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www.mediafactbook.ro

editors foreword

www.mediafactbook.ro media bookwww.mediafactbook.ro

or the 20th anniversary of the Media Fact Book, we decided to take on a new challenge and reshufe theerspective we used so far when looking at the media market. Therefore, in this edition, instead of focusingnly on the key facts of last year and most likely predictions for the current one, we will try to take a peek at theture and see what it might hold in terms of media trends, what the next big things will be and how we canetter prepare as marketers for the next decades.

o start with the essentials, the study we have conducted on Romanians conrms what we already know foruite some time now, that digital is rapidly closing the gap to TV in consumers preferences .ut our aim is to go deeper and try to unveil the answers to a series of hows: how is this actually going toappen, how it will be different from one generation to another, how digital outlets are going to differentiate inerms of preferences and activities theyre used for, how traditional channels will be impacted and changednd how does the multi-screening experience look like for the Romanian consumers.

igital is going mobileand this trend is more visible as we look towards younger generations, with 76% ofrban 16-24 years old and 64% of urban 25-34 years old using for internet their mobile devices on a daily basis.

will still be a few years until these new generations will represent a signicant share of the active populationnd will comprise the vast majority of the commercial media targets. What is important to note, is that theyreill watching a lot of television, but digital video consumption is on a rise, revealing the shift from a strictrogramming grid to search and feed-based discovery, in the living room and across their devices. This trendill empower new kinds of content and advertising means, allowing brands to actually be able to have arong foothold on their own networks.

ut lets have a look at whats happening globally: Global digital revenues will reach 38% markethare by the end of 2017, surpassing TV (37%) to become the number one media category.obile advertising now accounts for 33% of total digital advertising and will reach 55% by 2018, following the

apid shift in digital media usage and planning strategies.

he global trends with regards to digital and mobile usage are becoming more and more visible in Romania, asell as the trends regarding frequency and means of usage. As our study shows, we are already a digital savvy

market, but still there are gaps to be closed. Nevertheless, this environment presents a huge opportunity for

cal marketers, as they can not only observe what is happening abroad, but also extract the most meaningfulsights and best practices, while speeding up the evolution and expertise at local level. One example cane related to multi-screening habits, with social networks being accessed by 77% of urban6-54 years old while watching TV.This creates the premises for more integrated communicationolutions, an already visible development producing great results for the main talent shows on the market.

we look at the past and present of the Romanian media market evolution in terms of the shares achievedy each medium, we can see that advertising budgets have followed the consumers media preference and

content needs. If in 2005 the investments in digital media represented 1%of the total net media market estimate, ten years later, in 2015 it reaches17%. Having in mind that the digital native generations are growing olderand internet is their rst media of choice, we can easily predict that in 2025Digital media will have up to 35%-40% of the advertising revenues in themarket.

The same rational applies to mobile advertising investments, as weestimate mobile to represent 25% of the digital advertising investment in2015. Mobile is expected to have the most dynamic growth and reachover 60% of the digital investment in 10 years now.

Another example can be tied up to the foreseen evolution of traditionalsocial platforms and the switch that the younger generation is beginningto make towards new forms of social connection, such as messagingapps, where they nd a more private means of communication with thei rpeers.

Keeping an eye on the developed markets is also worth it when analyzingthe threats of this new landscape, to better manage them at local level.

The increasing usage of ad blocking systems happening on the other sideof the ocean can easily be foreseen and ultimately avoided by focusing oncreatinghigher quality content as a premise for subscriptionsgrowth and seamlessly embedding native ads into this content.

For sure, subscriptions for digital content would feed media publisherswith more revenue and they would be able to bring more quality to theirdigital products, of which, the consumers will benet the most. But weare not talking only about subscriptions to written content but also forsubscriptions to video content which will create in time competition totraditional TV.

We invite you to discover all the above as well as other surprising piecesof consumer information in this years new chapter Future Media Trends.

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www.mediafactbook.ro

Mediabrands

About Mediabrands

Mediabrands was created by Interpublic Group (NYSE:IPG) in 2007 to manage all of its global media relatedassets. Today Mediabrands manages and invests $37billion in global media, employs over 8,500 diverse anddaring marketing communication specialists and operatesin over 130 countries.

A proven entity in helping clients maximize business resultsthrough integrated, intelligence-driven marketing strate-gies, IPG Mediabrands is committed to driving program-matic buying, pay-for-performance and digital innovationsolutions through its network of media agencies Initiative,BPN and UM. Its roster of specialist service agenciesinclude MAGNA GLOBAL, Ansible, Mediabrands Publish-ing, IPG Media Lab, Ensemble, Identity and offer technolo-gies and industry moving partnerships that are recognizedfor delivering unprecedented bottom line results for clientscorroborated with creative accolades at the most presti-gious Festivals in the World.In Romania IPG Mediabrands consolidates over 25%market share being the most powerful international mediagroup. With over 100 media specialists, IPG MediabrandsRomania manages the media activities of a wide array ofblue-chip clients in most categories: telecom, finance,automotive, soft drinks, food, retail, DIY, beer, alcoholicdrinks, IT & technology, cosmetics, etc.

Fast, Brave, Decisive, Simple

Initiative is a collection of over 2,800 amazingand talented people in 70+ countries.I believe that when people are having fun, theyare at their highest creative potential. AtInitiative we are bringing fun and games backinto the business equation.FBDS.

Jim Elms, Worldwide CEO, Initiative

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media bookwww.mediafactbook.ro

verviewhe TV and Digital dominance is more and more visible in the media markets across the region. With theontinuously shifting audiences and consumption habits, media planning is a more integrated approach meant toupport brands engage their potential customers during a less linear path to purchase.

he Analysispositive economic evolution marks the region - while in Central Europe growth is expected to remain robust, in

outhern Europe a recovery is nally taking hold and economies are rebalancing to more durable growth sources,o undo the damage caused by recession.

t the same time, EU countries are currently facing multiple risks: the refugee crisis which is severely testinguropes ability to coordinate its policies effectively, while UKs intention to exit the EU reveals the politicalomplications in the European integration process.

he impact on the CEE media markets is still visible in most of the countries, different patterns being observed inrms of media spend / capita evolution vs. 2008.

bania and the Czech Republic remain the only countries where the media spend /capita has a strong positiveynamics of +20-25%, correlated with a positive economic trend.

ulgaria and Slovakia registered a marginal media investments increase, boosted by a positive economicerformance, while Bosnia & Herzegovina, Montenegro and Slovenia media markets evolution brings themghtly below the levels before the crisis, with a decrease below 10%.

he large majority of the countries reect decreasing rates up to 40%, showing that advertisers are still cautiousith their marketing investments in the region, acting with prudence in a volatile economic and poli tical context.

espite the positive economic evolution in Poland, the advertising market still reects a strong negative correlation,0% below 2008.

The impact on the Polish media market was generated by the global companies decision to cut marketingbudgets in Poland to save money loss caused by the signicant drop in other European countries. When themedia market started to slowly recover in 2010 - 2011, the economy was hit by the second wave of the EU crisis,as a signicant share of Polands exports are to European countries.

The CEE media market size map remains unchanged, with large markets like Poland and the Czech Republicgathering yearly over 1.5 billion EUR in net value, medium markets like Hungary, Romania and Slovakia withrevenues of over 295 million EUR and the rest of the countries with less than 250 million EUR net investments.

