Wirtualna Polska Group (“WP Group”, the “Group”) is one of the fastest developing Internet companies in Poland and one of the largest entities on the Polish market of Internet advertising. As at the Prospectus Date, the Group runs about 40 Internet portals, the major ones include: Wirtualna Polska, o2, BizTok, Pudelek, Kafeteria, Sportowe Fakty and Money.pl, and two e-mail services: Wirtualna Polska and o2. In 2014, the Group also began developing lead generation activities on the e-commerce market the purpose of which, in principle, is to supplement the operations of the Group’s services, portals and vortals and to utilise the Group’s access to a large number of users, the Group’s Internet resources and the knowledge of users’ behaviour and preferences in order to offer them products from e-commerce shops. The Group’s operations consisting of lead generation for e-commerce comprise running two services – Domodi and Homebook – which are aggregators of offers of other Internet shops and which generate revenue from marketing the offers of these shops. Both the Internet advertising and the e-commerce markets on which the Group operates are a part of the Internet market the functioning of which is based on using the Internet.
The Internet advertising and e-commerce market in Poland is strongly correlated with the general macroeconomic situation in Poland, which in turn is affected by the economic situation in the region, the European Union and the global economy.
The Internet is the most modern medium, and the fastest growing in terms of reach, in Poland and in the world. It is increasingly gaining popularity as an interactive communication channel and as a space and tool for conducting promotional and advertising campaigns. The incomparably high measurability of the Internet compared with other media enables the obtainment of confirmation of the effectiveness of online advertising campaigns in terms of costs and image creation.
Internet advertising market
Thanks to the global reach of the Internet, in recent years, online advertising has been gaining in importance, and the Internet advertising market has been developing very dynamically. In recent years, this type of advertising has become an alternative to traditional advertising media such as print media, radio, television and direct advertising. With online advertising, advertisers are able to easily verify the effectiveness of advertising (e.g. the number of redirections to the advertiser’s site from the Internet site on which the advertisement is placed) and compare the effectiveness of advertising with the price offered for online advertising, which is not always possible with traditional advertising. As a result, the online advertising market is more transparent than the traditional advertising market. In view of the above, year after year Internet advertising is gradually increasing its share in the aggregate value of global advertising expenditure and, apart from TV advertising, is the only segment whose share in the global advertising market is growing significantly, whereas the remaining advertising channels are systematically losing importance. The development of the Internet market depends on an increase in the number of Internet users, an increase in the amount of time they spend on the Internet, the development of broadband access to the Internet, which results in increasing the speed of data transfer on the Internet network, and the development of Internet access through mobile devices, which creates new possibilities for advertisement display.
In recent years, throughout the European Union, the Internet has been gaining in popularity as a place for purchasing goods and services. The share of the Polish e-commerce market in the entire retail sales market is systematically growing with the popularisation of the Internet and increasing consumer confidence in e-commerce. However, since the market is immature, it is expected that in the future the frequency of purchases made through the Internet will grow and so will the number of e-shoppers.
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