Coloring the Map: Endre Somogyi Brings Central Europe into Focus
On August 1st, Endre Somogyi became the general manager of IAB Hungary, and its first full-time employee. Endre took some time before his new role to talk with us about his vision for this new era and about what the smaller markets can teach the big players. He also shared some insights from the innovative CEE initiative, a comprehensive exploration of the online landscape of Central and Eastern Europe.
In August of this year, you became the general manager of IAB Hungary.
Yes. I was appointed to be the general manager of IAB Hungary. I’ll be the first full-time employee for the organization. But at this moment, I am a board member and a volunteer. We have to inform our membership properly; we have to change our bylaws so that I can become the first paid employee.
I was also elected to the IAB Europe board in Barcelona, as a representative of the smaller, “tier three” countries. There are four tiers within IAB Europe: the tier four members are associate members who cannot vote. The tier three countries are smaller, less developed markets, for instance Greece, Hungary, Turkey, Austria, and Slovenia. The tier two countries are countries like Spain, France, Belgium, and Norway that may be smaller markets but are strong ones. And tier one, at the moment, is the UK and Germany, the biggest markets by ad spend volume in Europe. I believe that I was elected because of the CEE efforts along with Jaroslaw (Sobolewski, of IAB Poland.)
(Endre Somogyi, General Manager, IAB Hungary)
What are the primary objectives of the CEE efforts?
The main motivation is to have this geographical area covered with IABs, even in the really small, new markets like the Baltic States (Estonia, Latvia, and Lithuania). Bosnia and Herzegovina is now in the process of establishing an IAB. They aren’t huge markets in terms of ad spend at the moment, but we believe that IABs are important because they help markets to develop in a normal way. At this point it’s very basic stuff—the kinds of things the U.S. markets were dealing with ten years ago. We want to go in and implement IAB U.S. and IAB Europe guidelines, and in that way strengthen the whole area.
The other, more selfish reason is to create a good information network and to extract all possible value from the network. We’re small IABs—most offices have one or two employees, primarily part-time and volunteer. So we need to be able to localize the experience and research of IAB U.S. and the other more developed markets, markets that are able to create educational programs, for example, and generate really complex market research. We want to use this knowledge—with those markets’ permission, of course—to push these smaller markets forward. That’s why we are organizing meetings and best practice exchanges—to gather content and know-how from the network in order to implement it on a local level.
Does CEE have a website?
Not really. I don’t know how many people you know from this part of the world, but I would say that we are a bit less formal in this sense. We go, we meet, and we’re not sending around CEE business cards or websites, but the real value is that we are friends. We’re friends on Facebook and LinkedIn and exchanging documents on Basecamp, so that if I have questions I can contact someone that I know personally. The response rate is very high—we always help each other out. The problem with more formalized systems is that they need to be maintained, and in my experience, that’s impossible without at least one dedicated person. It doesn’t work on its own. I believe that that’s part of your task, to encourage this exchange of information on a global level. Especially for the smaller IABs, it’s vital.
What’s happening within IAB Hungary that might be interesting or useful to the global IAB community?
Well, we’re a small, primarily volunteer organization, but our value is that we color a white spot on the map. In Barcelona, we talked a lot about creating a global ad spend study. I think it’s of great value to the whole network if you can pull relevant data from all of the small markets.
We’re proud of the fact that IAB Hungary was founded at the end of 2008 and now covers 92-94% of the online advertising market. We are a full-spectrum IAB: we have advertisers, tech companies, media, research, agencies. Basically we cover the whole interactive system. We’re also very proud that our working groups are very popular among our members. We have 65 members and eight working groups, with something like 60 or 70% participation rate in each group. We have groups on video, targeting, display, social, search, education, mobile, and we are going to have an expenditure group as well. They’re really great forums here within the market.
You mentioned that, as a small volunteer-based organization, IAB Hungary’s not able to produce a lot of research. Do you think that that will change once you become its first full-time employee?
Absolutely. That’s the goal. When we asked people to apply for the position of general manager of IAB Hungary, the intent was to grow the organization. Eventually we’d like to have three or four people working full-time on the betterment of the Hungarian online advertising market: creating events, becoming active in education, becoming more active in legislative processes, and promoting the industry as much as possible by developing clear and self-explanatory numbers for the market. We are fighting the same issues in that way, I suppose, that you are in the U.S. in that we have many numbers on the Internet, and it’s very complicated. So if we have a chance to talk again at the end of next year, IAB Hungary should be significantly different.
Do you have a first initiative in mind for when you become the GM?
What we really desperately need is to have someone visiting each and every member of IAB Hungary. That’s what I want to do first in August: visit all the members and map their needs and requirements.
