As with many markets around the world, Germany has seen a
dotcom-fuelled explosion in advertising spend come to an abrupt end.
Whereas 1999 and 2000 were exceptional years, with the latter 16 per
cent up on the former in terms of media spend, 2001 began in a more
Perhaps we should substitute the word "sober" for restrained, given that
beer advertising spend in the first quarter was down almost 17 per cent
on the first quarter of last year. But if beer is worse than flat it is
as nothing to the collapse of the telecoms/internet category, where
spend is reckoned to be 41 per cent down in comparison with the first
three months of 2000.
Overall, though, the picture is not quite as bad. ACNielsen figures
point to gross first quarter media spend of DM8.1 billion, down a not
too drastic 3.7 per cent on a year ago. The TV, magazine and newspaper
categories all experienced a decline, with radio holding steady and
outdoor bucking the trend with a 10.2 per cent rise.
Outdoor's positive performance arguably illustrates the problems facing
the German marketplace. With media costs having risen by about 50 per
cent over the past five years at a time of increasing media
proliferation, there has been growing concern among clients about
advertising cost inflation.
This has been exacerbated by genuine concerns as to the effectiveness of
advertising in an ever more fragmented media environment.
"The challenge for everyone at the moment is to show the effectiveness
of media," MediaCom Germany's chief operating officer, Jorgen
Blomenkamp, says. "It's a difficult time for new launches in old media.
The marketplace is already so fragmented that the last thing we need is
new magazine titles and new TV stations. Maybe in the long run outdoor
will emerge as a big winner."
MindShare Germany's managing director, Paul Vogler, recalls that last
year there were no good quality prime time TV slots to be had in the
spring, as they had all been snapped up long in advance. This year
availability has been far better.
Vogler thinks it is tough to predict exactly what will happen in the
advertising marketplace in the coming months, especially given the
widespread talk of economic slowdown. He expects the year to yield a
slight increase in advertising expenditure.
OMD International's associate media director Oliver Stroh says he has
noticed German TV stations becoming more cost-conscious, cutting back
their investment in new programming. This has implications for
advertisers, for if there is a dearth of quality new shows it is sure to
have a negative impact on the viewing audience.
TV is definitely having a tougher time of things than in the recent
past, yet it still accounts for the lion's share of advertising media
spend in Germany. Last year, ACNielsen says TV advertising was worth
DM15.6 billion out of a total advertising media spend of DM35.5
OMD, Carat and MediaCom are the three big media agency players in the
country, between them accounting for around 40 per cent of media
billings and nearly half of TV spend. Bertelsmann-controlled RTL, and
Sat1 and ProSieben - both owned by the Kirch family - are the leading
commercial TV stations. Limited amounts of commercial airtime are also
available on state-owned channels ARD and ZDF.
In the consumer magazines sector, Burda-owned Focus led the way in
advertising revenue in quarter one this year, according to ACNielsen,
with spend of DM110 million. Spiegel and Stern occupied second and third
spots on the rankings.
Less successful for Burda was the launch of weekly title Vivian late
last year. The magazine was axed just three months after its debut when
its circulation slumped to around 130,000, well short of the targeted
level of 250,000 copies. Clearly, the cluttered marketplace is making it
harder than ever to establish fresh media brands and media owners are
acting swiftly and decisively if product fails to catch fire with its
Amid such market conditions many observers were surprised that
Verlagsgruppe Handelsblatt pressed ahead with the launch of its
Wirtschaftswoche e-business title in the middle of March. Given the
problems experienced by many new economy businesses, it seemed a curious
time to be launching a media product aimed squarely at this audience.
Certainly it will be intriguing to see how it fares in the coming
Bertelsmann-owned publisher Gruner & Jahr says it has no launches in the
pipeline and is keeping a weather eye on market conditions. However, a
spokesman says the company is fairly optimistic that ad spend will rise
again in a few months.
G&J's last major launch was Living at Home, which first hit the
newsstands last November. This monthly home interest title has a
companion website and there are plans to create a TV show around the
brand later this year.
Conde Nast, meanwhile, has taken its US product Glamour into the German
market this year. Just as with the simultaneous UK launch, the magazine
stands out by being handbag-sized. Bauer, with weekly magazine Vida, and
Burda (again) with fitness title Wellfit are among the big players to
chance their arm with new offerings.
The fitness magazine market is already very competitive, but if there is
anything the Germans enjoy far more avidly than sweating off pounds on
the treadmill it is pushing their vehicles to maximum speed on the
It is revealing to note that eight of the top 20 advertisers in the
first quarter of 2001 were from the automotive sector.
Opel was the biggest spender among the car companies, ahead of
Volkswagen, Ford, Renault, Peugeot, Fiat, DaimlerChrysler and Audi.
However, Opel were only in fourth spot overall, behind Ferrero, Procter
& Gamble and Media-Markt. Global mega-brands McDonald's and Coca-Cola
featured in 14th and 19th position respectively.
"More light!" that German literary great Johann Wolfgang von Goethe was
meant to have called out as his dying words in 1832. There are many in
the German media marketplace today who also fervently wish for greater
illumination, so as to reveal whether there will be a return to healthy
growth or not in media spending over coming months.
GROSS ADVERTISING SPEND PER MEDIA GROUP
Medium Gross advertising (DM millions) Change Change
spend absolute %
Newspapers 5,759 5174 585 11.3
Magazines 5,729 5006 663 13.1
Trade press 685 656 29 4.5
TV Total 10,749 9340 1408 15.1
commercial 10,041 8702 1339 15.4
public 708 639 69 10.9
Radio 1,503 1326 177 13.4
Posters 679 641 38 6.0
Total 25,103 22202 2901 13.1
Source:AC Nielsen Werbeforschung. Based on 1-3 quarter 2000 vs 1999.