24.7%

-5.0%

3.1%

-40.2%

21.0%

-11.8%

-20.0%

-5.1%

-21.1%

-39.4%

-24.1%

2.1%

-6.7%

%

%

%

AlbaniaBosnia &

Herzegovina Bu lga ria Croa tia Czech

RepublicFYRMacedonia Hungary Montenegro Po land Romania Se rb ia S lovakia S loven ia

Net Market Spend per Capita Evolution (%) vs. 2008

2 009 2 010 2 011 2 01 2 2 01 3 20 14 20 15Source: Local IPG agencies

2 00 9 2 01 0 2 01 1 2 01 2 2 01 3 2 01 4 2 01 5

32 33

204 187

1,520

35

533

9

1,782

327

156

297

140

0

500

1,000

1,500

2,000

2,500

Albania Bosnia &

Herzegovina

B ul g ar ia C roata Czech

Republic

FYR

Macedonia

H ung ar y Monte neg r o Pol and R omani a S e rbia S lovak ia S love nia

Net Market Size Evolution (mil. EUR)

Source: Local IPG agencies

73%

70%

63%

52%

41%

66%

45%

57%

50%

64%

54%

46%

52%

9%

6%

14%

9%

24%

8%

11%

10%

25%

18%

12%

29%

11%

4%

10%

8%

20%

21%

6%

28%

13%

8%

5%

20%

12%

16%

1%

5%

5%

9%

8%

6%

3%

2%

9%

6%

5%

5%

5%

12%

8%

10%

9%

6%

14%

11%

17%

7%

9%

10%

9%

16%

1%

1%

1%

1%

0% 100%

Albania

Bosnia & Herzegovina

Bulgaria

Croatia

Czech Republic

FYR Macedonia

Hungary

Montenegro

Poland

Romania

Serbia

Slovakia

Slovenia

TV Di gita l Print Rad io OOH Other

Media Mix - 2015 Shares

Source: Local IPG agencies

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he increase of the Digital share in the media mix is most visible in Slovakia, Poland and the Czech Republic,here it exceeds 20% of the total market media budgets. A signicant growth was registered also in Romania,ungary and Macedonia where the Digital media budgets increased by 2 percentage points vs. 2014.

enerally, TV retains high shares of spending between 50% and 60% in most countries with signicant outlierseing Albania and Bosnia & Herzegovina where the TV share exceeds 70%, while at the opposite point areungary and the Czech Republic with 45% or less.

rint retains over 20% of media market share in Hungary, the Czech Republic, Croatia and Serbia.

adio generally has a low share throughout the region, with the exception of Poland and Croatia, where it reaches%. In most of the countries, Radio shares are stagnant.

enerally speaking, in the region, the share of TV in the media mix tends to correlate with the ATS (average timepent viewing), the only notable exception being Albania. Romania, Bosnia & Herzegovina and Serbia have theghest level of ATS on commercial targets, while Slovenia and the Czech Republic the lowest.

l the countries in the region have an urban Internet penetration of over 60%, rather stable compared to 2014, withe exception of Poland, Slovenia, the Czech Republic and Bulgaria which show a considerable growth.

terms of daily usage, the usage map is quite heterogeneous with countries like Romania, Slovenia, Poland anderbia having over 65% at urban level, and Montenegro and Albania with less than 50%.

The need for connection and self-expression continues to grow, increasing the number of Facebook users acrossthe region. With the exception of Serbia (33%), throughout the region, the number of Facebook users amount toover 40% of the total population of each country. Also, Facebook users amount to more than 60% of the Internetusers across all the countries in the region.

64%

75%

82%

78% 8

2%

72% 7

6%

77% 7

9%

71%

70% 7

5%

88%

44%

57%

63%

61%

61%

54%

62%

47%

66%

79%

65%

64%

72%

Albania Bosnia &

Herzegovina

B ulga r ia Croata Czech

Republic

FYR

Macedonia

H unga ry M ontenegro P oland R omania Serbia S lova kia S lovenia

2015 General Internet Statistics

Urban Reach Urban Dai ly UsageSource: Local IPG agencies

4.

6

6.

5

4.

2

4.

2

3.

5

5.1

5.0

4.5

4.

4

6.8

5.6

4.0

3.3

4.

6

6.0

3.2

3.3

2.

5

3.

8

3.

7 4.1

3.5

5.8

4.1

2.9

2.3

Al ba ni a B os nia &Herzegovina

B ul gar ia C ro ata CzechRepublic

FYRMacedonia

Hun gary Montenegro Poland R omania Serbia Sl ovak ia Slov enia

2015 Average TV Viewing Time (hours / day)

Source: Local IPG agencies 18+, Urban 18-49, Urban

50%

42%

44%

46%

43% 4

8%

44% 5

3% 6

8%

42%

33%

43%

43%

83%

61%

74%

63%

66%

69%

82%

82%

84% 8

7%

77%

65%

68%

Albania Bosnia &

Herzegovina

Bulgaria Croata Czech

Republic

FYR

Macedonia

Hunga ry M ontenegro Pol and R omania Serbi a S lova ki a S loveni a

2015 General Facebook Statistics

1.4 1.6 3.3 1.8 4.5 1.0 4.4 0.3 19.4 8.4 2.4 2.3 0.9

% of Populaton % o f Int ernet Use rs FB Use rs (m il .)

Source: SNA Focus, BRAT Romania, All 16-54 urban p opulation

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erspectives for 2016

he positive economic forecast for the CEE region is expected to generate increasing consumers incomend expenditures and the local media markets are predicting at least a marginal increase for 2016.

V will continue to hold leadership, as it still provides a cheap source of entertainment for the population,eing at the same time a cost efcient medium for the advertisers.

igital media is expected to remain the most dynamic advertising revenue driver, as Internet usage willontinue to grow in all CEE countries, dr iven by the more affordable gadgets and mobile services providedy telecommunications companies.

CEE COUNTRY PULSE

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he Romanian economy will grow by more than 4% in 2016, faster compared with 2015, evolution supportedy the accelerated growth of the household consumption, due to the wage increases, the VAT decrease for foodroducts (from 24% to 9%) and for general goods (from 24% to 20%), but also to the lower interest rates, which

made available new funds for various acquisitions.

he household consumption will grow by 6-8% this year, a signicant higher rhythm compared with manyountries in the European Union.

he increase of the minimum wage from RON 700 to RON 1,250 in the past four years meant a relief forouseholds and for the economy, and is one of the positive things which happened in the past years. The average

monthly wage neared RON 2,000, compared with RON 1,600 in 2012.

or almost three years, Romania has been one of the fastest three growing economies in the European Union,hich is ghting to avoid a prolonged stagation.

omanias GDP managed to reach again the 2008 level, of RON 150 billion, after ve years of crises, marked byax increases and wage decreases.

owever, regarding the overall payroll, Romania still has to recover EUR 2 billion in order to reach the pre-crisisvel: in 2008, the overall payroll was EUR 54 billion, only to decrease to EUR 48 bil lion in 2010. The overall payrollrew to EUR 52 billion in 2014.

though the economic sentiment among the consumers improved, the economic growth is not evenly distributed.here are areas and counties with an accelerated growth, while more than half of the country confronts with theck of investments, especially on behalf of the state, and with the migration of the workforce in other countries, or,the best case scenario, in the big cities in Romania.

Bucharest, Cluj or Timisoara registers an annual economic growth of over 10%, there are counties in Moldova orltenia which dont mark any economic growth from one year to another.

acroeconomic indicators are in a good shape, starting with the ination rate, which would be negative in the rst halff the year, and ending with the current account decit, which is covered by the exports of services, IT and transports.

he Romanian industry is dependent on exports, especially by external demand from Germany, France and Italy.he investments in automotive industry continue, given that Romania is a good market for the large global autoroducers.

industry is boiling, the demand largely exceeding the capacity of the market to deliver projects. Therefore, therea strong competition to attract programmers, which led to substantial wage increases.

Without consumption,there is nothing!Cristian Hostiuc,Editorial Director Ziarul Financiar

The constructions, an economic sector strongly hit by the crises, have recovered, at least in the segments ofresidential and ofce buildings. All real estate developers depend on the state guarantee scheme Prima casawhen developing new apartment buildings. There are only a few projects of ats over EUR 100,000. Prima casascheme guarantees up to EUR 60,000.

The banks, strongly hit by the crisis, started to clean their balance sheets and to recover their protability, butmainly due to lower provisions, not to the operations improvement.

The lower taxes, the wage increases and the decrease of the interest rates for loans denominated in lei lead toan accelerated growth of the imports and to a larger trade decit. However, this isnt a problem for Romania

anymore, if we take into consideration the surplus on the services side.Due to the decrease in the ination rate and to over-liquidity on the money market, RON interest rates signicantlydecreased to below 1% per year, an unbelievable level back in 2012, when the interest rates were 6-8%.

The customers returned to the banks, following the drought in the crisis period, and the consumer credit currentlygrows with more than 20% per year, a very high rate. The National Bank of Romania hasnt implemented restrictionsto temperate the growth of the retail credit so far, considering that the commercial bank still have room for maneuver.

