Sentiment worsens in German ad market

15 November 2011

BERLIN: The number of German advertisers planning to increase their adspend is declining, mirroring the challenging trading climate faced by many companies.

OWM, an industry body representing over 100 advertisers, agencies and media groups, surveyed its members, and found 47% of brand owners expect to boost ad expenditure levels next year.

This constituted a contraction on the score of 56% recorded in a similar study published last year, and suggests the difficult conditions facing the Eurozone are exerting an impact.

A further 22% of marketers will maintain their outlay, a total reaching 29% in 2010, and 31% intend to cut back, whereas only 14% outlined such a strategy last year.

Economic factors are apparently playing a central role, as a modest 10% of firms forecast the financial environment will improve next year, down from 49% on an annual basis.

The share of respondents anticipating GDP would remain flat rose from 46% to 77%, while the proportion describing the position as "bad" or "very bad" expanded from 2% to 13%.

Overall, 87% of companies are likely to enhance online adspend rates, an approach adopted by 76% of businesses in the 2010 poll.

Elsewhere, 23% of contributors agreed print media was increasingly vital to their plans and 36% took the opposite view, figures standing at 21% and 33% for television.

By contrast, 90% of the panel expect social media expenditure to rise in the coming year, but although 49% concurred it had a "high" or "very high" level of importance, 51% afforded it a more limited status.

Equally, just 13% of organisations believed their brands were being "strongly" influenced by this medium, 64% thought social media did not have a weight greater than other channels, and 5% stated it had comparatively harmful effects.

Return on investment is another key area of interest, but 85% of advertisers asserted there was a lack of evidence for proving payback, and 70% said such concerns restrained incremental spending via the web.

Additional issues included ensuring transparency in the advertising market on 47%, while 36% of the sample mentioned media price inflation as a core worry.

Data sourced from OWM; additional content by Warc staff