Media year 2019: 40 percent of all advertising revenues to Google & Co.
Advertising revenue for Swiss media companies will continue to decline in 2019, while Google and others will continue to grow. That is the finding of a new expert survey conducted by Publicom.
2018 was a turbulent year in the Swiss media landscape and was characterized by concentration processes, hiring and takeovers. In the first issue of 2019, DELPHInarium, Publicom's expert panel, asks: What do media experts expect from the already not-so-new year?
According to the experts surveyed, there is no foreseeable trend reversal for the "old" media in 2019: they expect advertising volumes for press, TV and radio to continue to decline. While the cumulative sales of these three categories amounted to CHF 2,214 million in 2016 and CHF 2,042 million in 2017 (figures from the Swiss Advertising Statistics Foundation), the media experts estimate the volume for 2019 at CHF 1,849 million (figure below). This corresponds to a further decline of almost 10% compared to 2017. In contrast, the volume of online advertising is developing in exactly the opposite direction: the media experts forecast online advertising sales of CHF 2,272 million for 2019 - the steady increase in the online sector in recent years is thus continuing (2016: CHF 1,983 million; 2017: CHF 2,100 million; figures from the Swiss Advertising Statistics Foundation).
About the study: Under the name DELPHInarium, Publicom, which specializes in media research and consulting, publishes the results of an expert survey twice a year. Over forty experts from leading media companies as well as representatives from advertising, media journalism, communications science and corporate communications take part in the panel.
When asked about the "winners" and "losers" in terms of advertising volume among the various media types, this picture is confirmed: according to the experts surveyed, print, television - and to a lesser extent radio - will have to contend with declining advertising income, while foreign digital offerings (search engines such as Google, social media such as Facebook or Instagram), as well as Swiss information portals on the internet, can expect increasing advertising income in 2019.
The dominance of foreign companies in the online sector is impressive: Google, Facebook, Instagram and co. are grabbing the biggest slice of the Swiss online advertising pie for themselves. The media experts surveyed in the DELPHInarium estimate that foreign companies account for an average of almost 70% of the online advertising volume in Switzerland[4].
50 percent of the media experts surveyed estimate that foreign companies can account for between 50 and 74 percent of the Swiss online advertising volume. A further 42 percent assume that Google and its ilk already account for more than 75 percent. In contrast, only 8 percent believe that foreign companies can siphon off less than 50 percent of the local online advertising volume (figure below).
In Swiss francs, this means that Google, Facebook and co. take in around CHF 1,600 million in advertising revenue in Switzerland. According to the experts surveyed, this means that almost 40 percent of all advertising revenue invested in the media goes to foreign providers. They account for a share that is almost as large as that of the entire press and TV combined.
These developments in the advertising market will also be reflected in the journalistic sector in 2019. When asked about the probability of occurrence of seven scenarios, the DELPHInarium experts rated the following three as the most likely to occur, with shares of a good 90% each for the "certain" or "likely" response categories (figure below):
- The importance of cooperations for the exchange of editorial content (across group boundaries) will increase (92 percent)
- There will be further discontinuation of media products (92 percent)
- There will be further mergers of editorial offices (88 percent)
Increasing efficiency through digitalization will also remain an issue in 2019: the importance of artificial intelligence in journalism - for example, the use of bots for the automated creation of texts, as already tested by Keystone-SDA in the context of referendums - will increase, according to the experts.
According to the experts surveyed, media policy, on the other hand, will not move beyond its shadowy existence this year either: Media policy will not be the focus of attention in the upcoming National Council and Council of States election campaign, nor is significant impetus expected for regulating the market power of Google and Facebook. And a new media law will not be pushed forward decisively in 2019 either.
The Swiss print media can therefore expect little attention from politicians and the public. However, it remains to be seen how the 2019 media year will develop and what surprises and unforeseen events will set the agenda. The future remains uncertain - and therefore exciting.