Although the nancing cost is at a historical minimum, both in RON and EUR, many companies dont assumenew investments, other than the ones really necessary.

The Romanian entrepreneurs with a solid nancial situation think ten times before assuming any new investments, becausethey try to avoid the irrational exuberance experienced before the crisis, and which impacted them during the crisis.

The multinational corporations preserve their position in Romania and are not willing to accelerate.

In several sectors, especially in retail, market consolidation take place, the weak players come out of the market,while the strong ones become stronger.

The exchange rate is very stable, around RON 4.45-4.48/EUR, and no analyst anticipates higher uctuationwhich could raise question marks.

Foreign investments began to register a more sustained recover after the crisis period, the amount forecasted for2016 reaching EUR 3 billion, with EUR 1 bi llion more compared with the previous years.

The only fears related to the macroeconomic indicators regard the state budget decit and the public investments.Romania assumed a budgetary decit amounting to 3% of GDP in 2016, a level difcult to reach given the wage

increases pressures, characteristic to an electoral year.The price for tting into this decit level is lower public investments, which are postponed or even canceled. Inturn, this affects the Romanian private capital, which lived off these public investments.

The Romanian entrepreneurs who got over the crises period currently try to consolidate their operations, andmany already sold their businesses or are considering this option because they feel that they dont have enoughpower to go through another economic cycle.

Despite the shows on the political scene, the Romanian economy managed to partially detach from thegovernment decisions, a trend which will continue. If the consumption growth slows down over the next years,everyone hopes that the public and private investments would support the economy.

We will see if this is the case.

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verview

urrently, the online media channels consumption is growing rapidly around theorld, in UK, for example consumers allocate 45% of their total daily time spentith media to Digital vs. 33.6% to TV, and the trend is the same in most Westuropean countries (source: eMarketer 2015).

ur country seems to follow the same trend, with Digital overtaking the traditionalmedia, but TV consumption holds strong. For sure, the landscape will change

gnicantly in the future, because if we look ahead 10 15 years from now,

gitally natives, will become the main income earners in our society and all theenerations to come will have profoundly different media habits than their elders.

s off-line activities tend to become more and more online routines, the digitalontent quality and capability to generate consumers experience is the key touccessful publishers business in the not so far future.

s messaging is at the heart of the social experience of urban 16 34 years old,essaging Apps seem to be the next big thing in digital media, giving them arivate, permanent real time connection to their community.

Market Analysis

In Romania, TV continues to be the most used medium at a signicant 10% gap ahead Digital .The daily media consumption routine shows TV and Internet as the most used media channels,with Internet outperforming the other tradi tional media, due to its easiness to access any kindof information and facilitate instant connection to friends or business community.

2015 Daily media consumption

Source: SNA Focus, BRAT Romania, All 16-54 urban population

11.6%

6.1%

64.3%

35.1%

74.6%

1.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Newspaper s Magaz in esInternet RadioTV Cinema

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evertheless, average gures do not tell the whole story, a breakdown by age groups proves that media habitsre generational , signicant shifts being noticed from one age group to another.

rban Romanians continue to reflect significant traditional media usage, with TV scoring high amongl age groups and the 90% TV consumption among youngsters 16-24 confirms the heavy TV viewingpecifics for our country. Still, media usage shifts are obvious from one generation t o another, with verygh Internet and smartphone usage among youngsters, very high TV consumption for 45+ and stillonsiderable TV daily usage for 35-44 years old.

he 25-44 adult s represent 29% of the total population and are the main income earners in our society.heir sign ificant ly different media habi ts represent a continuous challenge for brands, which need to beexible and adapt to their consumers media consumption shift.

urrently, 18 45 age group is the most targeted in media communications, while TV channels, forxample sell for decades their audience inventory on urban 18-49 years old broad target group. They alleem to miss the fact that th e population aged 45-47, which represent significant numbers will be soonutside their commercial effort area.

espite the current high TV usage habits, Digital media consumption level has increased significantlyuring the last years. Although the access from the PC or laptop remains the most preferred, mobileevices as smartphones and tablets are growing rapidly, with internet access on smartphone having

he most dynamic evolution (50.2% in 2015 vs. 26.4% in 2011).

The smartphone is already embedded in our lives, still, its frequent usage is signicantly more pregnant in thedaily routine of urban 16-24 and 25-34 years old. It keeps them in reach 24 hours per day, check it rst thing in themorning and before going to bed and when they are on the move.

Source: SNA Focus, BRAT Romania, All 16-54 urban population

2015 Media type consumption by age groups

90% 95% 98% 99% 96%

21%25% 29%

31% 27%9%

13%14% 14% 13%

57%64%

67% 64%64%

76%64% 39%

20% 48%

96% 92%

79%

62%

81%

aged 16 -24 aged 25-34 aged 35-44 aged 45 -54 al l 16 -54

Go online on any device(daily)

Go online onmobile/smartphone (daily)

Listen to the radio >1h/day

Read ne wspapers (daily)

Read magazines (monthly)

Watch TV >1h/day Source: SNA Focus, BRAT Romania, All 16-54 urban population

77.9% 78.9%

72.1%

6.3%9.5%

19.6%

26.4%33.0%

50.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2011 2013 2015

PC Tablet Smartphone

2011-2015 Digital access

Smartphone usage habits: answer Agree

89.7%

89.6%

38.9%

92.0%

0 % 2 0% 4 0% 6 0% 8 0% 1 00%

aged 16-24

90.9%

89.4%

56.6%

89.1%

0% 20% 40% 60% 80% 100%

aged 25-34

First thing in the morningI check my smartphone


My smartphone neverleaves my side

It happens to check mysmartphone while I am driving

It happens to check mysmartphone before I go to bed




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he smartphone supports during the day a wide range of activities, from wake-up alarm, to organizing thegenda, reading news, checking the weather forecast, sending e-mails or connecting with other people onocial networks. The differentiation in generational habits is very visible here also, with younger generations usinge smartphone mostly for Facebook, while elders nd a more practical use to their devices, such as e-mailorrespondence.

If we look at the past and present of the media market evolution in terms of the shares achieved by each medium,we can see that advertising budgets have followed the consumers media preference and content needs. If in2005 the investments in digital media represented 1% of the total net media market estimate, ten years later, in2015 it reaches 17%. Having in mind that the digital native generations are growing older and internet is their rstmedia of choice, we can easily predict that in 2025 Digital media will receive up to 35%-40% of the advertisingrevenues in the market.

The increasing online budgets from one year to another reects the understanding of the market needs for internetconsumption and the alignment with the PC, tablets and mobiles sales.

The natural shift from xed devices towards mobile internet connections is conrmed by Ancom gures, whichreect a signicant growth in terms of mobile connections during the last three years, while the x broadbandremained almost at the same level.

urce: Initiative & Mercury Research, all 16-54 urban population

51.9%

51.9%

37.2%

33.7%

11.9%

18.9%

0% 20% 40% 60% 80% 100%

Facebook

Alarm

E-mail

Weather

News websites

ctivities agenda

aged 16-24

55.9%

62.2%

57.7%

46.5%

21.9%

26.0%

0% 20% 40% 60% 80% 100%

Facebook

Alarm

E-mail

Weather

News websites

Activities agenda

aged 25-34

44.1%

42.2%

46.3%

29.5%

19.8%

24.4%

0% 20% 40% 60% 80% 100%

Facebook

Alarm

E-mail

Weather

News websites

ctivities agenda

aged 35-44

32.5%

35.0%

45.3%

33.1%

21.7%

21.2%

0% 20% 40% 60% 80% 100%

Facebook

Alarm

E-mail

Weather

News websites

Activities agenda

aged 45-54

Smartphone usage habits: answer Often to

In the morning, what do you check on your smartphone?

urce: Initiative & Mercury Research, all 16-54 urban population

78.9%

81.7%

39.9%

79.1%

0% 20% 40% 60% 80% 100%





It happens to check myartphone while I am driving

It happens to check mymartphone before I go to bed

aged 35-44

67.6%

71.7%

33.7%

72.2%

0% 20% 40% 6 0% 8 0% 1 00%



aged 45-54

0

10

20

30

40

50

60

70

80

90

100

Source: Initiative estimates

Increasing trend of online investment

57%62% 63% 62% 64%

66% 65% 64% 63% 63% 64% 64%

24%19% 16%

15% 11% 8% 8%7% 6% 6% 5% 4%

6% 6%6%

6%7% 7%

6%6% 6% 6% 6% 6%

11% 11% 12%13%

12%11%

10%10% 9% 9% 8% 8%

1% 2% 2% 3% 6%8%

11% 14% 15% 16% 17% 18%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 est

Internet OOH Radio Print TV

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n important factor that supported this evolution was the high connectivity speed available in Romania for internetonsumers (Akamai Q3 2015 report places Romania in Top 10 worldwide).

