The Programmatic Globe: Czech Republic
Going deep on the programmatic scene in Prague and beyond
Here at Sociomantic, we’re lucky enough to get to work with marketers in over 70 markets, helping them from our offices around the globe to take advantage of the many benefits of programmatic advertising technology powered by local market expertise.
In working across these diverse regions, one thing has become crystal clear: when it comes to e-commerce and programmatic marketing, no two countries are alike. And no one has a better view on the differences and eccentricities of these different markets than our VP Global Advisory Services, Lothar Krause.
That’s why we’ve invited him, with support from each of our local teams, to share unique, market-specific insights about the ins-and-outs, the ups-and-downs, the triumphs and challenges of programmatic advertising in each of the countries or regions that we are stationed.
Next up: Czech Republic.
The Czech Republic — with its 10.5 millions inhabitants and area of 78,866 square kilometers — is a relatively small but very unique market. This country, located in central Europe and bordered by Germany, Austria, Slovakia and Poland, is known worldwide for its rich cultural heritage, from its famous beers to famous novels like The Good Soldier Švejk. The country is famous also for its characteristic sense of humor.
Czech Republic can also be distinguished by its online landscape. It’s especially worth mentioning two unique local heroes: first, Seznam.cz, with its impressive past as a the longtime leader of search engines in the market; and second, CPEX, the Czech programmatic publisher exchange that works for better programmatic deals and market education.
Between 1918 and 1992, the areas that are now Czech Republic and Slovakia made up one state, Czechoslovakia, and therefore the two countries still share a strong relationship based on that common history. You can see this relationship reflected especially in economy and business, as many companies from across many industries offer products and services in both countries. It’s standard for payment methods and shipping solutions supports these cross-border sales.
The Big One
For many years, the Czech internet landscape has been dominated by previously mentioned Seznam.cz, probably the most well-known web address in Czech Republic. Born in 1996, Seznam.cz continued to be the biggest search engine in the country for at least 15 years. Currently holding second position, just after Google, Seznam.cz remains biggest publisher in Czech Republic with more than 6 million users on desktop and almost 2.5 million users in mobile.
First Cooperation in the Market
The Czech online market is fairly advanced when it comes to programmatic adoption. One of main players in the market is CPEX, the Czech publisher exchange, which unites and represents premium Czech online publishers and reaches 85% of Czech internet users.
CPEX was one of the first players that was working hard to educate the market about this new media buying methodology since the early days. With great confidence, CPEX helped to build the local industry together with companies such as ourselves, paving the way for broader adoption of programmatic by advertisers and publishers alike. Cooperation with such middlemen can make life much easier for DSPs like Sociomantic, as in this case a single player enables simple access to a wide and truly diverse range of inventory.
The Czech Agency Landscape
Prague, the capital of Czech Republic, is the center for at least 90% of the online business activities. So it’s no wonder that most of international as well as Czech-founded agencies are also located in Prague. Although the market itself is dominated by big international players, several advertisers choose smaller local agencies that can offer more customized solutions and services and focus on campaigns performance.
After decades of traditional media buying, the agencies now understand the value of programmatic and appreciate the results this model can bring. Global agencies often use their own in-house programmatic trading desks for buying; for more advanced setups for enterprise-level advertisers with more specific needs, they partner with independent providers in order to deliver best results for their clients. Local or smaller agencies work primarily with independent DSPs and or independent trading desks, rather than building their own technologies.
Online Shopping Kingdom Goes Mobile
At 4.3$, the Czech Republic has the highest GPD among all Central & Eastern European countries. (The average GDP for CEE is 2.6%.) Therefore this country has one of the strongest local e-commerce markets in the region, with more than 4.3 billion euro turnover in 2015, and a 23.3% growth rate. Czechs do like online shopping: 70% of population is considered e-shoppers and country comes third (after Romania and Russia) highest average annual amount spent of digital purchase per digital buyer in the region, 681 euro. The products that internet users in Czech Republic tend to purchase most often are clothing, household electronics and information technology.
Czech Republic also has the highest smartphone penetration in CEE. According to eMarketer, 72.7% of Czechs are going to use mobile devices and 74.2% of these devices will be smartphones in 2017 (compared to global average of 61.2% is the average). Moreover, the adoption of in-app shopping is on the rise in Czech Republic, with 64% of customers who bought through a smartphone having purchased in mobile applications.
Even though these numbers are pretty impressive, brands in Czech Republic are still developing the mobile ecosystem and learning how reach their customers and prospects in this channel.
Overheard in Prague
Our Commercial Director Czech Republic & Slovakia, Lukas Pesek, shares his outlook on the future of the market:
“I’m extremely happy to witness Czech Republic being one of European champions in e-e-commerce, and to see that our country has the highest smartphone penetration and very high app sales for the CEE region. Surely these metrics open several opportunities for advertisers to reach their audiences through personalized, data-driven advertising. It seems that 2017 will be an exciting year for Czech’s e-business, with topics such as quality, transparency and customer centricity will define the market.”
Check out previous posts in the Programmatic Globe Series: