France: Tired of waiting

Consumers and clients are acting prudently but growing impatient for an upturn in the French economy. When it comes to the French economy and its impact on advertising, there are a lot of metaphors knocking around. Some say the country is at a crossroads. Others say it is a fuse, quietly burning its way towards an imminent explosion. But perhaps the most appropriate image is that of a bunch of party guests hovering beside a buffet table - and all waiting for somebody to make the first move.

"There is a willingness to act but everyone is hesitating," Benoit Devarrieux, the co-founder of Devarrieuxvillaret, says. "Very soon now, I believe, all that will change. The pressure will build and then, suddenly ..." he makes an gesture signifying a detonation "... great things will happen."

But let's get away from the similes for a moment and face the facts.

According to France-based Initiative's recent report, Global Advertising Expenditure 2004, the country ranks sixth in the world market with a spend of $11.3 billion (having tumbled from fifth place in 2000, with a spend of $11.9 billion). Press takes the largest slice of the pie, with $5.5 billion. Overall expenditure is expected to increase in 2004 but, everyone agrees, not dramatically enough. "The business has been more or less flat since 2001," Pascal Gregoire, the president of CLM/BBDO, comments.

"Things are beginning to look a little better, with growth of about 3 per cent last year and maybe 4 per cent this year, but there is still a strong sense of 'let's wait and see'."

Mercedes Erra, the president of BETC Euro RSCG and the chairwoman of Euro RSCG France, has a similar analysis. "Both consumers and clients are holding back," she says. "There is a feeling of prudence and lingering disquiet. This is a time of saving rather than spending."

However, Olivier Altmann, the co-president of Publicis Conseil, says French business is becoming increasingly tired of playing the waiting game. "Everyone predicted a recovery at the start of this year but it is much slower in coming than we would like. The market is extremely fragile and each time it begins to climb to its feet, another tremor knocks it down again."

France is feeling the impact of external and internal politics. Doubts over the Iraq situation have caused stock markets across the world to wobble.

But France has its own particular problems. Perhaps the most controversial is the 35-hour week, a measure originally introduced to increase leisure time and boost employment, but which is largely seen to have achieved one without the other.

"The problem is the measure was introduced during les annees fortes, the boom period," Gregoire says. "From that perspective it made sense. But now it's damaging smaller companies who can't afford to cover with more staff."

Add other problems - an unpopular prime minister, unemployment, some of the steepest taxes in Europe and regular strikes by everyone from teachers to the entertainment profession - and it is easy to understand why people are keeping their hands on their wallets.

But let's not be entirely negative. France is still well ahead of Italy and Spain in the adspend rankings, its creative work is regarded as among the best in the world and, with Publicis and Havas, it is home to two of the largest international communication groups.

French clients are showing a renewed willingness to commit to advertising.

According to the French pollster TNS Media Intelligence, the top spender in 2003 was the dairy giant Danone Ultrafrais, which doubled its spend to 309.5 million euros, largely to promote its fresh products (yogurts and desserts). The next largest spender, Renault, was less confident, with its commitment falling by 1.97 per cent. Just below, in third place, Nestle increased its spend by more than 36 per cent to 240.6 million euros last year.

TNS Media Intelligence adds that while growth was slow in press and TV - 1.2 per cent and 4 per cent respectively - radio benefited from a 15.7 per cent increase and the internet from a huge 50.8 per cent rise. "Radio is seen a low-cost, effective mass medium, while the web has gained from the growth of broadband," a spokesman says.

France, in common with most markets, is expecting to benefit from Euro 2004 and the Olympics. The French are likely to be particularly interested in the football tournament because it is a chance for the national team, Les Bleus, to regain its dignity after the embarrassment of the last World Cup. TF1 shares the broadcast rights with the public broadcast network France Television, which will screen the final on France 2. France Television also shares the live broadcast rights to the Olympics, this time with Canal+. They are no doubt relieved that this time around - unlike with the Sydney games - the events will not take place in the middle of the night.

There is also the 2004 Mondial de l'Automobile (World Motor Show) in Paris from 25 September to 10 October, which should spark some automotive spending. Some predict a strong burst of telecoms spend, prompted by the arrival of the third generation of mobile phones. (Cegetal/SFR already boosted its expenditure by 4 per cent to 166 million euros in 2003.)

