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ONLINE MEDIA COULD BENEFIT FROM THE ECONOMIC CRISIS

The silver internet lining to Slovakia’s media cloud

THE PRINT media are experiencing difficult times. The internet has delivered a severe blow, changing the reading habits of the general public. And the global economic crisis has now led companies to slash the amount they spend on advertising, further worsening the situation.

The internet has changed reading habits - especially when it comes to news.(Source: Jana Liptáková)

THE PRINT media are experiencing difficult times. The internet has delivered a severe blow, changing the reading habits of the general public. And the global economic crisis has now led companies to slash the amount they spend on advertising, further worsening the situation.

The Slovak print media are feeling the heat and putting more stress on their online editions. All the main Slovak dailies have online versions and have plans for new internet products. They say that they intend to hire new staff and are intensifying cooperation with the editorial staff of their print versions.

“Print, not only in Slovakia, but actually around the world, is the media type experiencing the biggest slowdown in the growth of expenditure on advertising,” Martin Mazág, the editor-in-chief of Stratégie, a monthly which focuses on the media and advertising, told The Slovak Spectator.

“While in 2006 year-on-year growth in [advertising] expenditure on this type of media was 7.4 percent, according to the regular annual analysis of the media market conducted by Stratégie, in 2007 it was only 6.9 percent. A slowdown is also expected in 2008, for which we do not have final figures yet.”

In spite of this downward trend, the print media remain a strong element in the market.

“From the viewpoint of the share of the advertising market, the print media make up more than 30 percent,” said Mazág. “For 2007 this represented, according to our estimates, €108 million (Sk3.26 billion). This is therefore a significant source of income for the media, while the print media remains a significant type for clients.”

The internet boom, partly thanks to improved technology but also due to an increasing range of online content, has brought changes in recent years. Advertising spending in the print media, especially dailies, has begun to stagnate – though some magazines and specialised media have seen growth – while advertising spend on the internet has risen steeply, by over 60 percent annually, said Mazág.

Stratégie estimates that the value of online advertising exceeded €18.6 million (Sk560 million) in 2007. And in 2008, for the first time the internet advertising might have exceeded advertising on radio, which typically attracts €21.6 million (Sk650 million) per year, said Mazág.

“So publishing houses whose portfolio and incomes are based in particular on a daily face a real challenge, and need to decide in what direction to develop their print editions while also developing synergies with their internet projects,” said Mazág.



A possible fillip for online media



The economic crisis is likely to affect more or less all media types. The slower growth in advertising expenditure in the media during the final months of 2008 has already indicated this. But in the end the internet media could emerge from the crisis as a winner, with a bigger slice of the advertising market.

“The most significant impact may be that print editions, as a consequence of the crisis, will report another drop in income from advertising, the volume of which will not return to the previous level once the market stabilises, but will flow to the internet and, for example, specialised television advertising,“ Mazág told The Slovak Spectator.

While some Slovak media outlets are circumspect about future prospects, others are quite optimistic.

“In spite of the crisis we expect a moderate increase in advertising thanks to new products which we will launch later this year,” Martin Kolesár, the head of the internet edition of the Hospodárske Noviny financial daily, told The Slovak Spectator.

He sees in the crisis a chance for quality media to grow because readers are increasingly looking for reliable and precise information, Kolesár said.

“But this will not necessarily lead to an increase in advertising,” said Kolesár. “It will depend on advertisers whether they can use the crisis to their benefit. In any case I do not think that internet news websites will face a significant decrease. Developments in the United States do not suggest this either. Experience elsewhere demonstrates that there is a move of readers and advertisers from print to online.”

Valér Kot, the director of the electronic publishing at the Petit Press publishing house, which publishes the Sme daily (and which is also a part-owner of The Slovak Spectator) as well as its internet version, Sme.sk, is cautious when speaking about the future, even though he thinks it is very probable that the concerns about falling advertising spend should not affect the internet media.

