Recap Advertising Market Forecast 2023: What happened, what didn’t?

At the beginning of the year, our experts published their usual growth forecast for the German advertising market in 2023. Now the year is drawing to a close. Time to take a look at the market development so far and check whether our statements were correct.

First, a brief review of what we forecast for the advertising market in Germany in 2023:

Forecast general market development 2023:

• We expected the recession to continue to hold back the German advertising market in 2023, resulting in growth of only 0.5 per cent – even weaker growth than in 2022 (+ after all).
• The first tertial in particular should be decisive for 2023, as the inflationary effects of the previous year will only slowly reach consumers and the advertising volume at the beginning of the year should therefore be comparatively high.

Forecast development of individual categories and channels in 2023:

• Performance-oriented online channels and retail media, but also classic media such as radio and outdoor advertising will benefit from the economic weakness and the associated sales orientation.
• The shift in advertising budgets from classic TV to digital moving image channels will continue.
• Spending on traditional handouts will also decline and shift to digital advertising channels.

A preliminary recap of the year so far: How have our forecasts come true?

Looking at the current market figures from Nielsen, the current developments of the advertising market are even slightly worse than we expected: With a minus of 2.9 per cent, the gross advertising market is clearly in decline, even if the net-adjusted balance should still be somewhat lower. The fact that the development is more negative than expected is probably also due to the fact that the “groundbreaking” first tertial we predicted unfortunately failed to materialise, because the first half of the year in particular pushed the market clearly into the red. There is currently still a small glimmer of hope in the last quarter of 2023, as advertising expenditure in the months of June, July and August already showed a slightly positive trend.

Our estimates on the development of the individual channels, on the other hand, have come true so far: With a whopping minus of 8.2 per cent on the gross level, TV budgets are clearly in decline, which also has a significant impact on the overall market.^The ongoing discussion about the classic handouts and the news about the discontinuation of “Einkauf aktuell” in the coming year suggest that budgets will also decline here. With regard to the increasing relevance of retail media and performance-oriented online channels, we see our forecast confirmed. Our statements on the growth of advertising investments in the radio and outdoor advertising channels are also correct: radio is currently up 1.1 per cent, outdoor advertising even + 7.1 per cent.

Conclusion
At present, our fears from the beginning of the year that the advertising market would be slowed down again this year – even more than originally expected – are confirmed. The slightly positive trends of the last few months provide a small glimmer of hope, so it remains to be seen how the last tertiary will develop before we take a look at the advertising market in the coming year as usual in the 2024 forecast.