Adverising budgets have been under pressure for several years as the recession in Finland took hold. Last year advertising in newspapers dropped around 16 percent compared to the year before, which was in turn a drop on 2012. Magazines have also seen a fall in spending, as have commercial television and radio channels.
At the same time, online advertising spend has risen. In 2012 spending grew 10 percent compared to the year before, and 2013 saw the trend continue. Internet advertising now accounts for around a fifth of all advertising bought by Finnish companies.
”People’s media habits are changing,” said Birgitta Takala of IAB Finland, an association of firms involved in digital marketing. ”The digitalisation of advertising is boosted especially by mobile advertising and use of different kinds of videos.”
Finland still lags behind many European countries in the adoption of digital advertising. For example in Sweden already in 2012 some 24 percent of total advertising spend went on digital media.
”Digitalisation is quite a general trend globally,” said Takala. ”Finland isn’t an exception. On the other hand if you compare to other countries then Google’s share, for example, is greater than it is in Finland.”
Facebook and Google challenge status quo
Domestic advertising firms now face an unprecedented level of foreign competition, in the form of US firms Facebook and Google. They already have an established position in the Finnish market, accounting for around half the digital market. In reality their dominance could be even greater, as IAB Finland does not yet produce statistics on advertising via Google’s Youtube service.
Neither does IAB have records of Finnish companies’ purchases via Facebook’s geo-targeted services. Despite the US outfits’ dominance, Google at least is keen to take an even larger share of the Finnish market.
”We still have a lot to do on the digital side,” said Google’s country manager Anni Ronkainen. ”In Finland the digital marketing share last year was 20 percent while in Sweden it was 30 percent and in Great Britain it was 44 percent.”
Ronkainen says some Finnish firms have forgotten their customers. According to the Google manager, advertising should be where the customers are.
“Finnish consumers have in reality always been early adopters of technology,” said Ronkainen. “And unfortunately companies are a bit behind them, that’s just the way it is. In practice that means that in quite a lot of cases the consumer will switch to a foreign service.”
Digitalisation still in its infancy in Finland
The biggest media firm involved in producing adverts is Sanoma. The company says it is taking digitalisation seriously as well as capitalising on traditional revenues.
“On the digital side and especially in mobile, there are strong growth figures,” said sales manager Tero Huovila, of Sanoma’s television brand Nelonen Media. “And the same kind of growth is going to continue. In mobile the good thing is that in practice it increases media consumption—you have media with you all the time. It brings marketing-minded people really interesting options. The customer can be reached whenever and wherever they are.”
The transition to mobile also brings media houses certain financial challenges. Pricing has changed and media houses’ income has dropped, at least for the moment. Huovila claims that despite the changes, the future of media advertising is bright.
“Media houses are developing really strongly at the moment, especially in mobile,” said Huovila. “Via mobile usage media houses are getting more information about consumers and this data becomes a tool of doing business. In the future we can find the desirable consumers, for whom advertisers are willing to pay.”