In the second quarter of 2024, Wirtualna Polska Holding’s revenues increased by 5.9% year-on-year. up to PLN 380.84 million. However, while the tourism segment (mainly Wakacje.pl, Nocowanie.pl and the Szallas Group acquired at the end of 2022) achieved an increase of 18%. up to PLN 144.46 million, this figure in in the advertising and subscriptions division (it is dominated by advertising, subscriptions are offered mainly by Audioteka, Pilot WP and Patronie) revenues increased by only 3.1%. to PLN 180.67 million, and adjusted EBITDA decreased from PLN 67.96 to PLN 58.11 million.
Wirtualna Polska expects more advertising of clothing and electronics
This is another consecutive quarter in which the dynamics of revenues and profits of Wirtualna Polska Holding are driven by tourism rather than advertising. – We do not see progress in the advertising market – admitted Jacek Świderski, president and one of the company’s main shareholders, during a conference call on Tuesday.
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He noted that so far this year the increase in consumption in Poland has been mainly due to the increase in fuel and electricity prices. – As we all know, industries such as electronics, home appliances and fashion have suffered so far and these are our main advertisers. It looks like sales of clothing and electronics in Poland will decline in the coming months – assessed Świderski.
– It was obvious that consumers became more cautious, we were all surprised by the prices. It seems that the economy is slowly returning to its previous path, in which the growth of online advertising will be a natural beneficiary – he described. We have no doubt that this economic situation will one day return, it is just a matter of time. – he emphasized.
In the current situation, Wirtualna Polska intends to make money not only by selling advertising on its websites. At the end of last year, it introduced the WPartner brokerage service in several foreign markets, and in Poland it offers smaller and independent online publishers the WP platform for managing content and advertising offers.
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The company is also trying to make the most of its advertising offering. At the beginning of September, it is introducing two new tools under the WP Booster brand for advertising in the efficiency model. In WP Booster (CPC) you are charged for each click on the ad (similar to, for example, Google PMax), while in WP Booster (CPSC) – only for clicks that actually led to a stay on the landing page. The company emphasizes that data from several dozen test campaigns showed a fourfold increase in effectiveness for customers compared to manually optimized CPC campaigns.
– The introduction of these smart products is a response to the needs of our advertisers, but also an adjustment to the standard that has been set by our global competitors in recent quarters, that is, via Google and Facebook – explained Jacek Świderski.
Google offers similar tools under the name Performance Max and Facebook as Advantage Plus. – We also have a good idea of what the advertising market looks like from an advertiser’s perspective, because we are big advertisers ourselves in the form of our e-commerce companies. We know how much these smart products have tipped the scales in favor of global platforms, the head of Wirtualna Polska Holding admitted. Today we want to eliminate this advantage. – he added.
More tools are expected from the WP Booster family. – We are currently introducing session optimization, but we will soon introduce lead optimization, which is very important for advertisers in the telecom sector, and in the case of automotive advertisers it will be test drive optimization – Świderski estimated.
At Wirtualna Polskie AI in all cases
The new WP Booster tools are the result of six months of work by a team of mathematicians and physicists led by Krzysztof Sierota – a member of the board of directors and one of the main shareholders of Wirtualna Polska Holding, who in the spring of this year joined the board of directors of the subsidiary Wirtualna Polska Media as chief technology officer.
– About a month ago, this team made a breakthrough in the effectiveness of CPC campaigns. They created a tool that is comparable in effectiveness to what global platforms offer. I consider it a great success – emphasized Jacek Świderski.
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Ads sold with new products will no longer be more expensive for customers. – This is possible due to improved efficiency. The click CPC itself will be slightly more expensive, but the cost of the session, which actually affects the advertiser, will be lower. We would like to share this fourfold increase in efficiency with advertisers – explained the head of Wirtualna Polska Holding.
– Needless to say, I guess No other local player in Poland has this kind of smart optimization tool. And it won’t be easy for anyone to build this toolbecause it requires truly advanced technologies, he noted.
In May this year, Wirtualna Polska Media laid off 120 employees, or 10 percent of its staff, mainly editorial staff. “The failure to meet the assumed business objectives resulting from the economic slowdown and the growing dominance of global technology platforms resulted in the need to change priorities, including job cuts,” explained Joanna Pawlak, the company’s then president. In early August, she left Wirtualna Polska Media and was replaced by Jacek Świderski.
The introduction of AI-based advertising tools does not mean cuts in the advertising department. – This is a historic moment for our company, because unlike these global platforms, we started with manual optimization of campaigns. And now this manual work is actually on the decline and being replaced by automated work, Świderski noted. Thanks to this, our employees can focus on better adapting products to customer needs, spending more time with customers and understanding their business better. So In fact, we also release a lot of potential to strengthen cooperation with advertisers. – he pointed.
The company is definitely betting on the use of artificial intelligence in the advertising business. – We are changing AI in all cases – admitted Jacek Świderski. – Advertising products that use artificial intelligence are becoming our main performance products – he emphasized.
Before negotiations with big tech
In mid-August, President Andrzej Duda signed an amendment to the Law on Copyright and Related Rights. Traditional publishers managed to convince parliamentarians, including through a campaign in various media outlets under the slogan “Politicians! Don’t kill Polish media” so that the amendment would introduce provisions under which digital companies, led by Google and Meta Platforms, must obtain licenses from such publishers to use their content. Agreements on this matter will be concluded under the mediation of the Office for Electronic Communications.
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Wirtualna Polska Holding is one of the founders – together with Ringier Axel Springer Polska, Agora, ZPR Media Group, TVN Warner Bros. Discovery and Interia – the Association of Employers of Digital Publishers. This organization, led by Maciej Kossowski, will conduct negotiations with big tech on behalf of publishers.
The chairman of Wirtualna Polska Holding declined to reveal how much money the company makes from the licensing agreements. – These negotiations will certainly be difficult. I don’t want to spoil Maciek’s work here, he said.