or sure, subscriptions for digital content would feed media publishers with more revenue and they would be ableo bring more quality to their digital products, of which, the consumers will benet the most.

this respect, although Romania is still behind other European countries, with 70% of urban16-54 years old notaving any video platform subscription. Nevertheless, the sustained investments coming from TV stations andobile telecommunication operators are already reected in increasing adoption rates.

mong the preferred video platforms are HBO GO, Orange GO and Voyo, still, some of these subscriptions aremost likely part of integrated service packages from the mobile telecommunications providers.

hort term, video streaming subscriptions trend is expected to have a relatively stable evolution and the goodews is that almost 20% of urban 45-54 years old intend to subscribe to a video platform in the next 6 months,hich means that not only younger generations tend to switch their TV viewing activit ies, online.

Multi-screening is already a wide scale media habit in urban Romania, with people being used to oftenconsume several media at the same time. Watching TV and connecting online are complementary, withmore than 75% overlapping.

Generally speaking, HBO GO, Voyo, Netflix, Orange GO and Antena Play are the fir st preferences ofthose who intend to subscribe to a video platform during the next 6 months.

TV viewing will cont inue to shi ft from trad itional viewing towards becoming an onl ine activ ity. Although81% urban 16-54 years old consumers continue to watch TV at home, through a cable or satelliteconnection, over 20% of them are currently watching TV at home, on a TV set connected online or TVthrough their mobile devices (smartphone or tablet) using either mobile internet or a Wi-Fi connection.

Source: Initiative & Mercury Research, all 16 -54 urban population

Do you intend to subscribe to a video platform

in the next 6 months?

6%

12%

12%

20%

13%

65%

60%

54%

58%

58%

29%

29%

34%

22%

29%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

aged 16-24

aged 25-34

aged 35-44

aged 45-54

aged 16-54

Yes No I have subscription

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

Source: Ancom

Internet connection type (Million)

2010 2011 2012 2013 2014

Broadband fixed Mobile

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Source: Initiative & Mercury Research, all 16-54 urban population

TV watching habits

81%

21%

33%

18%22%

16%

1%

9%

home, TV cable or

satelite

home, TV

connected online

with fix internet

(cable, wi-fi)

home, PC / laptop

connected online

with fix internet

(cable, wi-fi)

smartphone or

tablet with mobile

internet

smartphone or

tablet with wi-fi

connecton

PC / laptop with

mobile internet

other don't watch TV

4 25

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we try to look into the future, we denitely see more off-line activities and media habits becoming digital routines,ut the consumers experience is different in digital compared to traditional media. The quality of the content is thegredient which will denitely make the difference and publishers which will focus on consumers experience andhoice will denitely win, long term.

aving a look at what content consumers choose to have today, might give them a hint of what they need to doo improve. Especially because watching / downloading digital content is what urban 16 34 years old do forntertainment and movies / shows, games, music and apps are the topics that interests them the most.

As free content is the most consumed, only a major improvement in quality has the potential to boost subscriptionsin the years to come.

With a better content, the ad-blocking trend will diminish, as people will choose to view ads from publishers andplatforms they like or subscribed at.

Compared to other European countries, in Romania ad-blocking is low, reaching currently less than 14% of theonline users, and with 18% of them intending to install such a system in the near future.

Yes

14%

No

86%

Do you have an ad-blocking software

installed on your computer?

Source: IAB Romania, Ad-blocking study 2015

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


Other activities while watching TV (daily),

answer often

77%

18%

80%75%

78%

Access FB / other

social network

Read magazines,

newspapers (print)

Talk on mobile

phone

Search info on the

internet (news,

weather etc)

Check e-mail


In the last 3 months which of the followingonline activities did you do?

30% 30%52%

77%

47%

45% 39%20%

11%

28%

41%29% 25%

10%26%

47%

28%13%

23%

37%

27%

16%21%

29%

20%

12%15%

21%

16% 12%

14%

13%

aged 16-24 aged 25-34 aged 35-44 aged 45-54 aged 16-54

Downloaded books Re ad bo ok s D ow nlo ad ed ap ps f o r P C/ la pto p Downloaded movies /series/shows Downloaded games

Downloaded apps for mobile Downloaded music Played games W at ch ed m ov ies / se ri es /s ho ws N on e

The interests category are affected differently by ad-blocking: sport, TV guides and News are the mostaffected, being also the most targeted by the advertisers. According to the IAB Romania ad-blocking study,

the main reason for ad-blocking is that some of the advertising formats are perceived as being very aggressive.Nevertheless, advertising on categories like arts and culture, education, health and personal care are considereduseful and therefore, less annoying.

In line with the media habits, generations tend to use their mobile devices differently: if older generations activitiesare limited mostly to e-mail check, info search and checking on Facebook, the digitally native generations tend toread almost everything online, listen their favorite music online, order food and shop online.

At the same time, for younger generations, messaging is at the heart of their social experience, as they need a realtime and private way to chat with their friends. As parents are now among their friends on Facebook, Messaging

Apps seem to be the next big thing in digital media, with an average daily usage of more than 65% among urbanonline users aged 16-34.

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Daily online activities on smartphone / tablet

84%

94%

80%

83%

85%

92%

93%

73%

69%

81%

80%

78%

66%

74%

74%

64%

53%

38%

34%

46%

50%

54%

38%

23%

41%

55%

45%

46%

38%

45%

23%

33%

20%

29%

27%

80%

65%

49%

46%

58%

70%

64%

41%

37%

51%

ed 16-24

ed 25-34

ed 35-44

ed 45-54

ed 16-54

Check e-mail

Check Facebook

Search info (weather, news etc)

Listen music

Watch movies / clips

Watch TV shows

Play games

Read e-books

Acces maps / navigation

Talk using apps (FB, skype, What's app etc)

Chat using apps (Yahoo, Viber etc)

Order online (taxi, food etc)

Shop online

Online payments

ost used messaging apps are so far WhatsApp, Facebook Messenger and Skype, with higher usage amongoungsters for Facebook Messenger and Viber.


What mobile apps do you use?

30%

30%

52%

78%

48%

45%

38%

20%

11%

28%

40%

28%

24%

9%

25%

47%

27%

13%

23%

36%

26%

16%

5%

21%

28%

17%

11%

14%

21%

15%

11%

21%

16%

aged 16-24

aged 25-34

aged 35-44

aged 45-54

aged 16-54WhatsApp

Facebook MessengerSkype

Viber

BBM

Nimbuzz

Others

Don't use mobile apps

Will ads in paid apps be viable in the future? Our optimism is moderate, because 50% of the currentapps users declared they are bothered by these and younger groups rejection of in-apps ads is h igher.

This means that the potential exists, but the commercials have to be native, blended blend in the content and less

aggressive than they are today.

In a 10-15 years time span, media consumption in our country will be fundamentally different from what we seetoday, as digitally born generations wi ll grow older, becoming the main income earners in the society. They will thenbe prime prospects of the media channels bus inesses and these will have to adapt their offering to match the newcontent consumption preferences and choices.

But we do not have to worry, what we call today traditional media will not disappear, it will turn gradually to easilyaccessible content available online.


I am bothered by the commercials which appearin the paid apps on my mobile

Answer agree

59%55%

52%

37%

50%

0%

10%

20%

30%

40%

50%

60%

70%

aged 16-24 aged 25-34 aged 35-44 aged 45-54 aged 16-54

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verview

he end of 2015 was the conrmation that the media market is on a stable growth trend. Over the last years theotal market oscillated between 309 Mio euro in 2011 and 305 Mio euro net in 2013, had a boost to 313 Mio euro

2014 and reached in 2015 its after crisis peak of ad revenues at 332 Mio euro (6% growth vs. 2014). The totalmarket is expected to consolidate its upward trend in 2016, by keeping the same growth rate of 6% vs. 2015.

