European Media: Battle of the Big Five

campaignlive.co.uk, Friday, 30 September 2005 12:00AM

Robin Hicks gives a snapshot of the top issues, people and properties in the media markets of Europe's top five advertising economies - Germany, the UK, France, Italy and Spain.

GERMANY - Adspend: $19bn

AT A GLANCE

With unemployment at 12 per cent, consumer confidence is low, and companies are only just returning to profit. With any luck a new chancellor will bring in some structural changes to get Europe's largest economy firing again. The official adspend growth figure is 5 per cent for 2005 but, after discounts, the market is unlikely to grow at all this year.

Most powerful media owner

Even if the proposed $3.05 billion mega-merger between Axel Springer, the publishing behemoth, and the broadcaster ProSiebenSat1 is approved, the company will still be smaller than Bertelsmann, the fourth-largest media company in the world.

Most troubled media owner

Wolfgang Vogler, a 41-year-old executive from an aluminium company in Kisslegg, is suing Munich's EM.TV for $12 million for apparently misleading him about the health of the company. Vogler complained that he lost $3,800 when shares in EM.TV plunged and could no longer take his children on holiday.

Most promising trend

Lots of fads, but not many real trends. One is the rise of the so-called "readable newspaper", the lightweight public transport-friendly quality tabloid, such as Welt Kompakt. And apparently Germany is the world's biggest text-messaging market.

Most worrying trend

That there aren't any. The concentration of regional newspapers is a worry, though, while the threat of freesheets is a constant concern for Germany's regional newspapers. These powerful groups have shut out the likes of Metro International and Schibsted to date, but rumours abound of a fresh assault.

Most creatively minded medium

Either the outdoor group Stroer, or the broadcaster ProSieben.

Most complained-about medium

TV. There's been zero inflation since 2002, but now prices are up again - by 5 per cent - and advertisers are going to have to bite the bullet.

Google gets a bad rap too. The search engine is, one observer says, "the unholy marriage of Microsoft and the CIA".

Medium advertisers won't shut up about

Are weblogs a waste of time? The audience is too small and dispersed, clients say. They're also wondering about the consequences of Axel Springer buying ProSiebenSat1.

Most talked-about media figure

It's a toss-up between Haim Saban, the Egyptian billionaire dealmaker who won the battle for the collapsed KirchMedia's broadcaster ProSieben two years ago, and Margret Buhse, the widely respected head of corporate communications at Nivea's maker Beiersdorf.

UK - Adspend: $18.7bn

AT A GLANCE

While Brits probably wouldn't swap bank balances with their European neighbours, it seems the UK economy is suffering from schizophrenia. "On the surface, things are rosy. Yet in certain sectors, such as retail, times are tough. Who'd have thought that French Connection would have issued a profit warning?" Charlie Makin, the chief executive of BLM Media, wonders. GDP will grow by 2 per cent this year, while the advertising market was up by 5.3 per cent. Aegis expects adspend to increase by 4.5 per cent next year. "People seem less confident than they were a year ago," Makin notes.

Hottest media launch

Yes, The Guardian has down-sized a bit. But what about City AM, the daily business freesheet? Lawson Muncaster and Jens Torpe, who spearheaded expansion at the freesheet giant Metro International, could well make it work.

Most powerful media owner Rupert Murdoch's News Corp. Sky, The Sun and The Sunday Times are just a fistful of the Australian mogul's right-wing media interests.

Most troubled media owner

The UK's famous red-tops, such as the Daily Mirror. Price wars and the desire for more serious news coverage haven't helped the tabloid newspaper market. The terrestrial TV channels will struggle too, unless they have a serious rethink about their funding models and fully embrace the digital age.

Best media campaign Unilever's Persil brand has turned a category obsessed with "whiteness" on its head with its "dirt is good" campaign.

Most promising trend

The growth of broadband. There are now more UK homes with broadband than satellite TV.

Most worrying trend

For the first time in history, the consumer is adapting and creating its own media - and the advertising industry has been left behind. Agencies aren't exactly ignoring this strange phenomenon, but they are struggling to come to terms with a grim reality: to keep up they have to rip up their business model.

Most complained-about medium

TV. Booking airtime ten weeks in advance frustrates media agencies. Especially when you consider that high-quality content can be produced and aired in a matter of hours. But TV companies aren't under much pressure to change.

Thinkbox, a joint initiative set up by the TV companies to better serve their clients, has gone some way to appease the critics.

Most talked-about media figure

Stephen Carter at Ofcom has become a very important figure, and Mr Murdoch is always a popular topic of conversation. And, of course, Campaign's editor, Claire Beale.

FRANCE - Adspend: $11.5bn

AT A GLANCE

France's economic headache isn't pounding quite as hard as Germany's, but the outlook is arguably more depressing. There are presidential elections in 18 months, but there is no popular candidate to replace Chirac. GDP growth has slowed to a crawl, and the advertising market is unlikely to have grown much, if at all, over 2005. "Frankly, the problem is the mood.

There's no major issue to worry about, but people are still fretting about the future," Eric de Rugy, the chairman of Mediaedge:cia France, says.

"Brands have been devalued, and have failed to establish trust and faith. Unless they do, nothing will change," he adds.

Most powerful media owner France's dominant TV channel TF1 is hugely powerful. It takes more than half of the market's ad revenue and, after many years of decline, clawed back its audience share to 35 per cent this summer. If there's a weakness, it has been the company's failure to make an impact overseas, something Hachette Filipacchi, the world's largest magazine publisher, has been rather good at. And let's not forget JCDecaux, a pioneer of outdoor media globally.

Hottest media launch

The digital terrestrial TV platform La TNT. But take-up of the channel has slowed, and it seems to be earning a reputation as a dumping ground for cheap re-runs. Arguably bigger was the launch of Orange and SFR's 3G mobile platform.

