This report covers the market developments in FY 2013, H1/2014 and the data available as of September 2014.

The Polish advertising market dropped by 5% y/y to approximately PLN 7.2bn (EUR 1.7bn) in 2013, maintaining the same y/y decline pace as in 2012, according to market data. The ad market has witnessed an increasing price pressure over the past two years, in the context of shrinking advertising budgets. Dailies and the outdoor channel recorded the steepest plunge in advertising expenditure in 2013, while the TV segment, which accounts for roughly half of advertising expenditure, also dropped by 3.5% y/y last year. The internet was the only segment that recorded positive y/y performance in 2013.

The situation on the Polish market is not different from the other countries in the region, where also advertising expenditures followed downward path in the past few years, paralleling the deteriorating global macroeconomic situation. Nonetheless, the situation showed signs of stabilization in 2013 and the ad market is continuously gaining confidence.

In H1/2014, the advertising market returned in the positive area, driven by the 5% y/y increase of the TV segment and the 6.5% y/y advance of internet advertising expenditures.

The Polish advertising market is expected to slightly recover in 2014 and record more noticeable growth in 2015. Prospects for the future are linked to the overall performance of the economy and the situation of the media market. The traditional media will predictably continue to face challenges and lose grounds to the internet, which has been growing at accelerated pace in the recent years.

Key points:

• Advertising market continues downward in 2013
• TV advertising market returns to annual growth in H1/2014
• Printed media continues losing grounds to digital publishing in 2013
• Number of cinemas increases in 2013
• Cinema ticket sales down y/y in Q2/2014, FY figures expected to remain at 2013 level
• EBRD sells 33% of its shares in Cyfrowy Polsat
• Britain's Cineworld buys entire cinema business of WSE-listed Cinema City