Reading the headlines of Germany's business press these days, you
could be forgiven for thinking the German media market has ground to a
halt somewhere between crisis and disaster. After years of sizeable
growth, in the first six months of 2001, ad revenues went down by 3.5
per cent. Trade magazines were worst hit by the slump - their ad
revenues declined by 11.7 per cent. But daily newspapers and radio
followed, with ad revenues dwindling by 8.3 per cent and 5.9 per cent
respectively. Yet TV seems to have fared quite well so far, with a less
dramatic decline of only 1.6 per cent.
Yet compare these figures with last year's AC Nielsen advertising
statistics, which broke all existing records, and they don't actually
look so bad.
Last year, flotations, the liberalisation of the German power market and
massive adspend from the dotcom and telecom sectors meant that the media
Looking at the two-year period overall, there will still be growth in
revenue, even if the climate does not improve noticeably by the end of
"We are not in a recession - it's just that the media isn't doing as
well as it did last year, for once," Alexander Ruzicka, the manager of
Germany's biggest media agency, HMS-Carat, comments. Klaus-Peter Schulz,
the manager of OMD, agrees: "After a boom year like 2000, a decline was
on the cards."
So have the media agencies noticed any trends in where money is being
Ruzicka says: "We have noticed a shift of budgets to below-the-line
advertising, as well as to innovative patterns of advertising and
As an example, daily newspapers don't normally pay much attention to AC
Nielsen's statistics, which take into account display advertising while
ignoring the bulk of their revenue from classified ads. Yet a survey by
the newspaper trade body ZMG confirms the decline in classifieds.
Whereas the job and real estate ad markets continue to perform well,
newspapers are losing national clients. Small wonder, though, seeing as
the advertising battle between Mannesmann and Vodafone is over, and the
telecoms have cut their budgets by up to a third.
In the magazine sector, the specialist magazines, as well as IT and
economics periodicals, have been worst hit and, like elsewhere in
Europe, three e-business magazines - Business 2.0, Wirtschaftswoche
E-Business and Netinvestor - have folded.
In TV, RTL and RTL2 are on a winning streak, while Sat.1 and ARD are
losing advertisers. TV advertising rates for 2002 have increased only
moderately in the main, although some stations have recognised when
they're on to a winner: a spot placed around Who Wants to be a
Millionaire? (RTL) will cost 7.5 per cent more next year.
The current decline in ad revenues could seriously impact on how much
media owners are charging agencies. The managers of German media
agencies agree that negotiations are now conducted in quite a different
manner to previous years.
In the TV sector, the two leading agencies, SevenOneMedia (Pro7, Sat.1,
Kabel1, N24, Bloomberg TV, Ballungsraumfernsehen) and IP Deutschland
(RTL, RTL2, Super RTL, RTL-Shop, Vox), provide solid negotiating ground
for their clients along the lines of: "If you are not prepared to offer
favourable conditions, we'll make a deal with the competition."
Sat.1 has already felt the effects of this new approach: Its major
client, Masterfoods (formerly Mars Effem), distributed its 2001 media ad
budget of $175 million among RTL and Pro7, leaving Sat.1
empty-handed. The Sat.1 balance sheet consequently shows a loss of about
$50 million in advertising revenues for the first half-year 2001
- a deficit of 6.1 per cent - while RTL noted a growth of 6.6 per cent
for the same period.
Now the planning phase for 2002 is already under way. While it is early
days yet for detailed comments on individual stations or magazines,
media owners and the managers of the media agencies for 2002 expect
Klaus-Peter Schulz speculates that growth might be between 2 and 3 per
cent, while Ruzicka's forecast is even better: "Between 4 and 5 per
cent." So perhaps recent headlines proclaiming "slump" and "crisis" have
been a little dramatic.
JUERGEN BLOMENKAMP - COO, MEDIACOM, GERMANY
What is the brand with the most influence in your country?
Brands such as Audi and Nokia are the new stars setting the trends and
cornerstones in communication (both are handled by MediaCom)
What has been the most talked-about campaign this year?
The new Audi TV campaign ("Elvis", below) was the most talked-about
campaign this spring
What has been the biggest surprise TV hit this year?
The success of the new programme Quiz Show Mania was a surprise,
although the absolute clear market leader has been Who Wants to be a
What's the latest must-read marketing book?
Sorry, I am a convinced non-reader and like to learn from my own
Who are the best media sales team in the country?
The ad market has had to face a very weak year and I don't see any real
winners this year
Which media personality gets the most column inches?
Christiane zu Salm and her very brave new TV approach for tm3. The first
real interactive TV concept in Germany has generated a buzz
Who is the most feared person in the industry?
Allan Greenspan because everyone is desperately hoping for a quick and
substantial recovering of the US economy
What's the biggest media party of the year?
The TV presentations in Dusseldorf in August
Where's the best place to meet clients?
The TV presentations in Dusseldorf, as well as MediaCom's conference
What is the biggest single issue facing Europe's media industry?
The vanishing power of mass media is the biggest issue we all have to
face. The whole media scene is crumbling into smaller and smaller
Over the past decade, communication became more expensive and less
The end of powerful mono campaigns is near. In the future, push
advertising must be transformed into pull advertising, which is valuable
and, therefore, welcomed. In the end, we have to create touching moments
for the consumer.