Things are looking up again in 2003
Switzerland now also has an advertising market study
In their forecasts, the renowned Basel-based futurologists assume that the war in Afghanistan will not develop into a conflagration and that everything will return to "normality" after the terrorist attacks on the World Trade Center in New York and the Pentagon in Washington DC on September 11. "Although the world has been upside down for some time now, we believe that the economy is much more stable than the public seems to think," said Josef Trappel at the presentation of the first long-term advertising market study for Switzerland. Trappel is project manager of the study at Prognos.
Despite his calmness, Trappel assumes that a kind of year of mourning will now follow. The gross domestic product (GDP) continues to fall and will only increase again in the second half of 2002. "From 2003 onwards, people will make up for their postponed consumption," says Trappel. Over the whole of next year, however, GDP growth will only amount to one percent in real terms. The Swiss advertising market is behaving similarly, not picking up again until 2003, but then by an impressive 7 percent. And subsequently it will (again) grow faster than GDP.
Two traditional advertising media, TV and posters, are not taking this dive: Their annual growth rates remain positive. According to Prognos, net TV advertising sales will grow from CHF 536 million (2001) to CHF 692 million (2005), finally reaching CHF 881 million in 2011. Poster advertising increased from CHF 610 million (2001) to CHF 723 million (2005). All other advertising media, including the Internet, did not recover until 2003, but then even exceeded their figures from the super advertising year 2000.
Prognos maintains its predictions for Internet advertising
Although newspapers will remain the largest advertising medium, their market share will fall from 46.3 percent (2001) to 44.1 percent (2002). Print as a whole will grow less strongly than the overall advertising market until 2005; the same applies to radio, which is expected to increase from 135 to 153 million francs in the same period.
As far as online advertising is concerned, the forecasters are surprisingly sticking to earlier predictions. The only difference is that they postpone the start of growth by two years to 2003, but then the curve rises rapidly in line with earlier forecasts. Accordingly, online advertising suddenly more than doubles in 2003, reaches CHF 90 million in 2005 and doubles again by 2011. This optimism is primarily based on new online advertising forms and techniques that allow cheaper and more creative production. One example mentioned was Flash technology, which makes it possible to produce a campaign for electronic image media in a media-neutral way (see also p. 18).
New services create new advertising pressure
Otherwise, however, the merging of different media - known as convergence - is still a long way off, partly because the necessary broadband access is lacking. According to Prognos, around half of all households will have such access by 2011. But even if new, interactive TV formats are created as a result, Trappel doubts whether viewers will keep pace with the technology. "We are rather cautious about this," he said.
However, new companies and services will undoubtedly emerge, which will increase advertising pressure. And Trappel sees this as an opportunity for the advertising market. However, with one caveat: "Advertising marketing must acquire the necessary expertise in good time," he says, pointing out deficits that already exist today.
Clients and sponsors
The 2011 advertising market study was conducted by Prognos AG on behalf of Sevenone Media Switzerland. Its TV marketing partners RMB Switzerland and IP Multimedia contributed to the costs as sponsors. The study is to be updated annually. Prognos has already been preparing a similar study for Germany for three years and one for Austria for the past year.
Forecast net advertising revenues by media type
in CHF million 2000 2001 2002 2003 2004 2005
Newspapers 2 250 2 179 2 132 2 261 2 332 2 394
Consumer magazines 379 387 377 398 410 420
Trade press 404 403 397 422 436 449
Television (incl. sponsorship) 520 536 544 599 640 692
Radio (incl. sponsorship) 139 135 133 143 149 153
Outdoor advertising 592 610 627 687 725 763
Other advertising media 436 438 428 449 460 470
Online advertising 25 21 21 44 67 90
Total 4,745 4,708 4,661 5,003 5,220 5,430
Inflation rate in % 1.1 1.0 1.6 1.7 1.7GDP nominal growth in % 2.7 2.0 3.4 3.5 3.5
GDP nominal in CHF bn 404 415 424 438 454 470
Source: 2000 Wemf, Prognos AG
Forecast until 2011
2005 2011 Change 2005/2011
GDP nominal in CHF bn 470 572 Ø growth 3.3% p. a.
Inflation rate Ø 1.7% p.a.
Net advertising sales in CHF billion 5.4 6.8 Ø growth 3.9% p. a.
Television advertising in million CHF 692 881 Ø growth 4.1% p. a.
Market share in % 12.7 12.9
Online advertising in CHF million 90 198 Ø growth 14.0% p. a.
Market share in % 1.6 2.9
Source: Prognos AG
