German adspend remains resilient

25 November 2011

BERLIN: Adspend levels are expected to remain relatively resilient in Germany this year, despite the challenging economic situation being experienced in the Eurozone, according to a new report.

ZAW, the trade body, predicted the German ad industry as a whole – including salaries, production costs and actual advertising expenditure – would be worth €29.9bn in 2011, up 1.4% on an annual basis.

Within this, main media advertising spend was pegged to hit €18.9bn, a robust performance when compared with 2010, albeit contingent on no further deterioration of the financial situation and the consequent knock-on effects of this on popular sentiment.

Looking ahead to 2012, ZAW predicted the overall advertising sector would witness a modest 0.4% contraction in value to €28.8bn, with media revenues sliding by 1.5% to €18.7bn.

Based on a survey of 41 of its members, ZAW found a third of companies anticipated that ad budgets would rise in the next six months, a figure that stood at 54% in similar research published in the spring.

An additional 63% believed the resources allocated to advertising would remain largely unchanged, up from 46% earlier this year, and 4% anticipated a contraction on this measure.

Only 27% of the panel expected domestic GDP to expand in 2011, down from 56% in the spring. These figures stood at 63% and 47% respectively for those forecasting that GDP would be flat.

Elsewhere, 74% of the panel highlighted industry-specific concerns related to greater governmental regulation, followed by the challenges of dealing with the "flood" of data now available on 72%.

A further 70% of the panel mentioned the increasing complexity of the media environment, and 52% pointed to rising pressure on self-regulation.

When assessing problems relating to consumer trends, 50% pointed to the explosion of online buzz, 49% cited issues relating to Germany's ageing population, and the cost of advertising posted 46%.

Data sourced from ZAW; additional content by Warc staff