German adspend rises

19 January 2012

BERLIN: Advertising expenditure levels rose by more than 3% in Germany last year, but the market started to lose momentum as the crisis engulfing the Eurozone gathered pace.

Nielsen, the research firm, reported that above-the-line media spending climbed by 3.5% in 2011, reaching €25.8bn, based on ratecard estimates.

This overall acceleration constituted a slowdown on the 5% expansion logged during the first half of the year, as growth moderated to 2.1% in the closing six months of 2011.

More specifically, while totals in January rose by 10% year on year, the figures from December showed a lift of just 2.2%, indicating the negative impact of continuing economic instability.

Newspapers endured a 2.1% contraction in ad sales to €5.2bn. Aldi, the discount retailer, was one firm which significantly reduced its outlay through this channel, cutting back by €135m.

Television recorded a 1.8% increase in demand to €11.1bn and consumer magazines enjoyed a 1.4% improvement, securing €3.6bn in all.

Online display expenditure rose by 22.5% to €2.9bn, radio was up 3.9% to €1.4bn, outdoor witnessed an 11.5% leap, taking it to a value of €1.1bn, and cinema expanded by 17.6% to €96m.

Among the broader trends identified by Nielsen was the growing amount of revenue attributable to new technologies, as cloud computing services yielding €27m in print adspend, while Apple's iPad2 posted €26m.

Internet companies increased their collective outlay by €72m to €284m, not least because Preis24, the price comparison site, and MyVideo Broadband, both put a heavy emphasis on TV.

Less favourably, retailers reduced their combined budgets by €202m year on year, including a €96m contraction for department stores and €90m on the part of discounters.

The dairy segment was also down by €135m in 2011, as major manufacturers such as Danone opted to pare back their outgoings.

Ludger Wibbelt, Nielsen's managing director, said predicting the outlook for 2012 was "currently difficult", as financial uncertainty threatened to undermine the positive effects of sporting events like UEFA Euro 2012 and the Olympic Games.

Data sourced from Nielsen; additional content by Warc staff