Market Analysis

For Television2015 was the 2nd year of growth. In terms of total inventory TV market recovered reecting +7%GRPs sell out vs. 2014 and an average loading of 86% all day vs. 74% in 2014.

CME remained leader with 48.3% share of advertising revenues, followed by INTACT with 26.4%, Dogan Media10% and Prima Broadcasting Group 3.4%.

In terms of ratings performance, 2015 registered same top 3 as in 2014: Pro TV leader, followed by Antena 1and Kanal D and talent shows continued to dominate TV programming, Romanian got talent and Vocea of

Romania, broadcasted by Pro TV, being the most watched.

Digitalmedia maintained an increased trend, with +12% vs 2014. The trend was given by increasing revenuesfrom Google and Facebook properties and a slight downtrend for standard display.

Romanian internet penetration maintained a growing trend in 2015, reaching up to 65% of total population, withan increase of 4% vs previous year, while ages split remained stable, according to INSSE 2015.

Most frequent online activities remain steady or have a slow decreasing trend - like search for info (80% vs 84% in2014), email (73% vs 76% in 2014), while watch video had a signicant grow with 7.7% vs 2014 (from 66% to71%).

From social consumption perspective we bold the still lower mobile connectivity (87% of Romanians monthlyactive users connect on mobile to Facebook vs 91% globally), while the frequency is signicant higher with 76% ofmonthly active users returning daily to Facebook vs 66% globally).

OOH market had a at evolution vs. 2014, the net OOH advertising budgets being of 28 Mio euro. In 2015, pricesseemed to be more stable, despite the continuous clients pressure for higher discounts. On the other hand,major categories like Telecommunications, FMCGs, Retailers and Automotive continued to allocate signicantbudgets to OOH advertising, permanently expanding and improving the visibility of their networks.

In 2015 the advertising industry, under BRAT, took a very important step in the development of the FrequencyStudy on Outdoor advertising, complementary to the already existing OOH Monitoring System. All the necessary

resources have been put together behind this project; most procedures and the budget have been approved.

Radio market increased marginally in advertising revenues (5% vs. 2014). The market structure continues tocover several content typologies, covering the preferences of a wide range of audience proles.

In 2015, the daily radio audience improved at urban level, during both weekdays (+0.8%) and weekend (+0.6%),while in Bucharest, daily reach grew by 1.6% in weekdays and dropped with almost the same level in weekends.The Radio channels audience performance reconrmed in 2015 Radio ZU as the leader in Bucharest with 15%average rating and Kiss FM as leader at urban level, with 13%.

AG Radio Holding (former MGSI) maintained 1st rank despite the 1% decrease in ad revenues share, followed ata signicant distance by Media Camina Group with a stable 22% share.

2015, TV was the engine that drove the total market growth, increasing by 7% vs. 2014, from 198 Mio euro to12 Mio euro. Besides TV, other media channels were also on growth: Online, from 51 Mio euro to 57 Mio euro

+12% vs. 2014) and Radio, from 18 Mio euro to 19 Mio euro (+5% vs. 2014). OOH kept a at level at 28 Mio euro,hile Print was the only channel to drop, from 17 Mio euro to 16 Mio euro (-10% vs. 2014).

Source: Initiative

Total net Ad-spend by medium (Million ) - Estimation

2008 540 337 82 35 70 16

2009 345 222 37 25 42 19

2010 316 209 26 21 33 26

2011 309 200 24 20 31 34

2012 303 193 22 19 29 41

2013 305 193 19 19 28 46

2014 313 198 17 18 28 51

2015 332 212 16 19 28 57

2016 est 351 225 14 20 28 64

TOTAL (Mil ) TV Print Radio OOH Internet

332

212

16 19 2857

0

100

200

300

400

500

600

Source: Initiative

Market share in 2013-2016 (net ad-spend by medium)

63% 15% 9% 6% 6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2013

2014

est 2016 TV

Internet

OOH

Radio

Print

64% 18% 8% 6% 4%

64% 17% 8% 6% 5%2015

63% 16% 9% 6% 6%

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rint market continued to drop, being inuenced by the continuing decline of the press distribution networks andnancial difculties of Zirkon Media, one of the biggest press distributors. In terms of gross (rate card) advertisingevenues, Ringier was ranked 1st, followed by Adevarul Holding and Mediafax. 2015 reected slightly differenteadership trends among the print types, with a 5-6% drop for dailies and less than 4% drop for weeklies.

op Investors

015 main categories are similar to 2014, with Mobile telecommunications, Medical products & services and

Cosmetics, hygienic, hair care & cleaners reecting the highest estimated net media investments. Retailers,Banking & insurance services and Electronics & domestic appliances went up in the ranking, while Beerropped as 2015 was not marked by major sports events.

Confectionaries and Dairy products kept stable, Chocolate exited the top 10, while Cars entered the top0, with higher investment than last year.

Telekom continued in 2015 its aggressive media communication after the rebranding in September 2014remaining biggest media investor in the Mobile telecommunications category, as well as in the total mediamarket. Cosmetics, hygienic, hair care & cleaners category growth was driven by higher investments comingfrom Unilever, Procter & Gamble, LOreal, Reckitt Benckiser and Henkel.

Lidl kept the leadership among Retailers, while Altex was the main investors in Electronics & domesticappliances. Signicant media investments coming from Tiriac Group Auto, Dacia Renault Group and PorscheRomania pushed Cars & 4x4 vehicles up in top 10, by the end of last year.

Perspectives For 2016

Initiatives prediction for 2016 is that the total net media market will grow by 6% vs. 2015, to 351 Mio euro. Mediachannels will keep the same variations as in 2015: TV is expected to grow by 6%, Online by 12%, Radio by 5%,while OOH will keep at and Print will continue its downtrend (-10%)

TV market is estimated to reach 225 Mio euro and will reect a 5% - 10% cost ination.

Despite the audience performance changes generated by the new TV measurement, top 3 channels will stayunchanged Pro TV, on 1st place, followed by Antena1 and Kanal D.

Online:In 2016 the Digital market will continue to show a very high interest for direct response channels (withGoogle and Facebook main drivers), more video formats through all devices , an increased focus on contentprojects, special formats and audience buying solutions from premium websites.

Programmatic (estimated to grow by 70%) and Facebook (by 45%) should have the highest increase, whileGoogle will maintain a stable growth of 20%.

OOH: since January 2016 the local advertising tax is applicable to the total OOH advertising cost exceptproduction and from 21st of March the tax must be paid by the exposure beneciary directly to the local authoritiesof each locality. BRAT and IAA industry organizations, on behalf of the OOH market will continue their efforts to

bring all the necessary clarications with regards of the new Law implementation guidelines.

Radiostations will continue to ght for market share by being open to special projects, tailor-made contests,shows relocations in unconventional locations and sponsorships and providing the advertisers with the desiredcommercial exibility.

Print:integrated media packages, events partnerships and more appealing exclusive media offers seem tobe the right solutions for the publishers to gain advertising budgets and revenue. Special projects, tailor-madesupplements and unconventional formats will be the main tactics for 2016.

Source: Initiative database

50mil()

39mil()

36mil()

22mil()

16mil()

15mil()

10mil()

8mil()

8mil()

6mil()

Mobile

telecommunications

services

Medical & optical

products & services

Cosmetics, hygienic,

hair care & cleaners

Retailers

Other sugar,confectionaries,honey

Milk Products

Cars &

4x4 vehicles

Beer

Banking &

insurance services

Electronics &

domestic appliances

Top 10 categories 2015 all media

(TV, print, radio, online, OOH) estimated net budget

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verview

015 conrmend Television as the most important media channel in the market, leading with over 64% of totalet media investments. Last year was the second of growth in terms of advertising revenues, after the marginalcrease in 2014, and the ascending trend is expected to continue.

he high number of monitored channels remained stable during the last years (59 in 2015), but the changesarted in 2014 continued with re-brandings (TCM to TNT, Eurosport to Eurosport 1, Euforia TV to Happyhannel), new sports channels being monitored (Digisport 1 and Digisport 2) and channels like Look TV, Lookus, CBS Reality and Fishing & Hunting Channel decided to drop out from the monitoring system. Also, in 2015niversal Channel decided to exit the Romanian market.

igital Cable increased signicantly in 2015 reaching 22.1% of the households with TV set, while all othereception types decreased slightly compared to 2014.

