The advertising investment landscape in the Czech Republic reflects significant growth, in line with global industry trends. During 2023, advertising investment in the country increased by 12%, with projections for further growth in the years to come.
Market Development
The continued development of digital platforms, in particular Facebook and Google, led to an estimated 6% increase in advertising investments globally compared to the previous year. In parallel, the Czech advertising market showed an increase of 12% in 2023, and there are forecasts of a further increase of 8.4% in 2024. These figures are largely attributable to television and online media, which are expected to be key factors in the recovery from pre-Covid conditions and the economic and energy crises. In fact, projections for the current year indicate a total advertising market volume of 157 billion crowns.
According to Lucie Vlčková, Senior Research Manager at Nielsen / ResSOLUTION Group Agency, a survey conducted in cooperation with AKA, ASMEA and ResSOLUTION Group revealed that investment levels similar to pre-pandemic levels were reached in 2023. The annual increase in investment in 2023/24 was CZK 12.2 billion, corresponding to an increase of 8.4%. Total investment increased from CZK 129.7 bilion in 2022 to CZK 145.3billion in 2023, with projections to reach CZK 157.5 billion in the current year. Through the development of media channels in recent years, outsourcers have increased their marketing budgets for the development of new campaigns in response to consumer demand. Although non-media channels are being used, a main increase is expected in shopper marketing, telemarketing and loyalty programmes to support sales. More specifically, last year, net investments in media advertising reached CZK 87.2 billion, about one third less than list price volume, while CZK 58.1 billion was allocated to non-media marketing communication.
Future Trends and Prospects
The evolution of artificial intelligence is driving marketing activity, as it allows for more efficient analysis of market data, customer trends and enables the creation of personalised recommendations. However, there is growing concern among consumers about the negative impact this technology could have on social media, with projections indicating a reduction in user activity on digital platforms by 2025 and a 50% drop in organic search by 2028. This phenomenon is attributable to the development of tools that require a continuous learning process in the communication sector. Furthermore, the setting of standards for their optimal use is important in order to achieve advertising results that are able to attract customers.
Despite a stagnation in the use of print media, the overall media space is increasing, driven by the expansion of the internet, television and radio. This space increased from 125.5 billion crowns in 2022 to 134.8 billion crowns last year. According to Ondřej Novák, director of ASMEA (Association of Media Agencies), “According to our estimates, the average TV inflation exceeded the market inflation rate last year. However, the main reasons have shifted from the facts (input prices, market uncertainty) to the market (increased demand, lack of stocks)”.
More inserzionists
Food chains, such as Lidl, Kaufland and Albert, continue to be the main advertising investors, followed by financial institutions, pharmaceutical companies, electronics companies and, recently, recreational services. However, it is important to note that the public procurement sectors are still underinvested, accounting for only 2.2% of the total communications market. This is considerably lower than in other Western European countries, where advertising expenditure accounts for almost 20% of the entire communications market. According to Lucie Češpivová, owner of the Dorland agency, “Communication projects aimed at the general public cannot be realised effectively under market conditions with a budget of up to 2 million crowns”. More investment is therefore needed, in order also to create more transparency in the sector itself.
In conclusion, the increase in advertising investment in the Czech Republic reflects an optimistic economic outlook, with sustained growth both globally and territorially, fuelled by the expansion of digital platforms and growing consumer demand. However, the sector faces challenges, including the impact of artificial intelligence and the need for greater investment. The future will depend on the ability to adapt to new technologies and effectively meet changing consumer needs.
AI-generated image
Graphic source: https://storyset.com/