What has been the major change or development that you’ve seen in the Hungarian market since IAB Hungary was founded in 2008?
Well, we experienced the financial crisis, so the big change is that we’re seeing growth. From 2008-2009 our market had 7% growth, and in 2009 we saw a 15.9% growth. And the share of the online market is now 16%.
Can you think of any challenges that you’ve faced in terms of market growth and development that are specific to Hungary?
The big challenge here is that we speak a very special language, and we’re a country of 10 million people. Our size is a challenge, for sure. And of course, handling the global players is always a challenge. For instance, we have a local social networking site, but now Facebook is taking over. So that’s an interesting challenge: adapting and cooperating and competing with these big global players.
And of course, as part of the European Union, we are dealing with legislation imposed by Brussels. We’re now fighting the cookie opt-in, opt-out issue. Along with IAB Europe’s initiative, here at the local level we are trying to push the local government to adopt the same values that they’re promoting in Brussels, in order to allow the industry to utilize cookie technologies and analytics.
So do you think that privacy a big issue in Hungary at this point?
Yes. Providing clear numbers to markets is an issue, privacy is an issue, and global players’ presence is an issue. I really think that these are the three main issues facing our market.
Have you found that your members are interested and active in mobile advertising?
Yes, we have a mobile work group that is gathering information. They want to publish materials on promoting advertising in that area. In our AdEx we’ve measured mobile ad spending—it’s not that significant at the moment, but we have a huge mobile penetration, around 100%, so there’s potential. But in terms of advertising we’re a bit behind.
Why do you think that is?
I think advertisers don’t know how to deal with it, how to use it to their advantage and create profit. Our mobile working group is having their second gathering in two weeks, and their main topic is how to measure mobile and discussing what kind of tools we have in the Hungarian market. And then, of course, the other part of our job is to educate advertisers about how to use these new tools more efficiently. We still have loads of text, SMS campaigns, even though people are using smart phones quite a lot.
You mentioned that there was a big dip in market growth in 2008-2009, and large relative increase in growth the following year. What do you think was IAB Hungary’s biggest accomplishment in 2010?
I think it’s been lobbying legislation, so that the regulators of Hungary don’t make it impossible to work within our market. Another major accomplishment was to create a new AdEx methodology, so that the numbers are more sophisticated.
We started our first education modules at IBS, a licensee of Oxford University. The modules are within a master’s in marketing management. It’s a pilot program in which IAB members are giving lectures, and a colleague from the board created the syllabus and course materials. They’ve been really successful.
And of course, the CEE study was done by Gemius with IAB Europe, and we were present at all of the big Hungarian events and, through my CEE activities, at most of the regional events. I may sound a bit selfish here, but I think that the CEE workshops were a big accomplishment for IAB Hungary, along with IAB Poland. I can’t say what the investment return is in these cases but I believe that having a great family around is a great value. You can share information with and invite speakers to come to events and send your members to other countries where you know the cream of the industry. I think it’s a great accomplishment, and that we are a leader in the region.
Is there anything that you are hearing consistently from your members in terms of what they want or need from IAB Hungary? What are the pressing issues for your members?
I would say it’s educating the market. Those of us who are putting effort into the IAB are following the trends in the U.S., the U.K. and the most developed markets, and then we come home to the Hungarian market, it’s a bit depressing. We’re thinking to ourselves, “There are sophisticated targeting methods! There are advanced ad serving features! Why aren’t you agencies and advertisers using them?” I think that’s the most frustrating issue for those of us involved in the online advertising industry. The market and the spenders are not aware of what can be done with interactive tools, and I believe that, in our market, the key thing to do is to educate and to promote. We want to say “Here are best practices, here are case studies, here’s the technology. Go! Don’t be afraid!”
And of course, like the bigger markets, getting brand money online is a big challenge as well. Helping brand advertisers to understand online advertising. We need to invest a bit more in the future.
Does IAB Hungary have events outside of professional development events at the moment?
What is that you hope to gain from this global exchange? What do you hope to teach others about Hungary and its market?
For me it’s absolutely the knowledge exchange. We recently had a chance to meet colleagues from Brazil, from Puerto Rico, from Vietnam, all kinds of places that are at a similar level as our market, and they had so many creative ideas and concepts that we can use. And I believe that we have some experience, some research and work from IBS that we can share, so I truly believe in this. I hope that we get to know everyone in the network eventually, and that this can be a motivating experience for me and for all of the IAB colleagues. I think it’s wonderful that if I have an issue or a challenge, I have many people of whom I can ask an opinion, and for me that’s the most important goal: to know the people that are doing the same thing as us and to form a community.
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