2015 is the rst year after the recession when the TV market recovery continued, being consolidated with a totalinventory sell out increase of 7% in GRP30 vs. 2014 and the net TV market budget reaching 212 Mio.

In terms of cost, the TV market closed in 2015 with a slight ination, with a CPM (cost per thousand) for urbanpopulation All 18-49 of 2.095 euro (vs. 2.082 euro in 2014). For urban population All 4+ the CPM settled at 0.86euro, while for national population reached 0.47 euro.

If we exclude the inuence of the incremental spending generated by cyclical events from 2014 (e.g. Olympics,FIFA World Cup etc), the advertising investement growth was in 2015 even higher, of approx. 8%.

During the rst trimester of 2015 the sold GRP30 increased by 11% vs. 2014, but the trend slowed downthroughout - the ratings declined, increasing the market loading to sold out levels.

Reception type evolution

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%6,2%

26,1%

9,8%

59,9%

4,4%

24,9%

14,1%

56.6%

3,8%

24,4%

15,9%

63.7%

3,9%

23,3%

17,3%

64.1%

2,5%

22,8%

22,1%

62,5%

Terrestrial Direct to Home (DTH) Digital cable with receiver Analogue cable

2011 2012 2013 2014 2015

Source: Kantar Media Romania

Source: Kantar Media Romania, Initiative estimate

Years 2014 2015

Buying target

GRP30 (000)

Inventorysold %

minutes

2,008 2,156

74% 86%

108

151167

187

168 161150

133

172

199209 203

121

165

188 192 178 185166

150

174

210 211 216

250

200

150

100

50

0Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug -14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug -15 Sep-15 Oct-15 Nov-15 Dec-15

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

2014 2015 Sold GRP30 (000) by month (buying target)


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though the second semester was sold out in Prime Time (approx. 99.6% loading), and exceeded 90% duringl day, overall, 2015 average loading settled at 86% during All day and 94% in Prime Time.

2014 2015 Average Inventory sold % Min (07:00-26:00)

and Prime Time vs. legal limit

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015


40%

20%

00%

80%

60%

40%

20%

0%

AVG All day

AVG PT


2014 2015 Average Inventory sold % Min (07:00-26:00)

and Prime Time vs. legal limit (Split by quarters)

80%

98%

99%

100%

71%

92%

91%

96%

0% 20% 40% 60% 80% 100% 120%

Q1

Q2

Q3

Q4

Avg. PT inventory

sold % min

65%

90%

90%

96%

55%

79%

76%

84%

0% 20% 40% 60% 80% 100% 120%

Q1

Q2

Q3

Q4

Avg. all day

(07:00 - 26:00) inventory sold % min

2014 2015

The total buying GRP30 sold by the TV channels in 2015 was 2,156 Mio GRP30 of which 35% were soldby CME, 26% by Intact group, 10% by Dogan Media, 4% by Prima Broadcasting Group and 3% by SRTV(TVR1+TVR2). In terms of advertising revenues share, CME kept leadership with 48.3%, followed by Intact Groupwith 26.4%, Dogan Media 10% and Prima Broadcasting Group 3.4%.

Source: Initiative Media Estimation

2015 Sold GRP30 vs. Advertising revenues share,

main TV Groups

2015

12%

3%

10%

26%

48%35%

25%

4%

10%

26%

CME

IntactGroup

DoganMedia

PrimaBradcasting

Group

Others

Channels Performance and Prole

2015 maintained the top 3 TV stations ranking as in 2014: Pro TV kept the leading position (Rtg. 4.3%, Shr. 19.3%/ All 18-49 urban), followed by Antena 1 (Rtg. 3.2%, Shr. 14.5%) both channels reecting a slight performancedrop, and Kanal D (Rtg. 1.6%, Shr. 7.2%) with better performance compared to previous year.

Antena 3 was placed 4th with Rtg. 0.8%, Shr. 3.8%, performing better than Prima TV and Acasa TV, both with(Rtg. 0.7%, Shr. 3.2%).

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cluster of TV channels with comparable performance was determined by National TV (Rtg. 0.5%, Shr. 2.4%),omania TV (Rtg. 0.5%, Shr. 2.3%), Antena Stars (Rtg. 0.5%, Shr. 2.2%), Digi24 (Rtg. 0.4%, Shr. 1.9%) and TVR(Rtg. 0.4%, Shr. 1.98).

2015, main channels continued their programming strategy based on productions with high preference amongrge audience groups and capable to deliver high return on investment.roTVs continued to rely on their successful reality shows and TV series: Romanii au talent, Vocea Romaniei,Visuri la cheie, Masterchef, Las Fierbinti, Sunt celebru, scoate-ma de aici! and Ferma Vedetelor, whileom the autumn of 2015, the UEFA Champions League was back on Pro TV.ntena 1 continued to capitalize on its already successful formats: X Factor, Te cunosc de undeva, Te pui cuondele, Next Star, Poftiti pe la noi but also invested in new productions, launching Insula iubirii, Seri deomania, Ham Talent.anal D continued to bet on the successful recipe of Turkish series aired in Prime Time: Furtuna pe Bosfor,Tradarea, Dila, Un destin la rascruce, Yaman.espite the drop in audience in 2015, Antena 3 managed to keep a place in top 10 most watched TV stations, butarted to face a more competitive position from other two News channels, Romania TV and Digi 24, both on ancreasing trend vs. 2014.

2015, top 10 TV stations gathered 60% of all 18-49 urban population audience, the same as in 2014 althoughome players reected slightly lower performance vs. 2014 (Pro TV, Antena 1, Antena 3, Prima TV, National TV)nd others performed better ( Kanal D, Digi24, Romania TV and Antena Stars).verall, the average audience in commercial break dropped by 7 p.p. in 2015 vs. 2014, as the high sell out ratecreased the ad breaks length.

Talent shows and cooking programs are the most popular among Romanians since 2012: Romanii au talentremained the most appreciated talent show, followed by Vocea Romaniei, both on Pro TV and reecting, asusual, the highest audience.

In 2015, Antena 1s show Te cunosc de undeva performed better than X-Factor and Ham talent, whileother productions were closed due to lower performance from one season to another (Top chef, Romaniadanseaza).

Romanian TV market has a large offer, so viewers can easily navigate between stations, choose programs theywant to view and browse among a wide range of interesting topics. Nevertheless, the market is dominated

by the generalist TV channels, which have a large addressability, leaving a smaller share for niche channels.Despite this fact, new niche channels are launched periodically, and they manage to gain loyal audiencegroups.

The audience prole analysis reveals that PRO TV and Prima TV have a younger audience base, balancedbetween genders, while Antena 1, Kanal D and National TV show a signicant skew towards femaleaudiences. Besides Kanal D, TVR1 and National TV reected a high preference among 65+ years old viewers.In terms of coverage, Pro TV reects the most homogenous preference across all urban levels, while Antena 1,Kanal D and Prima TV are viewed mostly in medium size urban.


