German online ad market trails UK
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Contrary to popular belief, the UK’s online advertising market is Europe’s largest online advertising market according to Forrester Research, which recently launched its Internet AdWatch local-language online ad monitoring tool in Germany. This finding directly challenges the widely-held belief that Germany has long been Europe’s most lucrative online advertising market.

In June, all online advertising in Germany totalled $7.5 million, and Bertelsmann was far and away the country’s leading advertiser spending $556,861 – eight percent of the total market. The second highest German online advertiser was Primus, spending $219,496. Bertelsmann was also the UK’s biggest online ad spender at $262,189 in June, but its share of the market was far lower at 2.3%.

“The German online ad market is significantly smaller than we thought,” commented William Reeve, group director of European Data Products. “German media companies and advertising agencies have greatly exaggerated the size of the market estimating that firms would spend upwards of $232 million on online advertising this year – but that figure will be much nearer $13.2 million. In the UK, by contrast, Forrester expects online advertising spend to be nearer $185.6 million.”

One reason for an exaggerated sense of the German market’s size lies in the assumptions that companies would launch pan-European online ad campaigns – which have so far not materialised. Also, financial-services advertising in Germany has not been as robust as it has in the UK, where there has been fierce competition between traditional banks and online entrants to the market.

While Germany has some of the same competition, its state-run banks do far less advertising than incumbents in the UK.

“Advertising is still relatively local, even on the Internet,” Reeve adds. The same sort of logistical problems that stymie cross-border offline campaigns also apply to the online world. Also, the media market in Germany is small enough that estimates of the market’s size came from the biggest online publishers getting together and comparing the kind of money they were spending on online ads. Their estimates were more about what everyone wanted the market to be, rather than what it really is.”

Forrester Research analyzes technology change and its impact on business, consumers, and society. Forrester’s “Whole View” of the Internet economy enables clients to weave together Internet commerce initiatives with eBusiness technology to satisfy customers’ changing needs. Clients receive continuous research and analysis through Forrester eResearch Reports, an array of advisory services, bit products, and topical events.



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