German Digital Ad Growth Will Stagnate amid Economic Turndown
October 14, 2020
No country will escape the coronavirus pandemic unscathed, and all around the world, local public health crises have led to substantial economic downturns. Germany has handled the unprecedented challenge better than most, and its industrial base has proven to be more resilient than many of its counterparts across the globe. But the country has not avoided substantial economic disruption, despite the competence of its public health governance.
The dominant vertical for digital ad spending in Germany has always been the retail industry, but auto has traditionally been the other big digital ad buyer. This makes sense given the auto-centric makeup of Germany’s industrial manufacturing economy. Beyond auto, the travel industry too has been a substantial digital advertiser in years past. Thus, auto’s dramatic 25.7% decline in digital ad spending, coupled with the unprecedented 38.7% drop in travel digital ad spend, explains the general stagnancy that Germany’s digital ad market will see this year. Several other verticals will chug along relatively unscathed, but overall digital ad spending will barely grow this year.
Retail will once again lead the verticals in digital ad spending this year, at €1.77 billion ($1.98 billion). Thanks to auto’s decline, retail will be the only individual industry to spend more than €1 billion ($1.12 million) on digital ads in 2020. In fact, retail will outspend by more than double the second-highest digital ad spender, which for the first time will be financial services, at €0.81 billion ($0.91 billion). Travel’s digital ad outlays will fall to just €0.46 billion ($0.51 billion) in 2020, after reaching €0.75 billion ($0.84 billion) last year.
Meanwhile, the healthcare and pharma and financial services verticals will mirror industry trends around the world and maintain strong digital ad spending growth. The companies in these categories, along with their peers in the technology sphere, have found their goods and services more in demand than ever, despite—or because of—the pandemic. Digital ad spending has naturally followed this uptick in demand.