The pessimism has evaporated
Advertising expenditure The sputtering advertising engine should finally pick up again this year. However, according to HandelsZeitung's 2004 advertising trends, we will have to wait until the second half of the year.
Advertising expenditure The sputtering advertising engine should finally pick up again this year. However, according to HandelsZeitung's 2004 advertising trends, we will have to wait until the second half of the year. The depressed advertising years of 2001 and 2002, with their dramatically reduced communication budgets, left deep red marks in the media's accounts. And in 2003, against all expectations, the trough had still not been reached. For the current year, however, the "Advertising Trends" study commissioned by HandelsZeitung assesses the climate to be noticeably more relaxed. "Although there is still no sign of marked optimism, the basic pessimistic attitude has largely evaporated," explains Ralph Büchi, CEO of the HandelsZeitung publishing group, although the media are still being asked to be patient, as cautious voices continue to predominate for the first half of the year, with no change in advertising volumes yet to be seen. A clearly positive mood is only emerging for the second half of the year. In the second half of the year, 60 percent of clients and 86 percent of agencies expect a "slight increase" in advertising volumes.
Majority positive or neutral
When asked about the advertising budgets available in 2004, the picture for clients was much brighter. The proportion of clients with increasing budgets has risen to 31% (+2.8%) compared to the previous year, while the proportion with decreasing budgets has fallen to 24% (-8.2%). The proportion of clients who want to continue with an unchanged budget has risen sharply to 45% (+5.4%).
The positive basic trend is mainly driven by five sectors. The retail sector is far and away in the lead, with more than 57% of companies reporting increasing budgets. In 2004, the retail trade was the only sector in which none of the companies surveyed had planned budget cuts. Budget increases are also above average in the food and beverages sector. Here, 37.5 percent expect to increase their advertising investments. The clothing and cosmetics sector is also more advertising-friendly than a year ago. Here, 33.3 percent reported an increase in their budgets. Exactly the same number in the leisure and tourism sector expect advertising spending to increase. And in the IT and telecommunications sector, 28.6% are also more relaxed about their advertising budgets than in the previous year.
The going remains tough for cars and traffic
Unfortunately, however, not all clients will be left with fuller advertising budgets in 2004. Every fourth client is facing further cuts. The automotive and transportation sector is particularly affected, with 46.2 percent of respondents expecting smaller communication budgets. Likewise, 44.4 percent of banks and insurance companies are planning lower advertising expenditure. But 33.3 percent of sellers of household appliances and home furnishings also expect to invest less money in advertising in 2004.
Confident media agencies
If their own sales forecasts are to be believed, agencies are clearly heading for rosier times. Media agencies are even more confident than advertising agencies. Seven out of ten are expecting an increase in turnover. Among advertising agencies, 47.1 percent believe that an upward trend in turnover is likely.
There is general certainty regarding the diminished future role of traditional advertising. Both clients and agencies expect a slight decline. According to the clients and media agencies, the shrinking of traditional advertising will favor direct advertising. Advertising agencies also expect a decline in traditional advertising messages, but assume that sales promotion will benefit from this.
Newspapers are clear losers
Daily newspapers faced a surprisingly clear rebuff in 2004. While they were undisputedly the most important lead medium for clients in previous years, this has changed dramatically in the current survey: Daily newspapers slipped way down to sixth place. The Sunday press has now moved to the top of the list of media most loved by advertisers. Commuter newspapers have moved into second place. And even trade journals, television and outdoor advertising have overtaken the daily newspapers.
This trend to the detriment of the daily press is likely to become more pronounced in the longer term. When asked how the media mix will look in 2008, the daily newspaper was the only media category to score negatively. Its share is expected to decline from today's
40 percent to between 35 and 36 percent. According to the long-term forecast, magazines will remain at around 20%.
Television can continue to look forward to a place on the sunny side. Its share of advertising expenditure is expected to grow from 15 percent today to between 17 and 18 percent. The forecasts are also balm for online media. Their share of the advertising pie is expected to grow from 7.5 percent to 8.5 to 10.5 percent by 2008.
Upswing is a long time coming
Although the economy has now recovered from its low point in spring 2003 and many companies are reporting pleasing results, the eagerly awaited upturn in the advertising market is still a long time coming.
The fact is that advertising pressure on consumers and decision-makers has decreased massively since 2000. "Today, you can get customers' attention with less advertising," says Ralph Büchi, CEO of HandelsZeitung. But this will certainly not remain the case. "In future, the competition will not become milder, but tougher." And advertising is indispensable in this battle. "What is still missing is the initial spark from the key players in the various sectors," says Büchi.
A sharp upturn: 57 percent of retail companies want to spend more money on advertising in 2004 than in the previous year.