2014 2015 Monthly Dynamic Time Bands Analysis

(Rtg%, All 18-49 urban top channels, 07:00-26:00)

0

1

2

3

4

5

6

Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

Apr-15

May-15

Jun-15

Jul-15

Aug-15

Sep-15

Oct-15

Nov-15

Dec-15

Pro TV

Antena 1

Kanal D

Antena 3

Acasa

Prima TV

TVR 1

Digi 24


2013 2015 Talent Shows Performance

(Rtg%, All 18-49 urban)

21.3 21.5

18.1

8.77.7

6.9

13.2

10.8 10.7

13.1

9.7 10

4.9 5.36.8 6.8 7.4

8.7

6.57.7

5.4 5.45.56.9

3.2

6.9 6.9

0

5

10

15

20

25

2013 2014 2015

Romanii au talent (Pro TV)

X-Factor (Antena 1)

Vocea Romaniei (Pro TV)

Masterchef (Pro TV)

Top Chef (Antena 1)

Te cunosc de undeva (Antena 1)

Romania Danseaza (Antena 1)

Next Star (Antena 1)

Junior Chef (Antena 1)

Hell's Kitchen (Antena 1)

Hamtalent (Antena 1)

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media bookwww.mediafactbook.roSource: Kantar Media Romania

Source:

Kantar Media Romania

Source:


Source:


Source:


B1 TV Profile (Affinity Index)

Antena 3 Profile (Affinity Index)

Realitatea TV Profile (Affinity Index) Romania TV Profile (Affinity Index)

Digi 24 Profile

(Affinity Index)

0

50

100

150

200

250

300

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

0

50

100

150

200

250

300

Men

Women

Social gradeAB

Social grade C

Social gradeDE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

0

50

100

150200

250

300

Men

Women

Social gradeAB

Social grade C

Social gradeDE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

0

50

100

150

200

250

300

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

0

50

100

150

200

250

300

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

Pro TV Profile (Affinity Index) Antena 1 Profile (Affinity Index)

Source: Kantar Media Romania Source: Kantar Media Romania


Kanal D Profile (Affinity Index) Prima TV Profile (Affinity Index)


TVR1 Profile (Affinity Index)

National TV Profile (Affinity Index)

0

50

100

150

200

250

Men

Women

Social grade AB

Social grade C

Social grade DE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

0

50

100

150

200

250

Men

Women

Social grade AB

Social grade C

Social grade DE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

0

50

100

150

200

250

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

0

50

100

150

200

250

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

0

50

100

150

200

250

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

0

50

100

150

200

250

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

Generally, News channels reect a balanced viewership by gender, a more mature age prole and AB socialgrades, except Digi 24 which manages to build loyal viewers among younger male TV viewers with ABC socialgrades, living in large urban areas.

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he women thematic channels reect slightly different proles, with Diva and TLC preferred more by 25-34ears old female viewers, while Acasa TV and Happy Channel are more among the preferences of 45+ years oldomen. There is also a clear differentiation in terms of content quality, with Diva and Happy Channel being moreremium and appealing mostly to AB social grades, while all the others capitalize more on CDE social grades. TVaprika, the specialized cooking channel, although with exclusive content, manages to build a wide preferencemong women 35+ years old with ABC social grades, resident in Bucharest and large urban, reconrming thegh interest for cooking shows among Romanian TV viewers.

The movies and TV series thematic channels AXN and Pro Cinema reect slightly different footprints, with AXNappealing to both men and women 30 + years old in Bucharest and large urban, while Pro Cinema capitalizesmore on a 35+ years old male audience.



0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

Diva Profile (Affinity Index)

0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

Acasa TV Profile (Affinity Index)

0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

Happy Channel Profile (Affinity Index)

0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

TLC Profile (Affinity Index)


0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4 -1 1

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

Antena Stars Profile (Affinity Index)

0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

TV Paprika Profile (Affinity Index)


0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

AXN Profile (Affinity Index)

0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

Pro Cinema Profile (Affinity Index)

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Paramount Profile (Affinity Index)

0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

Film Cafe Profile (Affinity Index)

0

50

100

150

200

Men

Women

Social gradeAB

Social gradeC

Social gradeDE

Age 4-11

Age 12 -17

Age 18 -24

Age 25 -34

Age 35 -44

Age 45 -54

Age 55 -64

Age 65+

Urban 30k

Urban 30k-100k

Urban 100k -200k

Urban 200k+

Bucharest

Perspectives For 2016

In the rst quarter of 2016 the TV market was marked by costination, which was driven by an air time demand increase on theground of lower ratings achieved by the TV market. This led to asignicantly higher loading during all day (78% vs. 65%) as well asduring Prime Time (90% vs. 80%) and implicitly the sold GRP30inventory grew by 5% vs. same period of 2015.

In terms of programming, the main channels are expected tofocus heavily during Prime Time, in their attempt to maximize theaudience performance of their top shows and monetize bettertheir investments in the productions.Pro TV will focus this year on Romanii au Talent with the

surprising return of Florin Calinescu as a jury member, FermaVedetelor, from mud and dust to Mediterranean sea, LasFierbinti TV series, a new format called Bake Off Romania,Atletico Textila. In autumn, it will continue with new seasonsfrom Vocea Romaniei, Visuri la cheie and is expected tolaunch the already highly rated The Survivor.

Antena 1 counteracts with proven successful formats like XFactor, Te cunosc de undeva, Seri de Romania, Te pui cublondele, Next Star, Insula iubirii, In puii mei, as well as withnew products like I comedy and Game of Chefs, a successfulcooking format.

Thematic sports channels owned by cable companies, such as Dolce Sport,Digi sport are expected to monetize their sports rights for events like 2016European Football Championship and Liga 1. Digi 24 will continue to beopen for advertising sales, and will produce additional inventory.

Nevertheless, these cable channels have a limited technical coverage (e.g.Dolce Sport 22% national), therefore the additional TV inventory generated bythese events will not be very high.

Pro TV also bought rights for 2016 European Football Championship withfree to air option.

The beginning of 2016 was marked by a signicant lower Total TV viewing(-6% in Q1 2016 vs Q1 2015). Excluding the elections and the sports eventsdue this summer, we estimate that the Total TV rating will drop on average by5% by the end of 2016.

In the context of 5%-6% higher advertising budgets available on the marketthis year, the market is estimated to close this year in a 5%-10% cost ination.An important factor in the nal yearly picture is the TV channels autumnperformance.

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digital media

lobal perspective has an important role in understanding trends and potential evolution of the Romanianmarket, whose delay vs high developed count ries minimizes each year.

Worldwide digital media advertisi ng sales grew by 17% to $160 billion in 2015. They are expected to grow byouble-digits again in 2016 (+13.5%) dri ven by mobile advertising (+42%), video formats (+35%) and social

ormats (+31%), while banner formats sales will stagnate (-2%) due to ad blocking and the competitionf other formats. Global digital revenues are estimated to reach 38% market share by the end of017, surpassing TV (37%) to become the number one media category. Mobile advertising now

ccounts for 33% of total digital advertising and will reach 55% by 2018, following the rapid shiftn digital media usage and planning strategies.

obile, but also video exploded in social media. In 2015 Facebook has doubled the number of daily viewtes, reaching 8 billion views, surpassing Youtube, Twitter launched Periscope native, Snapchat recorded

pproximately 6 billion daily video views.

lobally, the largest digital format remains Search, which despite maintaining a lower prole than trendy

ormats social and video, represents nearly half (48%) of digi tal budgets. Ad sales grew by +15% in 2015,ith low single-digi t desktop growth compared to +55% mobile growth . Desktop search ad revenues arectually already declining in many developed markets.

omanian Landscape Audience overview

omanian internet penetration maintained a positive trend in 2015, reaching up to 65% of total population,ith an increase of 4% vs previous year, while age segmentation remained stable, according to INSSE015. The age split shows the same high afnity on younger segments, with 89% penetration for 16-24

o. and 66% for 25-34 y.o., while expectations for the next years are to have a general increase with mostgnicant percent for +35 y.o. (from 63% to 70%).

From social consumption perspective we outline the slightly lower mobile connectivity (87% of Romaniansmonthly active users connect on mobile to Facebook vs. 91% globally), while in Romania the frequency issignicantly higher (76% of monthly active users returning daily to Facebook vs 66% globally).

Most frequent online activities remain unchanged or on a slow decreasing trend e.g search for info (80%vs 84% in 2014), email (73% vs 76% in 2014). The only activity on an ascending trend was in 2015 watch

video with a signicant grow of 7.7% vs 2014 (from 66% to 71%).

Source: INSSE 2015

Internet Penetration in romania

100%

50%

0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

26 % 31 % 36 % 38 % 43 % 46 % 52 % 58 % 61 % 65 %

Source: SNA 2012-2015

Frequent online activities

2012 2012 2012 2012

100%

50%

0%

Search forinfo

Email S oc ia lnetworks

ReadNews

Instantmessaging

Watchvideo

Onlinegames

Audiostream

Joinchat/forum

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Source: Facebook internal data 2015

Facebook in Romania

Every day

people daily

76%of monthly active users return daily 87%of monthly active users connect on mobile

people dailyon mobile

people monthly people monthlyon mobile

>6.3M >5.3M >8.3M >7.2M

Every month

peaking about domains of interest, in 2015 women visited Blogs (0.9 mi l women users), Forums and Discussionsroups or Dating websites (0.5 mil women users), while men preferred the last two (1 mil men used forums orating websites in 2015).

