Goldbach in the red, but not because of quota dispute
Although the new method of measuring TV ratings has resulted in private broadcasters seeing their market shares drop by an average of about 20 percent, this did not put a dent in Goldbach’s finances in 2013. Instead, the advertising agency struggled with other problems.
The rapidly growing company suffered setbacks in its foreign expansion: Goldbach withdrew from the unprofitable business in the Czech Republic. In Poland, Romania and Germany, it adjusted intangible goodwill downward by around CHF 20 million, as announced ad hoc in December. The launch of the Internet TV box Wilmaa, through which Goldbach intends to distribute advertising, planned for last Christmas, is also still a long time coming. Goldbach has reduced its stake in the company from 75 to 20 percent and written off its investments, depressing profits by 4.7 million francs. Below the line, Goldbach posted a loss of 16.1 million francs - after a profit of 9.2 million francs in the previous year. Adjusted for the special effects of around 25 million francs, the operating profit increased by 32.6 percent to 9.3 million francs, as the new company management with Michi Frank at the helm emphasized in Zurich on Thursday.
Take a breather
Goldbach is reviewing its strategy and wants to focus on its core competencies, Frank said. The board of directors has been chaired since last year by former Swisscom CEO Jens Alder, who wants to turn Goldbach into a growth story again, as he said at the presentation of the financial statements. A withdrawal from the still loss-making Central European business is not on the agenda. After cutting 37 jobs and withdrawing from the Czech Republic, an operating profit is also expected here in 2014. Overall, it will be a transitional year with stagnating sales and a profit in line with 2012 (CHF 9.2 million). Goldbach sees growth opportunities in particular in the online business and in the increasing merging of media genres. Sales of Internet video advertising, for example, already increased by 28.9 percent last year. The still small mobile segment even doubled its sales. However, Goldbach continued to generate two-thirds of its sales from TV advertising, much of it from the Swiss advertising windows of the German families of RTL and ProSieben Sat.1 channels. Despite the legal dispute and the associated uncertainty surrounding Swiss TV ratings, Goldbach increased its sales in the TV business by 3.9 percent to CHF 310.6 million.
Reacted to new TV ratings
Division President Alexander Duphorn explained that the increase was not only due to the five newly marketed channels (DMAX, RTLnitro, n-tv, sixx and N24). Goldbach also countered revenue losses by guaranteeing advertisers reach. In concrete terms, this means that the spots were repeated until the promised audience figures were achieved. The new TV data only became known in the second half of the year, after there were technical problems and then the 3+ station obtained a ban on publishing the data. Faced with massively lower market shares, advertising prices per viewer were raised. After all, advertising campaigns that had worked before were no less doing so only because of a new ratings measurement method, Duphorn said. In addition, more advertising time was sold during the day, where the private stations suffered lower market share losses.
According to Duphorn, the absolute prices for TV ads across all stations fell by only a single-digit percentage on average. In 2014, however, he expects a slump in the TV business with a continuing decline in reach. In addition, the Olympic Games and the World Cup will be watched primarily on public stations. (SDA)