Under the magnifying glassFor the annual "Advertising Trends" study, the communications managers of the 500 most advertising-intensive Swiss companies were surveyed. The sample includes all 60 BSW advertising agencies and all 25 media agencies. The survey also included the 40 largest recruitment consultancies and 60 banks and financial service providers.
The survey was conducted by the Media Research Group (Uitikon) on behalf of HandelsZeitung between mid-January and mid-March 2004. The annual advertising market study, which also contains the basic data for determining "advertising trends", is available at www.mediaresearchgroup.ch. To
special evaluations for media providers, agencies and advertising clients can also be found there. (dse)
Daniel Schifferle
Majority positive or neutral
When asked about the advertising budgets available in 2004, the picture for clients was much brighter. The proportion of clients with increasing budgets has risen to 31% (+2.8%) compared to the previous year, while the proportion with decreasing budgets has fallen to 24% (-8.2%). The proportion of clients who want to continue with an unchanged budget has risen sharply to 45% (+5.4%).
The positive basic trend is mainly driven by five sectors. The retail sector is far and away in the lead, with more than 57% of companies reporting increasing budgets. In 2004, the retail trade was the only sector in which none of the companies surveyed had planned budget cuts. Budget increases are also above average in the food and beverages sector. Here, 37.5 percent expect to increase their advertising investments. The clothing and cosmetics sector is also more advertising-friendly than a year ago. Here, 33.3 percent reported an increase in their budgets. Exactly the same number in the leisure and tourism sector expect advertising spending to increase. And in the IT and telecommunications sector, 28.6% are also more relaxed about their advertising budgets than in the previous year.
The going remains tough for cars and traffic
Unfortunately, however, not all clients will be left with fuller advertising budgets in 2004. Every fourth client is facing further cuts. The automotive and transportation sector is particularly affected, with 46.2 percent of respondents expecting smaller communication budgets. Likewise, 44.4 percent of banks and insurance companies are planning lower advertising expenditure. But 33.3 percent of sellers of household appliances and home furnishings also expect to invest less money in advertising in 2004.
Confident media agencies
If their own sales forecasts are to be believed, agencies are clearly heading for rosier times. Media agencies are even more confident than advertising agencies. Seven out of ten are expecting an increase in turnover. Among advertising agencies, 47.1 percent believe that an upward trend in turnover is likely.
There is general certainty regarding the diminished future role of traditional advertising. Both clients and agencies expect a slight decline. According to the clients and media agencies, the shrinking of traditional advertising will favor direct advertising. Advertising agencies also expect a decline in traditional advertising messages, but assume that sales promotion will benefit from this.
Newspapers are clear losers
Daily newspapers faced a surprisingly clear rebuff in 2004. While they were undisputedly the most important lead medium for clients in previous years, this has changed dramatically in the current survey: Daily newspapers slipped way down to sixth place. The Sunday press has now moved to the top of the list of media most loved by advertisers. Commuter newspapers have moved into second place. And even trade journals, television and outdoor advertising have overtaken the daily newspapers.
This trend to the detriment of the daily press is likely to become more pronounced in the longer term. When asked how the media mix will look in 2008, the daily newspaper was the only media category to score negatively. Its share is expected to decline from today's
40 percent to between 35 and 36 percent. According to the long-term forecast, magazines will remain at around 20%.
Television can continue to look forward to a place on the sunny side. Its share of advertising expenditure is expected to grow from 15 percent today to between 17 and 18 percent. The forecasts are also balm for online media. Their share of the advertising pie is expected to grow from 7.5 percent to 8.5 to 10.5 percent by 2008.
Upswing is a long time coming
Although the economy has now recovered from its low point in spring 2003 and many companies are reporting pleasing results, the eagerly awaited upturn in the advertising market is still a long time coming.
The fact is that advertising pressure on consumers and decision-makers has decreased massively since 2000. "Today, you can get customers' attention with less advertising," says Ralph Büchi, CEO of HandelsZeitung. But this will certainly not remain the case. "In future, the competition will not become milder, but tougher." And advertising is indispensable in this battle. "What is still missing is the initial spark from the key players in the various sectors," says Büchi.
A sharp upturn: 57 percent of retail companies want to spend more money on advertising in 2004 than in the previous year.
Under the magnifying glassFor the annual "Advertising Trends" study, the communications managers of the 500 most advertising-intensive Swiss companies were surveyed. The sample includes all 60 BSW advertising agencies and all 25 media agencies. The survey also included the 40 largest recruitment consultancies and 60 banks and financial service providers.
The survey was conducted by the Media Research Group (Uitikon) on behalf of HandelsZeitung between mid-January and mid-March 2004. The annual advertising market study, which also contains the basic data for determining "advertising trends", is available at www.mediaresearchgroup.ch. To
special evaluations for media providers, agencies and advertising clients can also be found there. (dse)
Daniel Schifferle
