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The special recession fear of German advertisers

After the crash during the corona pandemic, the advertising market in Germany has recovered – at least for the time being.

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The special recession fear of German advertisers

After the crash during the corona pandemic, the advertising market in Germany has recovered – at least for the time being. In 2021, revenues from so-called commercial communication rose by 5.5 percent to 47.3 billion euros compared to the previous year. This is reported by the Central Association of the German Advertising Industry (ZAW). However, the development was not the same in every division.

The media's advertising revenues, for example, have risen above average, above all in the growing digital sector, but also in the television, cinema and newspaper categories.

The statistics show that the media were even able to surpass the level before Corona with net sales of 25.9 billion euros. And significantly more money has also flowed into sponsorship.

Advertising prints and catalogues, on the other hand, continued to fall – but above all promotional items, i.e. small gifts from companies, associations and institutions such as calendars, pens or lighters.

And there was also less direct postal mail in 2021 than in the previous year, which was advertising weak anyway. With radio, on the other hand, less advertising money flowed into the classic linear program.

According to information from the US market research company Nielsen, the third quarter in particular was comparatively weak compared to competing media. In the case of audio spots in streaming programs, on the other hand, there was a sharp increase.

But what's next? In 2022, so the hope of the industry, the development should finally have been positive in all areas and should have exceeded the pre-corona level of 48.3 billion euros.

Everything started well in the first half of this year, says the Central Association of the German Advertising Industry with reference to current figures from Nielsen, which report an increase of 2.6 percent.

In the meantime, however, there is again an alarm mood in the industry. It accounts for 1.3 percent of gross domestic product; 900,000 employees work in the German advertising market.

They are now worried about the weak economic development. Because the equation still applies: if the economy is doing well in general, the advertising industry is also successful.

But now Germany is on the verge of a recession. Andreas Schubert, President of the Advertising Industry Association, says: "Advertising expenditure falls in difficult economic situations."

Especially since high inflation is another burden. "If significantly more money has to be spent on petrol, electricity, heating oil, gas and many groceries, consumers have less financial means for larger purchases," explains Schubert. Accordingly, there is less advertising.

Pressure on the advertising industry also comes from politics. "The coalition agreement of the traffic light government only contains bans in relation to our industry," complains Schubert, citing the tightened regulations for alcohol advertising as an example.

This makes the uncertainty in the industry even greater. Instead of standing by the companies and especially the advertising media in the crisis, additional problems would be created. In the case of alcohol, for example, consumption figures have been declining for years anyway. “Quality and variety of media is more important than ever, especially in these times. However, these media need sustainable financing. And that requires advertising.”

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