The Turkish Advertising Association released new data this month showing that TV ad revenue grew 16.0% year-on-year from H1 2015 to H1 2016 to TRL 1,948m (€645.2m). TV was a key driver for the whole Turkish advertising market which grew 14.0% year-on-year to TRL 3,662m (€1,212.9m). IHS forecasts the Turkish TV ad market to grow 8.4% in 2016, which places the Turkish market in the top three fastest growing markets in the CEE region.
The TV ad market achieved strong growth in the first half of 2016 owing to the increase of campaigns from local advertisers in key sectors such as household services and telecoms, but also from international advertisers of consumer products and foods. The increased demand by these advertisers has driven ad prices up, increasing total net advertising revenue. The positive movements in the advertising budgets were propelled by the good economic conditions in Turkey in H1 2016. Real GDP grew by 4.3% in real terms according to IHS forecasts.
Over the last couple of years, large international media companies have been looking for opportunities to invest and enter the Turkish TV market. In 2015, Discovery bought CNBC-e from Dogus Media; CNBC-e closed down in 2016 and was relaunched as an entertainment-focused TLC channel. In April 2016, Sony Pictures Entertainment acquired a majority stake in Planet TV’s four FTA channels in Turkey. A+E Networks partnered with MCD Medya in a joint venture, also in April 2016 and launched a premium channel for women, Lifetime.
The growth in the Turkish market in the last few years has made it the most sought-after country for foreign investors in the CEE region. In the period 2010-2015 the compound annual growth rate (CAGR) of the Turkish TV NAR revenues was 10.1%, compared to -3.1% in the wider CEE region. But other factors have also played an important role in making Turkey an attractive market to enter. The large audience base (current population estimate is at 78.6 million), the advantageous foreign exchange currency rate of the lira and the vibrant production market (specifically soap operas that exports globally: see Romania in CEE to Chile in LATAM) make Turkey a number one country for strategic expansion plans.
It is worth noting overall, that the political instability in the country has not deterred media investors from entering the market. Despite the additional resistance to new entrants due to the inherent domestic network of broadcasters that are owned by local financial groups with political ties, foreign media companies are encouraged to do business in Turkey.
In H1 2016, online advertising revenue grew 22.1% year-on-year, thanks to the surge in search advertising which grew 23.4% in the same period. The bulk of this growth came from the organic growth of the total advertising market and the continuous adoption of the online media by advertisers. IHS predicts that the online NAR for the fully year 2016 will increase 16.0%. Advertisers are utilising TV and online together to reach their audiences and so far the TV budgets have been immune to the wide expansion of online that normally jeopardise traditional media budgets. The large scale offered by TV makes all ad campaigns TV-centric and maintains the TV’s share at a high 48% share of the total advertising market.
Due to the political tensions and the state of emergency that the country has been in for three months since the military coup in July, domestic demand has deteriorated. The strong private consumption that was observed in the first half of 2016 is expected to lose some of its momentum and IHS expects to see a slightly weaker second half of the year. Advertisers therefore, are likely to moderate and/or shift some of their budgets to H1 2017 and beyond, but no drastic changes are expected.
Unless there are any geopolitical developments in the country that would severely impact private consumption in the next year, the Turkish media market seems to have a bright future for both domestically-owned broadcasters and increasingly for new foreign players.