ias Dopfner, the chief executive at Axel Springer Verlag, described the economic situation in Germany as "the greatest crisis since the end of World War II", there was a sharp intake of breath across the country. His comments were in stark contrast to the optimistic predictions made at the beginning of 2002 that had proved about as reliable as the weather forecast. The expected high has still not arrived and gross advertising turnover during the first half of this year dropped by 6 per cent for traditional media.
"Budgets will not increase in 2003 either, but at least they will be frozen at the 2002 level," Thomas Koch, the managing director of tkm Starcom, hopes. Yet on a positive note, Koch remarks that there has been some demand for new-business presentations. "After 18 months of silence, there appears to be some movement now," he says.
Positive signs of another kind have been noted by OMD's managing director, Klaus-Peter Schuz, who believes that strong brands are starting to dig deep again. Both Unilever and Procter & Gamble have announced that they will increase their advertising budgets during the second half of 2002. What's more, the trend toward hard selling can be seen in the budget increases of discount supermarket chains such as Lidl, which has increased its budget by 14 per cent.
But even if the situation doesn't get any worse, media owners and agencies will have to cut back drastically. The industry is unanimous that it will take several years to match the record-breaking turnovers of 2000, leaving German media companies with three options: downsizing staff, adjusting fees or concentrating on their core business.
Almost every big publishing house producing newspapers and magazines has had to lose up to 15 per cent of its workforce. Meanwhile, Gruner & Jahr sold its Berlin newspaper activities to Holtzbrinck because of flagging turnovers. All the same, the chairman of the board, Bernd Kundrun, is convinced that, even in a negative market environment, growth is possible via convincing editorial innovation. And he is determined to prove the point by launching a new women's magazine called Woman later this year.
As for newspapers, national dailies such as Frankfurter Allgemeine Zeitung and Suddeutsche Zeitung had to report losses for the first time in their respective histories. Die Welt has already halted production on its section covering Bavaria, which launched only last year amid great fanfare. Meanwhile, Suddeutsche Zeitung closed down its highly acclaimed youth supplement Jetzt.
TV stations are also feeling the pinch, and this extends beyond Kirch companies. Yet the insolvencies synonymous with Kirch have had a domino effect for many production companies. Strategies for 2003 are rather predictable.
Repeats such as Dallas, and shows with a low production cost, will be filling the schedules in 2003.
Regardless of its cataclysmic problems, the media have never been so popular in Germany. TV viewing figures have remained constant at 190 minutes a day, and radio consumption has increased at more than half of the country's stations. Meanwhile, the latest MA print media survey (see table, left) reveals that there are two million more regular readers in Germany. Yet although readership is up - news weeklies such as Stern and Focus are now passed on to about eight different readers - circulation on several titles has dipped.
And the trend for consolidation is alive and kicking in Germany. In April, the merger of the independent media agency Schmitter with the Havas-owned Media Planning Group was announced. And as a consequence of the takeover of Tempus by WPP, CIA and The Media Edge were merged to form Mediaedge:cia in Germany, as in other European countries. What's more, Thomas Koch sold his agency to Starcom Worldwide and now acts as the chief executive for tkm Starcom.
Will there be any more takeovers in Germany? "No," Koch says, baldly, "because there is hardly anything left to take over."
PAUL VOGLER CHIEF EXECUTIVE, MINDSHARE FRANKFURT
What is the most influential brand in your country?
Coke, Mercedes, Allianz and Bertelsmann.
What has been the most talked-about campaign this year?
Levi's (pictured below) and BMW.
What's the biggest surprise hit on TV this year?
What's the latest must-read marketing book?
Jim Collins: Good to Great.
Who are the best media sales teams in the country?
IP and Gruner & Jahr.
Which media personality gets the most column inches?
Middelhoff and Kirch.
Who are the most feared people in the industry?
Malone, Murdoch and Berlusconi.
What's the biggest media party of the year?
Where's the best place to meet clients?
At a restaurant.
What is the biggest single issue facing Europe's media industry?
Recession and media as a commodity.