Adblocking

In terms of installed ad blockers, Romania (with 13.9% of total users) is far below Europes average (35% of users),based on IAB Romania ad blocking study.However, this topic should help reset industrys minimal standards, starting from what formats publishers willaccept, agencies will create and plan and clients wil l approve, to objectives setup (for ex. positive sentiment beforea higher CTR objective). At the question What are the main reasons for which you installed an AdBlocker?,annoying and disturbing advertising returns the highest rate, with 85% of respondents.

Romanians continue to integrate digital more in the shopping experience, with double digits increaseeach year, showing they start to overpass security concerns or the traditional habit of buying ofine.

According to GPEC estimations, total value of online retail has an estimated 2015 growth of up to 1.5 billion eurovs 1.1 billion estimated for 2014, generated by 6.7 mil active online buyers. This is an area were mobile has plentyof space to grow with only 1.4 mil Romanians ever buying online through mobile devices. 90% of Romanians stillprefer to pay with cash when receiving the product, even if security levels improved signicantly (with over 1,300online stores having implemented 3D Secure security standard).

1

2

3

4

5

6

7

85,4%

43,8%

42,6%

14,6%

9,6%

7,7%

0% 25% 50% 75% 100%

1,9%

Source: Iab Romania Adblocking study 2016

Advertising received is annoying/disturbing

To optimize pages loading

For a better browsing experience

To limit interne band consumption

For child protection

Other reason

Dont know

Source: Gemius Audience Romania 2015

1.9minternet usesrs

4.7m

4.5m

Blogs

Forums and discussion groups

Dating

(20.5 %)

1.5minternet usesrs

46%(9.2m)

population of internet usesrs

(16.2 %)

1.5minternet usesrs(16.2 %)

0.9m 1m

0.5m 1m

0.5m 1m

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andscape Main players overview

oogle

earch queries registered in 2015 a growth of 10%, but desktop queries declined with 5%, while mobileounced to plus 60% vs 2014.In conclusion, mobile is moving very fast in search too.rom advertisers perspective, Google increased targeting options by different features like customer

match (upload emails data and advertise further targeted to those users), open Gmail ads to all advertisers,r open (and pushing) 360 video.

acebook

ocial networks power, fueled by the same omnipresent mobile, increased to unexpected levels, withacebook as the main driver. In Romania, Facebook grew signicantly, even if at the end of 2014 it looked

ke it wouldnt have too much extra space (from 7 milli on users at the beginning of 2014 to 8.2 million at thend of 2015).

acebook became the 1st or 2nd referral for almost all classic online display content, which translates,eyond publishers content strategy, into no matter where the user is from, somehow he passed Facebook

efore. This means that Facebook is more and more important also from the publishers perspective,eyond the advertisers one.

acebook focused in 2015 in platform improvements for bo th users and advertisers, by launching specialatures like Multi product ads (renamed same year to Carousel ads which also became available onstagram, opening to all advertisers globally), relevance score metric (helpful to test ads before starting aampaign or optimize already running campaigns), Call Now button for local awareness ads and other.

omanian publishers

he major moves in digital inventory / portfolios / big publishers were generated by Mediafax, starting frome beginning of 2015 with Orlando Nicoara leaving the company, to the end of the year when its onlineortfolio sales moved to Think Digital.

l big media houses / publishers worked to improve their portfolio, by developing new projects or takeoverales Ringier with kmkz.ro, stilmasculin and libertateapentrufemei, Internet Corp with timesnewroman.o, port.ro, forum.softpedia.com, misiuneacasa.ro, titirez.ro (and also custom projects on video such as

Wall-street 360).

roTV maintained in 2015 a leader position in terms of trafc, followed by Think Digital in the media sales

ouses ranking, and by Mediafax in the editors/publishers category

Impressions Visits Unique users

Main local pubishers share of inventory

Digital budgetsEuro 35,000,000

Euro 30,000,000

Euro 25,000,000

Euro20,000,000

Euro 15,000,000

Euro 10,000,000

Euro 5,000,000

Euro

2012 2013 2014 2015 2016 est

22,050,000 Euro22,050,000 Euro

22,160,000 Euro

27,540,000 Euro

33,048,000 Euro

21,052,238 Euro

6,881,836 Euro

1,632,000 Euro

22,160,250 Euro

4,745,094 Euro

960,000 Euro

22,950,000 Euro

3,512,625 Euro

15,300,000 Euro

19,125,000 Euro

2,812,000 Euro2,250,000 Euro

Display local Gaw FB Yahoo Programatic

Source: Initiative estimates

Source: SATI dec 2015

0

4,000,000

8,000,000

12,000,000

16,000,000

20,000,000

0

40,000,000

80,000,000

120,000,000

160,000,000

ProTV Ringier Mediafax AntenaTV

Group

Adevarul Ringier

lifestyle

feminin

Dogan

Media

ROL ImediaPlus Internet

Corp

Market Spend

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igital media maintained the increasing trend in 2015, with a total net of 57 million euro (+12% vs 2014). Fromhannels shares perspective, there is an increased weight of Google (from 45% in 2014 to 48% in 2015)nd Facebook (from 7% in 2014 to 8% in 2015) and a slightly decreasing trend of the classical display (from3% in 2014 to 39% in 2015 - mainly local premium publishers considered and revenue generated by localdvertisers).

PC model, together with advanced targeting capabilities, cont inues to give advertisers more condence ine return of investment of their online budgets, but special formats / projects potential of premium publishers

nd mainly the programmatic buzz (also CPM based) ask for bigger shares.

he big 2 international players represent in most cases the 1st (usually Facebook) and last steps (usuallyoogle) of the purchase funnel, while all the other channels try to keep or dene complementary roles.this context, programmaticwill play a major role in the immediate future by giving local publishers solutions

o better monetize their i nventory, by improving targeting and generating better results, while decreasing theequired inventory.

Mobile advertising has signicant unused potentialn important perspective is based on devices split. According to Gemius research, in 2015 an average of1% of ads were served on mobile (generating 28.62% of total clicks), 3.41% on tablet, desktop led with5.66%, while in December 2015 mobile generated 41% of impressions and 53% of visits from total trafcccording to Sati, premium publishers only).

he increase of mobile trafc will generate more mobile inventory and inevitably the increase of the percentageedicated to mobile from the digital spend. This increase will come by including mobile in all campaignetups, meaning impressions will be served where will nd available inventory, able to generate additionaleach, higher CTR etcand thats certainly the mobile territory. Before the end of 2017, we expect mobileo generate a minimum of 35% from the total revenue of any digital publisher (for some of them, this alreadyappens).

Digital Programmatic glossary

Automated Guaranteed: Transaction in which inventory is guaranteed and pricing is xed, with negotiat ionhappening directly between buyer and seller. Transaction processes are automated but otherwise match atraditional I/O transaction.

Automation: Using technology to facilitate media transactions in a way that mirrors traditional transactions instructure.

CRM: Customer relationship management a system for managing a companys interactions with currentand future customers.

Deal ID: Unique identier that associates a transaction with prearranged agreement details, typically used toincrease information in a transaction or change auction outcome from strict price criteria.Identication: Using login details to associate devices with an individual user for the purpose of identifying auser across all devices through which they access content.

Display-Related: Digital media advertising formats, including banners, video and social, i.e. all digitaladvertising formats except Search. Display-Related is the addressable universe for programmaticdevelopment.

DMP: Data Management Platform, a user data store that is used for the centralization, management anddeployment of a brands audience data.DSP: Demand-Side Platform, tech solution to allow buyers to access inventory across multiple exchangesand from multiple media owners.

Dynamic Insertion: The ability to show a specic user a specic ad, typically because of the characteristics of that user.

Exchange: Technology platform that facilitates the buying and selling of ad inventory using various methods ofpurchase other than traditional I/O.

First Look: An agreement in which a buyer has priorit y access to inventory in an auction environment.Hash Linking: Associating an identifying tag with a specic user through a cryptographic function that doesnot allow reversing that tag back into the identifying characteristics for that user. Current best tracking optionfor protecting Personally Identiable Information.

Invitation-Only Auction: Auction environment comparable to open exchange, except only a select collectionof buyers that have been white-listed by the media owner(s) are allowed to participateOpen Auc

MFB2016

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