CAMPAIGN REPORT IN GERMANY: German TV gears up for on-screen trading. In a booming television market, Reuters and the Havas group want to revolutionise airtime buying with a new online system. But others may yet beat them to the prize. By Jade Garrett

In the face of a troubled national economy with all-time high unemployment, one industry is booming. The German television market is now the most fiercely competitive in Europe and boasts some impressive figures. Gross advertising income for TV showed strong growth last year, with Kress, the German advertising trade magazine, citing increased ad income for 1997 at 9.7 per cent, or DM11.8 billion.

In the face of a troubled national economy with all-time high

unemployment, one industry is booming. The German television market is

now the most fiercely competitive in Europe and boasts some impressive

figures. Gross advertising income for TV showed strong growth last year,

with Kress, the German advertising trade magazine, citing increased ad

income for 1997 at 9.7 per cent, or DM11.8 billion.



The average household can receive at least 30 TV channels, both

terrestrial and cable, the vast majority of which are dependent on

advertising. The question now, however, is whether the German market is

ready for, or indeed willing to adopt, a new real-time on-screen airtime

trading system and what will the consequences be for those closely

involved?



The proposal comes from Adways, a joint venture through Reuters, the

global news and communications network, and Havas, the giant Paris-based

advertising group. With its Euro RSCG ad agency network and Mediapolis

media buying subsidiaries, Havas is a major player across Europe and

would appear to be the ideal partner for Reuters.



The trading platform is known as the Adways Exchange and is due to

launch in Germany this month. But what exactly is it offering and how

appropriate is it for the German market?



Under the existing and somewhat outdated system, trading is done on a

daily basis over the telephone. Adways aims to provide a software system

with a single database in which all the airtime available across the

German market is accessible by logging on to one system. Agencies will

then be able to gain access to the information they need without having

to come in and out of the different systems offered by Germany’s many

channels.



It is a concept being launched in the face of some scepticism. From the

broadcasters’ point of view, the Adways Exchange threatens to undermine

their powerful position in the media market. As Hans Ouwerkerk, chairman

of Adways, points out: ’In the German airtime market, the conflicting

interests are often manifest at the level of the information technology

managers at the prospective broadcasters - they don’t want to see their

jobs outsourced to the commercial sector.’ That is, to an independent

company like Adways.



This opinion is not shared by Jorg Koppen, head of advertising sales for

central Europe at MTV. With a system like Adways, he says, ’broadcasters

will be able to give a better service to the client - that’s not a bad

thing’.



And the fact remains that such a system would make it easier for

spending to be optimised, not just within one station but across the

whole market. Under the current system, money from the advertiser is

committed in advance. If a problem does arise with ratings, the money is

still in the bank for the broadcaster. Under the new system, advertisers

may very quickly take their business elsewhere with very little

opportunity for discussion.



So, could the introduction of on-screen trading result in a diminished

role for the media buyer, with agencies dealing directly with the

broadcaster?



Not according to Andreas Scholz, TV director at Initiative in Hamburg:

’The online system for TV buying will not substitute the TV buyer.

Knowledge of the TV landscape is necessary for using a tool like this

but the daily optimising of TV campaigns will happen at a much greater

speed.’



Mike Smallwood, the head of the European media network, Western

International Media, is more pragmatic about the onset of real-time

trading: ’Some planners and buyers might worry about being displaced

from the whole process but I think you’d have to be pretty small-minded

to think that way - the best people in the market see themselves as

acting consultants.’



And how do advertising agencies feel about the prospect of online

trading of airtime? Peter Schoming, chairman of Scholz & Friends in

Hamburg, is keen on the introduction of the system in Germany, a market

he describes as ’one of the biggest and most dynamic in Europe. We are

in favour of all new systems which will help us to operate more

efficiently and to make better financial and buying decisions. An online

trading system is the right tool to achieve this.’



Liz Workman, executive regional media director of Leo Burnett across

Europe, puts the other side of the argument. Because the ad industry is

essentially a ’people business’ a system like Adways might make it more

efficient but not necessarily better: ’When it comes down to it, we

trade on human relationships,’ she says.



If there is one thing that everyone seems to agree on, it is that a

common system is needed in the vast market that Germany affords.

However, it is debatable whether Adways Exchange will be the preferred

solution. The reason is the emergence of a rival system backed by GWA,

the German advertising association. It recently decided to give its

backing to a system offered by MGM, the sales operation for the powerful

Kirch group and one which represents a huge amount of German

airtime.



The situation has been further complicated since Havas took the decision

last September to sell Information et Publicite, a network of radio and

television sales houses spanning most of the European market. IP was

bought by CLT-UFA, one of Germany’s most powerful broadcasters with an

agenda of its own, and IP has since updated Cool, its own online trading

system.



If Adways is to convince the German market that it has the best system,

it will have to do it without the GWA. Christian Kuntz, the managing

director of Optimedia in Dusseldorf and the head of GWA’s online working

party, says: ’Adways asked us to force the big stations into line but we

said: ’No, that’s your job.’’



Whether Adways or one of the other consortia succeeds in conquering the

German market - if the new online system works, a single trading system

throughout Europe could follow. Now that would be a single market.



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