The complete results of the HUDI Digital AdEx research, conducted for the second consecutive year by Momentum, an Austrian agency with over 15 years of experience in AdEx research, with the support of Ipsos Croatia, show that a total of 222 million euros net was invested in digital advertising in Croatia in 2022.
Analyzing the trends, the research noticed that the highest growth was observed in “traditional” advertising formats (display, video, native), with an increase of 10.1%. On the other hand, search platforms recorded a modest growth of only 3.7%, while social media platforms experienced a decline of 6.2%. Overall, the digital advertising market grew by only 1.3%. While the digital advertising market experienced explosive growth in 2021 across all EU markets, including Croatia, other EU markets continued to grow by an average of 9.6% in 2022 (Source: IAB, 2023), suggesting stagnation in Croatia compared to other EU markets. This is particularly true for small and medium-sized enterprises (SMEs) that primarily use advertising through global platforms in their promotional activities. According to estimates from surveyed companies in the research, a growth rate of 10.7% is predicted for 2023 compared to the previous year.
Out of the total spending directed towards global platforms, 96 million euros were invested through search platforms, mainly Google, while 62 million euros were invested through social media platforms, mostly Meta platforms. The global tech companies Alphabet (Google, YouTube) and Meta (Facebook, Instagram) together account for over 70% of the digital advertising market share in Croatia, generating over 160 million euros. If the advertising revenues that pass through their systems while the ads are displayed on Croatian media websites are added to this, the share would be even greater.
The research also presents the spending structure through technological platforms. Of the total 96 million euros invested in search platforms, as much as 79% or 76 million euros comes from small and medium-sized enterprises, craftsmen, and foreign e-commerce companies. In the case of social media platforms, this share amounts to 42%, or 26 million euros.
In the structure of total spending, large companies that usually outsource advertising services to specialized media agencies invested a total of 120 million euros in 2022. In the part of spending related to the SME segment, it is important to note the rapidly growing advertising activities of foreign e-commerce companies.
“Although we observe stagnation in the growth of the digital advertising market compared to other EU markets, Croatia, measured and indexed by AdEx (GDP per capita, population), is on par with countries like Hungary and Poland, and above Greece or Bulgaria. The lack of transparency from major tech companies remains a challenge in research and will continue to be so until the potential introduction of a digital tax following the example of Austria or similar markets. The future development of digital advertising, as well as the overall digital market, should be considered in the context of changes coming from regulations (EU directives), new industry standards in user behavior tracking, and major structural changes in media consumption, primarily in the area of various TV and video digital platforms,” stated Petar Pavić, President of the HUDI AdEx Working Group and co-founder of S.T.A.R. Digital Group.
TWO HUDI ADEX RESEARCHES
The research involved collecting reported amounts from publishers, mostly HUDI members, and major media agencies to provide a more objective estimate of the total investment in digital advertising. Investments in social media and search platforms were determined through their official reports to showcase the overall amount spent on digital advertising in Croatia, not just the revenues that pass through publishers and agencies.
The biggest change in the HUDI AdEx methodology this year was the inclusion of company surveys. Ipsos Croatia conducted research on a nationally representative sample of companies based on their size and industry to gather information on their investments in various digital formats, from traditional formats on portals (e.g., display, video, native) to investments in tech giants like Facebook and Google.
“The new HUDI AdEx, which includes company surveys, allowed us, for the first time, to see the investment structure by segments – from company sizes and industries to the revenue structure of global platforms, from social media to search engines. The methodological approach that utilizes various research techniques is an important advancement for the entire market, particularly due to the lack of business data from global platforms for the local market, as well as the overall dynamism of digital advertising and the digital economy – the market is still undergoing intense changes and has yet to reach maturity,” said Ozren Kronja, the Executive Director of HUDI.
The digital AdEx research project was led by a working group composed of experts in digital advertising from various publishers. The group is chaired by Petar Pavić, co-founder of Star Digital Group, and other members include Luka Duspara from 24sata, Igor Cenić from Hanza Media, Edin Preljević from Index Promocija, Vedran Vereš from Telegram Media Group, Marija Kopljar from RTL Croatia, Đuro Vitković from NovaTV, Toni Janjiš from Tportal, Matej Sever from Ipsos, and Dražen Tomić from Optimus Prime Informatika.
The executive board of the association consists of Stipe Grubišić, Director of Digital Operations at Hanza Media, Maja Blumenšajn, Director of New Media at Nova TV, Tonko Weissmann, Executive Vice President and Member of the Management Board at RTL Croatia, Zoran Turković, Executive Director and Member of the Management Board at 24sata, and Miran Pavić, Founder and Director of Telegram Media Group. Ivan Pleše retains his position as President of the association and is also a member of the executive board.