Dusseldorf Wiring harnesses are missing, energy costs are rising: the Russian war of aggression in Ukraine is affecting production in the local car industry. And that also has a negative effect on their marketing activities, as shown by figures from market researcher Nielsen, which are available exclusively to Handelsblatt.
Compared to the same month last year, advertising expenditure by companies in the automotive sector fell by almost 40 percent in March. A year-on-year comparison makes sense because companies usually place more advertising in the spring than in the winter months, which are characterized by exhausted annual budgets and post-Christmas consumer fatigue.
But even compared to February 2022, the advertising budget in the automotive sector has fallen by a tenth. For classification: In the pre-Corona year 2019, this number rose by 66 percent between February and March.
Dirk Reinbothe, Germany Managing Director of Nielsen, says: “Many car manufacturers are currently unable to deliver their cars on time due to disrupted supply chains.”
Therefore, they would refrain from advertising cars in the short term, after all, that could result in disappointed customers.
The war affects the advertising industry. If the industry recovered after the pandemic at the beginning of the year, the next dip is now imminent. Because the economic situation is clouding over and companies are struggling with rising prices for energy and raw materials, companies are often the first to save on their advertising budgets. The advertising expenditures of the individual sectors are affected differently, as Nielsen shows for the first time with representative figures.
Accordingly, trading companies are also currently placing significantly fewer advertisements – a drop of more than 40 percent. One reason for this is that retailers don’t have to advertise as heavily because customers come of their own accord to buy flour or oil, for example. This hamster buying effect could already be observed during the corona lockdowns.
In sectors such as transport, tourism or art and culture, advertising spending has increased compared to the previous year. This can be explained above all by the relaxation of the corona virus, in the previous year there was no service to apply for. But in these sectors, advertising budgets have grown faster than before the pandemic, even compared to this February. Apparently, the war hardly seems to have had any effect on the advertising activities of industries that live primarily from pastime and distraction.
TV news benefits from more viewers
“Today” benefited from the war. The main news program on ZDF achieved a rating of a good 18 percent with an average of almost 4.3 million viewers. “The market shares are above the level of the previous year,” says Mainz. In the ZDF media library, the “Heute” news reached a new high in March with 500,000 hits per day.
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The first also reports “increased use” of the information broadcasts. The special programs such as “Brennpunkt” with almost six million viewers and a 19 percent market share are in greater demand. Private television is also reporting more viewers: In March, the news channel N-TV, which belongs to the Cologne TV group RTL, achieved the highest ratings since the station was founded in 1992. The N-TV homepage also had more visitors than ever before.
The Nielsen data also confirms that as a result of the war, Germans are consuming more news, especially on television: 47 percent of those surveyed watched more TV news than before to find out about the conflict and its consequences. Interest in online media increased by 38 percent. For radio and newspapers, the plus was around 30 percent.
ZDF and RTL report that the ratings and views are still at a high level in April, but lower than at the beginning of the war. Such developments are typical: after a while, viewers get used to the situations and are less interested in them.
People rely on traditional media
In times of crisis, people mostly trust traditional media. Most respondents, 63 percent, rate the quality of information on public television as very good or good. This is followed by radio and printed newspapers. Interesting: Their online editions are considered less serious. And in the case of purely online media, only 22 percent of those surveyed saw the information quality as good or very good. Even social media platforms are believed to be more serious.
Nielsen Managing Director Reinbothe says: “Users trust classic media offerings because they assume that there is less fake news there and that the news is better researched.” From the point of view of users on private television, this is less the case. Only half trust the information programs on private TV. RTL will be reluctant to hear that. The Cologne TV group has expanded its range of news and is trying to get away from the former trash image.
Companies prefer to broadcast on public TV
The perception of journalistic content also affects how users rate the advertising, Reinbothe explains. That’s why many companies, especially in times when advertising budgets are tight, prefer to place their ads in a more serious environment.
According to Nielsen, companies invested a total of 1.3 billion euros in TV advertising in March, almost four percent less than in the previous year. The TV advertising market had a strong start to the year due to the relaxation of the corona virus. Private television in particular is suffering from the recent slump. Revenue from advertising fell by four percent compared to the same month last year. On public television, on the other hand, this number was almost nine percent higher – despite the war. There, however, the share of advertising financing is significantly lower, the business is generally fee-financed by the broadcasting fee.
ARD Media, ARD’s advertising marketer, reports that in the first quarter of the year it was well above the industry average. “In times of crisis, the advertising market usually relies particularly on reliability, quality environments and reach,” says Uwe Esser, Managing Director TV at ARD Media. Esser has observed greater demand, for example, from customers in the financial market, service, health and consumer electronics sectors.
ZDF advertising television reports that companies booked 96 percent of the advertising space in March – 13 percentage points more than in the previous year. Compared to this February, however, bookings fell by eleven percent, which ZDF attributes to the Olympic Games and the well-booked advertising environment. It is said that the effects of the Ukraine war are currently difficult to determine.
On the other hand, muted tones can be heard from the Ad Alliance, which markets advertising for RTL, Gruner + Jahr and Der Spiegel, for example. “The war has led to uncertainty in the advertising market,” says Frank Vogel, Managing Director of the Ad Alliance. There are no major campaign stops, but many advertisers are currently planning for even shorter periods.
More: Advertising agencies fear sales losses due to the Ukraine war