Werbewoche spoke to Andreas Weiss, Strategic Resources Director at Zenithoptimedia Switzerland, who worked on the study.
A recession is expected in the eurozone, so much so that six central banks are now flooding the markets with cheap money. And here comes Zenithoptimedia, forecasting a 2 percent increase in gross advertising expenditure for Western Europe in 2012 and even 4.7 percent growth in global spending. What led you to this assumption?
Andreas Weiss:Our international network has a prime position in most markets, and our local agencies have relatively large clients and are therefore very good at estimating what could happen next year based on the budgets that have already been announced. In short, we are not currently experiencing a slump at all, but rather slight growth even in Europe. Moreover, Europe is not the world - and the global economy is doing quite well: Things are still looking good in Asia, Japan is recovering very quickly and the US is also doing considerably better economically than Europe. All of this is contributing to the fact that the global advertising volume is growing rather than falling. Of course, we are not clairvoyant: if the euro really does go downhill and there is a really deep recession, then the situation in the advertising market would also change.
In the study, you also refer to the US presidential elections, the Olympics in the UK and the European Football Championships as growth factors. How big is their influence really?
You can't say that globally. The elections in the USA naturally have an impact primarily there, while the Olympic Games and the European Championships have more of an impact on Europe. On an annual average, however, this is limited to a low single-digit percentage range. However, this can be enough to turn a slight minus into a plus.
What would the forecasts for Western Europe look like without the two sporting events?
It is impossible to say, as we are working from announced budgets, some of which are already linked to these events. But it stands to reason that it would be less.
Your current study is positive, but compared to your earlier forecasts, you have steadily revised the figures downwards. In April, for example, you assumed that global advertising expenditure would increase by 5.8 percent to 498 billion dollars in 2012; now you are expecting 12 billion dollars or 2.5 percent less. Why is that?
The April forecast was based on data that we had collected in February, before the tsunami in Japan and the reactor disaster in Fukushima. These were events that could not be predicted - but they made a huge dent in the Asian and Japanese economies. In addition, the situation in the eurozone also worsened significantly, which did not leave advertising budgets unscathed.
You give the all-clear for Switzerland: no second economic crisis is expected in this country and gross advertising investments are expected to exceed the CHF 5 billion mark for the first time in 2012 (+2.8 percent).
I would like to differentiate here. We are not saying that no economic crisis is to be expected, but the way things look at the moment, the Swiss advertising industry will not collapse. This is because Switzerland is not as caught up in the euro crisis as other countries. In Switzerland, we had a record year in 2010, 2011 will be another record year and next year - if the forecast is correct - we will have another record year. But growth is slowing down, you can already see that. In short, I assume that any recession will have less of an impact on the Swiss advertising market than in 2009.
The BSW agencies, which include Zenithoptimedia, are more cautious about the near future. The vast majority expect the advertising market to decline slightly or remain stable at best in 2012. Are they wrong?
A forecast is always based on the best information you have. Our colleagues certainly have a different basis than we do. We start from our announced budgets for next year and from the cautiously optimistic assessment of the advertising market and the general economic situation. Our customer structure certainly also plays a role here. Major clients may be somewhat more cautious next year, but we also serve a large number of SMEs, and their budgets are relatively stable.
How have your forecasts matched up with reality so far?
Pretty good. 2011 got off to a pretty rousing start, with double-digit growth rates in some cases in the first few months, but then came the slowdown. Because we had anticipated this, we forecast advertising growth of between 5 and 6 percent for 2011 from the outset - and that is roughly where we are heading. We now hope that the assumptions for 2012 will also come true.
In Switzerland, you describe TV and online as the fastest growing advertising media in 2012. Why is that?
TV is a medium that has boomed in recent years, and at the moment there is virtually no availability. However, as soon as demand outstrips supply, prices also rise. This is exactly what will happen next year, which is why advertising investments alone will have to be higher. In addition, with the TF1 advertising window in French-speaking Switzerland, a new revenue driver will be fully bookable from 2012, which will give the TV medium a further boost. Online, on the other hand, has already recorded high growth rates - albeit starting from an extremely low level. However, this medium is now being discovered by more and more Swiss advertisers because we have almost 100% coverage among the under-50s in Switzerland. Nevertheless, it will still be years before online is where it actually belongs in terms of usage.
According to the study, advertisers have learned lessons from the last crisis and are in a better position today than at the beginning of the last recession. What have they learned and what impact will this have?
When a recession threatens, advertisers are usually the first to cut advertising budgets. But it's not as if the companies don't have any money. They have money! Therefore, those who want to gain market share should try to do so now by behaving differently from most of their competitors and not cutting their advertising budgets, but rather expanding them slightly. All the more so as consumers in Germany, for example, are not saving money at the moment. On the contrary: they would rather spend their money than leave it in the bank. This is of course a great opportunity. We assume that some advertisers have also noticed this.
Let's take another look at the important Japanese market. You said that it has also recovered quickly in terms of advertising expenditure. What does the future hold?
2010 was also a good year in Japan, followed by a slump in 2011 due to Fukushima. In the meantime, however, the advertising market has recovered significantly, not to the extent that it is in a better position than last year, but over the year as a whole there was not the super slump that would have been expected after Fukushima. It is now expected that the advertising market will grow again by 3.1% in 2012.
Interview: Markus Knöpfli
