German advertising market on the upswing

The German advertising industry is expecting a significant upturn in 2006. The Central Association of the German Advertising Industry (ZAW) forecasts that advertising investments will increase by two percent to more than EUR 30 billion compared to the previous year. However, due to the difficult economic environment, the growth rate in the advertising business in 2007 will be between zero and one percent, somewhere between stagnation and a sluggish economy, explained association president Hans-Henning Wiegmann to "Werben&Verkaufen". Wiegmann called on the economy to invest more in advertising. At 1.32 percent, the share of advertising expenditure in gross domestic product is as low as it was in 1959. The economic framework conditions for commercial communication did not improve in 2005 either. In particular, the ZAW criticizes the excessively high non-wage labor costs and excessive tax levies as well as the lack of flexibility on the labor market.193 million (+1%) to 19.78 billion euros in 2005, based on the business surveys of the ZAW member associations. In 2005, daily newspapers were able to maintain their leading position as an advertising medium, although net revenues shrank by 1.9 percent to EUR 4.42 billion. Television stations recorded an increase of 1.8 percent to EUR 3.93 billion and advertising papers increased their income by 3.4 percent to EUR 1.84 billion. The strongest increase in revenue was seen in online advertising, which rose by 22.5 percent to 332 million euros.