated regional service that allows them to clearly perceive overall media activities, saving time, having greater control over the entire process and better conditions for advertising. • The economic crisis and huge technological advancements have resulted in major changes in the functioning of the advertising, media and media agencies. What challenges await agencies in accordance

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IN SERBIA

activities that result in sales growth and savings through optimisation of the media, or so-called smart planning. All this helps us to look at the link between investment in media and achieved results in sales, which is crucial in times of crisis. We are witnessing a change in the media sphere, the appearance of regional media, as well as those that develop on different platforms, and we cooperate with all of them.

• The activities of media agencies worldwide play an important role in improving the efficiency of sales and the overall business of a company, hence its high rating in the economic environment. In Serbia, however, this sector is not sufficiently recognised as one of the carriers of development, nor does it have the social status it deserves. What do you think should be done to change this? - Long-term cooperation with the largest international, regional and local companies, as well as constant expansion of cooperation, are proof that media agencies play an important role for companies, especially those in the FMCG sector. We recently started cooperation with very important clients, where our task is very complex and, in addition to media strategy work, includes coordination for as many as 15 countries. The best example of how the media agency is a key factor in the life of a brand is the “Share a Coke” campaign, which won us the Grand Prix at the SEMPL Media Festival in Portorož. Unfortunately, some still see media agencies as “resellers”. The reason is that there is still a relatively small market and needs of companies, and it is much easier to simplify process of strategic media planning and buying

and say that media agencies are “resellers” than to understand or learn about all the specifics of this complex practice. So it’s not like we blame others, but the agencies themselves are responsible because we have to work harder on education of clients, media, consulting companies, ministries, various associations and, ultimately, the general public. Through various initiatives and activities we strive to build the image of the profession: through the education of students, practical programmes, publishing professional articles, participating in panel discussions. There is also a problem that cooperation between media agencies is, unfortunately, at a “very shy level”. I have the impression that we have not agreed among ourselves that we are all doing a responsible job that requires extensive knowledge and experience. Once we have succeeded in doing that, we will find it easier to present the entire profession. • The place of the agency in the contemporary economic environment is at the heart of media-advertiser dialogue. How do agencies carry out this role and what kinds of efforts are exerted in its implementation? - We have been on the Serbian market for 17 years already and we nurture good relations with all partners.We openly discuss with media the needs of our clients and we clearly communicate what the key parameters will be in the creation of a media mix. With clients we set clear communication objectives for the coming year for their brands, with defined parameters of success and monitoring these brands, which is often also followed by an independent auditor. There are media parameters of the success of a campaign, but also parameters of success of the brand in communicating with customers and business parameters, sales, market share growth. In that sense our task is to cooperate with media outlets that will achieve the goals of our clients in the quickest and most efficient way.

- A positive trend exists and there are a growing number of companies with a clear view that an advertising budget is an investment, but there are some companies where marketing colleagues are seen as those who “spend”. It is up to the top people in each company to clearly communicate the goals and everything that is required to achieve them. We are exposed to a large amount of products and services and in order for your product to find its way to consumers it is necessary to communicate the key benefits in order for the consumer to have a clear reason to opt precisely for your offer. That’s why investing in communication is very important, it’s not an expense at all, it is only the final step in the total investment of creating a product.

THE BEST EXAMPLE OF HOW THE MEDIA AGENCY IS A KEY FACTOR IN THE LIFE OF A BRAND IS THE “SHARE A COKE” CAMPAIGN, WHICH WON US THE GRAND PRIX AT THE SEMPL MEDIA FESTIVAL IN PORTOROŽ

• Budgets for advertising should be recognized as an investment, not an expense. How is it recognized in Serbia?

4 | INTERNATIONAL GERMANY 2012

• What are the legal and regulatory solutions within the framework of existing and future laws that would improve the functioning of the advertising sector in Serbia? - In addition to new laws that are already active, it is essential to introduce clear bylaws (especially for the Law on Electronic Media). We also need a new law on advertising, which would be harmonised with the latest developments and would take into account the experiences of other countries. It must be clear, efficient and, first and foremost, effective. Harmonised with

