German TV ad market continues to boom

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BERLIN -- Germany's TV market, the largest in Europe, continues to surge, growing 9.6% to €832 million ($1.1 billion) in the first quarter of 2007, according to figures released Friday by Nielsen Media Research.

Germany's growing economy and falling unemployment more than compensated for a tax hike that saw the value-added-tax jump 2% at the beginning of the year.

"The V.A.T. increase had a much smaller effect on the economy than had been widely expected," said Ludger Wibbelt, managing director of Nielsen Media Research in Germany. "The boom mentality in the advertising market that we saw last year is continuing into 2007, even though growth will be somewhat below last year's, which was driven by the soccer World Cup."

Internet advertising soared in the first quarter, jumping 45.1% to €54.3 million ($74 million) in Germany, a sign that greater broadband penetration is beginning to pay off for Internet sites in the form of increased traffic.

The only black spot on the Nielsen report was in-theater advertising. Revenue from commercials screened prior to movie showings dropped 20% to €3.9 million ($5.3 million) in the first quarter.

This is perhaps a reflection of the overall downward boxoffice trend in Germany. In the first three months of 2007, ticket sales fell 10.1% and boxoffice slumped 8.4% to €177 million ($240 million).

It's hoped the strong performances of Warner Bros.' Spartan epic "300" and Universal's comedy "Mr. Bean's Holiday" will help reverse the downward trend.
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