Ukraine and Russia are fast growing advertising markets compared to their overall economic growth, but they both still lag well behind the more sophisticated media markets in Central and Southeast Europe (CESEE), according to a survey conducted by the weCAN advertising agency.

CESEE is booming and the growing shortage of labour is driving up wages and consumption, which is leading to a surge in ad spending across the region. weCAN found in 2016 that “the most powerful advertising markets in the region were the Visegrad countries with their solid online segment and the South-Eastern-European states with their extraordinarily strong TV market”.

The ad spend per capita has grown highest in the Baltics, where it ranges from €39 in Lithuania to €66 in Estonia. But ad spend per capita is high in the other economic powerhouses of the region: €58 in Poland, €59 in Hungary and €119 in Czechia, the highest in the region. In Southeast Europe the ad spend per capita is more varied, ranging from €17 in Romania to €76 in Slovenia.

Advertising in the region is increasingly moving online and in several countries in the region, including Hungary, Czechia and Russia, online ad revenue spend has overtaken the more traditional TV ad market spending in the last six months with several more countries in the region about to cross the same line in the next six months. And at the same time increasingly punters are using their smart phones to view content, with both Poland and Estonia having more than 100% mobile broadband penetration, according to weCAN.

But the most surprising result from this year’s survey is both Russia and Ukraine have gone shooting up the results table. The weCAN Ranking is an index that shows the percentage of the ad spending per capita within a country’s nominal GDP.

“We calculate both baseline data (GDP per capita and ad spending per capita) using the number of population older than 14 to ensure that the basis of the calculation only includes advertising target groups with independent purchasing power. The weCAN Ranking reveals whether the advertising market as an economic sector is stronger or weaker than what the overall economic performance of a country would suggest,” weCAN explained in its report.

While the Visegrad countries with their developed digital market, and the Balkan countries, with their strong TV markets, remain strong, the percentage value of the weCAN Ranking grew in the majority of the countries by a few thousandths compared to last year. This means that the ad industry grew more dynamically in the Czech Republic, Poland, Hungary, Croatia, Bulgaria, Lithuania, Romania, Ukraine and Russia than the overall performance of the local economy.

The fastest growing markets were Ukraine, Russia, the Czech market and Lithuania. Both Russia and Ukraine’s economies started to grow again in 2016, but the ad industry strengthened more radically in both countries.

“Russian advertising spending grew by 11% and the Ukrainian did by an astonishing 27% compared to 2015, the latter currently being one of the greatest growth rates in the region. This is reflected in their newly acquired positions in the ranking: Russia has advanced 3 places and Ukraine 5 places in just one year,” weCAN reports.