As far as TV spend is concerned, recent developments may nudge matters along. Since the start of this year, the press has been allowed to advertise on TV for the first time (previously, it was regarded as a competing medium).

Not only that, but retail chains - formerly banned from TV in a measure to protect small shopkeepers - can now advertise on satellite channels; although they will have to wait until 2007 before they can appear on terrestrial television.

However, Gregoire says: "Nobody thinks retail chains will make much of a contribution to the figures until they are allowed on terrestrial. To be frank, the presence of magazines on television has been disappointing. Their work is not very strong from a creative point of view, and publishers tend to run short promotional campaigns. There is no feeling that they are trying to build brands."

But at least publishers are showing their teeth when it comes to spending money. There have been around a dozen magazine launches so far this year, including revamped versions of women's titles Glamour (Conde Nast) and Biba (Emap), the gossip magazine Public (Hachette Filipacchi), and a bi-monthly Marie Claire spin-off called Mods.

Add to that various TV listings titles and a free weekly sports newspaper, Sport (think Metro with football), and you have quite a collection. The consensus is that publishers have become tired of waiting until the market recovers and have decided to get proactive.

Certainly, the French public seems to have a thirst for media and for information about the world in general. Compared with 20 years ago, this is an open, international and highly sophisticated market. The French are more European than the English and just as interested in fashion and trends. Advertising may not yet have the status of a national sport - as it does in the US and, increasingly, the UK - but consumers have moved from contempt to acceptance.

The mooted changes to French legislation reflect this shift. At the moment, advertising time on the public channels France 2 and 3 (which fall under the France Television umbrella) is restricted to eight minutes an hour.

The privately owned TF1 and M6 are allowed to screen 12 minutes an hour because they do not receive money from the licence fee.

But the government is considering increasing the ad minutage on France Television to 12 minutes. Not only that but it may allow the channels to introduce breaks in the middle of programmes for the first time.

TF1 and M6 could also be given permission to break films twice, rather than just once, and to increase advertising time to 15 minutes an hour.

It is all part of European harmonisation and a domestic push to fund quality drama in the face of a flood of reality TV.

Other doors are also opening. Legislation surrounding alcohol advertising has been formidable since the introduction in 1993 of the Loi Evin. This banned alcohol advertising from television and cinemas, and reduced print and posters to little more than pack shots. In May, however, the French parliament agreed to relax the rules slightly - but only for wine. Now the wine industry will be able to run campaigns that include such details as "the wine's region of origin and sensorial characteristics such as aroma and taste". The wine industry had lobbied the government for a change in the regulations to help it combat increased competition from rival producers in Australia, the US and Chile.

Once upon a time, consumer groups might have greeted both of these moves with outrage. But this time around they have been relatively quiet. It could indicate that consumers are ready to accept more marketing messages.

But advertisers should tread carefully, Erra warns. "French consumers are receptive to intelligent brands," she says. "They accept that we live in a world of communication. But one must not underestimate them: they respect the brands that treat them with respect."

AD MARKETS BY EXPENDITURE

1 USA 154,609,783

2 Japan 36,888,645

3 China 22,715,401

4 Germany 19,160,338

5 UK 14,261,757

6 FRANCE 11,347,242

7 Italy 8,272,491

8 Spain 6,279,395

9 Canada 5,569,741

10 Australia 5,051,130

Source: Initiative, Global Advertising Expenditure 2004

(figures in $000s).

THE TOP 10 ADVERTISERS IN FRANCE

Danone Ultrafrais 309.53

Renault 283.86

Nestle 240.64

Carrefour 213.92

E Leclerc 206.16

Universal Music 180.40

Procter & Gamble 173.60

Cegetel/SFR 166.49

Citroen 160.76

Peugeot 160.64

Source: TNS Media Intelligence, 2003 (millions of euros).

FRANCE'S MEDIA SPLIT

Press 5,509,710

Television 3,623,453

Radio 1,029,850

Outdoor 1,108,813

Cinema 75,417

Total1 1,347,242

Source: Initiative, Global Advertising Expenditure 2004

(figures in $000s).

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