Online Marketing in Romania

The online advertising market in Romania is poised to grow to an estimated 15 million Euro this year, a 50% growth from the 10 million Euro spent on online advertising in 2007, accounting for 3% of the total advertising expenditures (source: Deloitte). While not even comparable to markets like UK, for example, where online advertising has already absorbed more than 50% of total advertising money (later edit: I was wrong, the online advertising market share in UK in the first half of 2008 was just 18.7% of total advertising – source: Reuters), the Romanian online advertising market is growing and developing rapidly (in 2007, online advertising was accounting for only 1% of total advertising budgets).

Corporate marketing strategies are already talking about the next levels of customer segmentation, moving from demographic and psychographic segmentations to behavioral segmentation that tries to precisely target the customer’s state of mind at a specific moment in time and space. Despite that, the online advertising market in Romania is barely now able to deal with demographic segmentation, although online customer segmentation is probably easiest, fastest and cheapest of all.

It is no wonder that large corporations and online publishers in Romania still use the local or free web analytics services, such as Trafic.ro or Google Analytics, and that the international players on the webanalytics market are not yet even interested to look in our direction. Even though the local online players have joined efforts and created SATI (Internet Audience and Traffic Study), an independent industry association, part of BRAT (Romanian Office of Audience Audit), there is still a significant fragmentation of the online market and its players in terms of the tools used to measure the online audience and the ability to understand the implications of the results generated by these tools.

In such an emergent market, it is no wonder that the main players are not fully prepared to take it to the next level of development. There is a pretty big discrepancy in terms of knowledge and online marketing skills between advertising agencies, online publishers and online advertising clients, difference that generates a lot of confusion and misunderstanding among the players, as well as within the general public. Although we do have the developed markets to set examples for us, we should not simply follow their development paths, but rather leap ahead based on the knowledge that we now have access to.

Online advertising agencies are probably complacent in the current situation, since they sell advertising space anyways (albeit they could probably sell more if they would put more effort into developing the market). Online publishers are selling as much as they can, not caring a lot about relevance for their advertising clients or their audience segmentation (they do bulk sales, based on total number of visitors, not even touching terms such as bounce rate, top pages or average time on site in their discussions with their advertising clients). Online advertising clients are still shy to approach the market because they do not fully understand it and are afraid of their online campaigns generating effects that they cannot control.

While there are innovative and brave online advertising campaigns running right now, the general feel of the market is that it will still take a few years for it to reach a state of so called normality, transparence and fair competition. Until then, I assume that the big bulk of advertising money will still go to the traditional media channels.

I think that one of the best solutions to speed up the money influx into the online marketing channels is to put more time, effort and resources into training the players on the market. Ironically, this can be done mainly by the online advertising agencies, who capture most of the online money anyways but don’t seem to care enough, or the independent online marketing consultants, who sometimes are too small to be able to cover the market efficiently.