Biggest media agency

Carat. Even without the famous "twins" Bruno Kemoun and Eryck Rebbouh, who left in 2003. MPG is number two.

Most troubled media owner

Emap became known as the publisher that couldn't launch a magazine after a series of French flops including the TV title Telemax. But its launch of the celebrity title Closer (circulation: 650,000) has earned it a little more respect.

Best media campaign A campaign for Chanel No 5 has won many admirers this year. The famous perfume brand was promoted in the style of a movie starring Nicole Kidman in print and on TV.

Most creatively minded medium

Henri Toulouse Lautrec gave France - and the world - outdoor advertising in the 19th century, and it remains France's most creative medium. This month Wrangler froze its latest line of jeans in ice, inviting young Parisians to break them free with ice picks.

Most complained-about medium

The daily press. They're bound by tradition and have long-standing problems with trade unions.

Most talked-about media figure

The corporate musketeer Vincent Bollore has recently acquired a stake in Aegis. Apparently, he collects and frames mineral water bottle labels.

ITALY - Adspend: $9.9bn

AT A GLANCE

GDP is expected to fall in 2005, yet Italy's major media grew 2.2 per cent in the first half of the year. "Italy's economic situation is not brilliant," Eugenio Bona, the chief executive of Media Italia, laments.

"We're still in the middle of a recession, and I'd be very happy if that growth figure held up until the end of the year." Car brands are spending heavily again, though, and Italy's retail market, a small advertising category by European standards, is growing quickly and could be an interesting opportunity for media owners.

Hottest media launch

The family lifestyle weekly DiPiu, from the publisher Cairo, has grown by pricing aggressively and has a readership of 2.3 million.

Most powerful media owner

Berlusconi's almighty Mediaset. Its sales arm, Publitalia, governs 35 per cent of the advertising market, and is structured to suit clients of all shapes and sizes. Another string to its bow is RTI, Publitalia's super-efficient production unit, which can churn out low-cost programming in days.

Biggest media agency

Mediaedge:cia, but Carat is hot on its heels.

Most promising trend

The emergence of satellite and terrestrial digital TV. It only really got off the ground last year, but first came about in 1996 when the pay-TV operator Telepiu launched its satellite digital service, D+. But it has been slow to take off. Now the talk of medialand is web and mobile - essentially any other device that can support Italy's favourite pastime: watching tele.

Most worrying trend

The relentless rise of TV. Its share of advertising spend is higher than any country in Europe (55 per cent) and shows no signs of slipping - which can't be comforting for media buyers who always find themselves at the weaker end of the negotiation table.

Most creatively minded medium

Italy's two leading full-colour newspapers, Corriere della Sera and La Repubblica, have a good reputation. So do the outdoor companies, especially when it comes to selling large-format posters in fashionable cities such as Milan.

Most complained-about medium

Until an official audience metric was launched, it was outdoor. But Audiposter came out this year and is helping the medium to silence some of its more accountability-minded critics.

Medium advertisers won't shut up about

When they're not ruminating about RAI or Mediaset, the focus in on the internet - especially its potential as a direct marketing channel.

SPAIN - Adspend: $6.8bn

AT A GLANCE

Spain's medialand is enjoying a sunny spell. The economy is growing almost three times as fast as the Euro-area average, and healthy corporate profits are prompting more advertising, particularly from telecoms and financial services. Adspend growth of 9.5 per cent is divided among relatively few (highly profitable) media agencies. "There is bags of confidence in the market at the moment," Jose Maria Casero, the president of Zenith Media Spain, says.

Hottest media launch

In a month's time, the pay-TV giant Sogecable will launch a new commercial channel, Cuatro. There's also Que!, the latest of eight free newspapers to hit Spain since 20 Minutos launched in 2000. The freebie already has a circulation of one million.

Most powerful media owner

Grupo Prisa at a stroll. It owns Sogecable, El Pais (Spain's biggest daily), the radio network Cadena SER (ten million listeners a day) and the sprawling local TV network Localia. Not to mention assets that span Latin America and the US. In May this year, it bought a sizeable stake in the French daily Le Monde.

Most troubled media owner

The state-owned dinosaur Televisiona Espanola lost 2.6 per cent share of viewing last year - a disaster in a ferociously competitive TV market.

Biggest media agency

MPG has dominated ever since the Rodes family founded it in 1978.It remains the immovable object of Spanish media planning and buying, although others are catching up.

Most promising trend

Cuatro and the free press. "Demand outstrips the supply, so we need a new channel to control inflation," Jesus Munoz, the president of MindShare Spain, says. Meanwhile, freesheets are encouraging young TV-obsessed Spaniards to read more.

Most worrying trend

TV price inflation and clutter in Spain are the highest in Europe. Ad breaks last up to 15 minutes and, according to Zenith, a Spanish housewife will watch up to 140 spots a day when clutter is at its worst (the European average is 35 spots). Advertisers demanding volume discounts and cost guarantees have been fuelling the problem.

Most creatively minded medium

Brits can only watch and drool at what Spanish advertisers can get away with on TV. Flashing brands during soaps and logos on news readers' microphones are not uncommon.

Most complained-about medium

TV. Clutter and inflation are the favourite swear-words of Spain's media agency bosses. And for all its creative flair, Telecinco is becoming a more rigid commercial operation on price, exploiting its position as the most-watched TV channel in Spain. Closest rival Antenna 3 is accused of the same.

Most talked-about media figure

Paolo Vasile, the chief executive of Telecinco, raised some eyebrows recently. "We're here for the money, not for the sake of entertainment. We're not a public-service broadcaster. We make programmes that sell," he said of his scheduling philosophy.

This article was first published on campaignlive.co.uk

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