“In spite of this there is expected to be a certain investment caution or even restraint and thus growth is not expected to be as dynamic as if there had been no crisis,” said Kot.

The Ringier publishing house, which owns the Nový Čas tabloid daily, did not want to comment on its commercial plans.

“But we can say that the crisis has not been affecting the strategic plans of Ringier on the Slovak internet market and that we are preparing all our projects in line with our plan,” Martin Pastierovič, the editor-in-chief of the daily’s online version, Cas.sk, told The Slovak Spectator.

The fact that the internet versions of the main dailies attract readers with university educations and above-average incomes is another factor which makes these websites even more attractive to potential advertisers.

“Sme.sk is a long-term leader in the rate of visitors of news websites, with more than one million unique users monthly,” said Kot.

Cas.sk currently has 350,000 unique users each month on average, something Pastierovič regards as a sound number for a seven-month old project.



Internet growth



Slovakia’s Internet Media Association (AIM) is optimistic, predicting that internet sites will report an increase in sales in 2009.

“Internet media have a great potential to use the economic crisis for their benefit,” AIM’s Milan Csaplár told The Slovak Spectator. “It is natural that clients will limit advertising activities and be careful about effective usage of these budgets. Moreover, if one website disappears from the internet, a new one will replace it within a few days. Something like this is not possible in any other type of media.”

AIM estimates its members’ revenues to have been €25 million in 2008, an increase of almost 50 percent compared to 2007.

According to Csaplár, there is no need to discuss any longer whether the internet as a media type is equal to print, radio, or television.

“Its popularity, visitor rates and penetration levels send a clear message,” said Csaplár. “The internet offers customers opportunities which the competition cannot.”

Regarding forms of online advertising, banners have been the most commonly used form for a long time in Slovakia, according to Csaplár. Banner advertising makes up approximately 50 percent of the internet advertising in Slovakia. This is followed by classified ads and search. In this, Slovakia is following trends already observed abroad. Last year so-called rich media, which is advertising integrating voice and video, also started to gain ground. Csaplár ascribed this to the fact that Slovak servers have started to employ video in a bigger extent.

Print versus online versions



The online editions of the main Slovak dailies usually contain all the articles from the print versions but also employ the added-value features offered by the medium, such as audio, video, interactive iconography, unlimited space and others.

Online editors update the sites with information from newswires and their own materials. Since there is no problem with space, as is the case with print media, online versions of articles can be longer, accompanied with tables, more photos, audio and video. Readers can also add comments or join a discussion about the hottest topics.

“The difference between the print and online edition changes, depending on the time of day and happenings in the world,” Marian Niton, the head of the news department at Pravda.sk, the online edition of the Pravda daily, told The Slovak Spectator. “In the morning the paper edition is close to the internet version. The most interesting articles from the print prevail on the front page. Later the content changes with the latest developments, and new events are more prominent.”

The internet version of Nový Čas, Cas.sk, only uses part of the material printed in the paper.

“We put stress on the fact that in the future most of the material on Cas.sk will be original, which the reader will not find in print,” Pastierovič told The Slovak Spectator.



New projects in the pipeline



The dailies plan new products to draw more readers to their websites. These will require more staff and greater cooperation with the print staff.

For Hospodárske Noviny, Finweb, a financial portal, will be a key project, which has resulted in the hiring of new staff.

“It will provide the latest news from financial markets as well as information about investment opportunities,” Kolesár told The Slovak Spectator. “Something similar has been missing from the Slovak market and this has been demonstrated through low financial literacy. Social networks, which have a huge potential in news coverage, are also a big theme. They can, for example, offer a way of filtering relevant details from the present-day flood of information.”

A challenge for Hospodárske Noviny will also be the intensification of cooperation with the editorial staff of the print version.

At Sme the editorial staff of the print version is being integrated into the creation of the internet edition, said Kot.

According to Pastierovič, since Cas.sk is a new product, the website has been constantly growing, along with its editorial staff.


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