Oz and German Adspend Heats Up - But Forecast is Cool

15 April 2005

Australia's advertising market topped the magic figure of A$10 billion ($7.7bn; €6bn; £4.1bn) for the first time last year.

The A$10.4bn spend was a rise of 10.4 per cent over 2003, but includes directories advertising. Without this, the market rose 10.8 per cent to $9.1 bn, according to numbers released by the Commercial Economic Advisory Service of Australia.

However, the popping of champagne corks has been stilled by the pessimism of leading industry figures who believe the market will cool by the end of 2005 and have revised downward their earlier, more bullish forecasts.

Says Fusion Strategy's Steve Allen: "The market … will be a few points off last year and the key to that is retail sales. We do hear some media are having a really tough time of it. Newspapers and radio are having a rough time. We hear consumer magazines are booming."

Michael Anderson, ceo of top radio broadcaster Austereo, confirms rises in radio revenues will be in single digits rather than the 14.2 per cent notched in 2004.

TV is also said to be slowing. Network Nine sales director Vince Lothringer says the market is "certainly softer than last year. It's probably sitting around five per cent. It's nowhere near the eleven per cent we had for the same time last year but five per cent growth is more than acceptable."

  • Meanwhile, in Europe, the struggling economy continues to affect Germany's advertising market.

    Despite a rally in the first quarter of 2005 to €4.32bn, a rise of four per cent over the same time last year, Ludger Vornhusen, chairman of Nielsen Media Research, does not expect the trend to continue.

    Discount retailer Aldi has frozen budgets which Vornhusen believes may indicate the end of the boom in media spend by this sector.

    Across the media, TV took €1.8bn (up 2.6 per cent) and newspapers €1.2bn (up 7.4 per cent). Magazines dropped two per cent to €880m. Radio emerged the big winner of the first quarter by attracting €280m in spend, up 25.6 per cent.

    Data sourced from Sydney Morning Herald and mandmeurope.com; additional content by WARC staff