it there need to be all specific laws and regulations governing advertising in the business of other industries. In that way we will not have the legal gaps, which then create the possibility of different understanding and interpretations. It is also necessary to organise the profession more seriously and actively engage in self-regulation in the process of managing operations. The Codex is already written, the process of organising a selfregulatory body that would monitor the implementation of the Codex is underway and in order for all of this to function it is essential that self-regulation is legally recognised. Through membership in, and activity with, the IAA, we are actively engaged in these processes. One of the most important postulates of our work is to improve the quality of operations on the market and to strive for its management with a view to the models of other more developed markets where Universal Media operates. • The opportunities provided by new media in Serbia will be reflected in the schedule of the budget for advertising. How will 2015 look and what challenges await us? - Less local, more global. That is an unstoppable trend. The method of leasing on digital media has completely changed the working methods of media agencies. For me, as someone who started working in this industry 15 years ago, Real Time Biding is something that inspires adoration. All “players” will have to adapt to new trends, agencies primarily, followed by media companies and advertisers. I was sceptical a few years ago when we had discussions on this topic with our global agency Cadreon, because some global trends in some cases simply do not come to life in our country. However, the results of campaigns speak for themselves. We succeed, through the process of “finest” targeting, with the maximum optimisation of investment, deliver for our partners much better results and cheaper conversions, around which everything revolves in a digital world. ■ CONTACT: www.universalmedia.rs

ADVERTISING SECTOR IN SERBIA

INTERVIEW

The Skill of Understanding Challenges

We cannot expect greater investment in online advertising until we have better quality harmonisation between databases on consumer players on the market LARISA ZDRAVKOVIĆ Client Service Director, Zenith Optimedia Adriatic

he greatest challenge of modern marketing is to understand the nature of rapid technological change and utilising these changes for the benefit of brands. In our case, we must be realistic and say that we are still in favour of advertising in traditional media and that the share of online advertising, although on the rise, is slightly exaggerated at this point.

• The economic crisis and huge technological advancements have resulted in major changes in the functioning of the advertising, media and media agencies. What challenges await agencies in accordance with these changes? - During 2009 the Serbian media experienced a significant decline in revenue from advertising and it will take time to recoup that. On the other hand, during the same period we faced major technological changes. One of them is the internet, the development of which represents a new source of human imagination and, thus, awareness of products and ways to connect consumers with them. The level of these changes is dramatic and will continue in the coming years. Exploiting all of this in the sense of benefits for brands represents a major challenge to modern marketing.

- By analysing the development of internet advertising in Central and Eastern Europe we see that there is growth, but in the last 10 years the share in advertising has not exceeded 20%. On the Serbian market, as well as the entire Adriatic, the situation is similar. Thus, online advertising is growing steadily, although I would say that the significance of this trend in the last three years exaggerated. I think that media agencies have an obligation to the real perception of the market and in this sense we should appreciate the fact that we are still in favour of advertising in traditional media. Here exists a very clear explanation which concerns the quality of the databases that we have on, for example, television, as well as the print media, which is much more detailed than those offered by digital advertising. This

2015 WILL BE EQUALLY AS CHALLENGING AS THE PREVIOUS YEARS, BUT THAT’S WHAT THE BEAUTY OF OUR WORK IS MADE OF gives us the possibility of Live tracking campaigns, but also many other features related to so-called Owned and Earned media. However, the lack of quality harmonisation on a common database on consumption players on the market with which we could better monitor development and online advertising.

• Today the importance of digital media is at the top of the agenda for most, while at the same the death of traditional me• Budgets for advertising should be rec4 | INTERNATIONAL GERMANY 2012 dia is predicted. How would you comment ognized as an investment, not an expense. on this? How is it recognized in Serbia?

ADVERTISING SECTOR IN SERBIA

- I believe that today every serious advertiser recognises advertising as an investment. As such, back in 2003 Zenith Optimedia developed the concept of ROI (Return of Investment) as the most relevant concept of understanding the needs of advertisers, and that is monitoring their return on investment by ensuring its optimisation. Today Live ROI is one of the most powerful concepts in the sphere of operations of global media agencies that we have successfully applied on 79 markets, including the markets of Serbia and the entire Adriatic region. • The opportunities provided by new media in Serbia will be reflected in the schedule of the budget for advertising. How will 2015 look and what challenges await us? - First and foremost, I do not think investments in new media will increase significantly in the coming year. For this to happen it would require the market to make a lot more investments in both technology and personnel. Also, I have mentioned already the dominance of traditional media and this position, despite the rise of new media, cannot be significantly endangered anytime soon. 2015 will be equally as challenging as the previous years, but that’s what the beauty of our work is made of. ■ CONTACT: ZenithOptimedia Serbia Kralja Petra 13/1, Belgrade 11000 Serbia T: +381 (0)11 3036446 larisa.zdravkovic@zenithoptimedia.rs www.zenithoptimedia.com

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