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65 years of TV advertising in Germany – is it ready for retirement or fit for the future?

For a long time, TV commercials were the poster child for the advertising industry, but what's the situation these days?
Image: James Steidl / Adobe Stock

TV advertising: The poster child for the advertising industry

Bavarian comedian Beppo Brem is dining in a restaurant when he spills some of his food on the tablecloth. His companion, Liesl Karlstadt, is embarrassed by his faux pas, but the waiter consoles her, saying: “Dafür gibt es doch Gott sei Dank Persil.” (“That’s what Persil is for, thank God.”) Broadcast in black-and-white on Bayerischer Rundfunk, this ad ushered in the era of TV commercials in Germany.

"That's what Persil is for, thank God."

Television became an absolute poster child for advertisers. It was the most dependable way of reaching lots of people at the same time, and also gave rise to universal benchmarks such as production costs and broadcasting and transmission times, which could be applied to various different markets. Television reliably delivered consistently high ROIs and was significantly more effective than other forms of media. The triumph of TV advertising was only brought to a halt by the rise of the Internet. It took until 2018 for spending on Internet advertising to overtake the figure for linear TV.

From linear to personalized TV: What does that mean for TV commercials?

The rise of the Internet triggered a host of new concepts that competed directly with television. As far back as 2006, video platform YouTube demonstrated the potential of offering videos online, so that people could access them on demand whenever they wanted. We have also seen the arrival of new formats offering clear advantages over traditional television: streaming services like Netflix, Disney +, Amazon Fire TV Stick, Apple TV, and Google Chromecast.

Young people in particular are increasingly moving away from traditional television; children are watching less TV and simultaneously accessing content online. In Germany, the viewing time of children (aged between 10 and 13) has fallen significantly in recent years. The same – but less significant – trend can also be seen in people between 14 and 29 years old, and at an even lower level in people aged 30 to 49. The figures only become relatively stable in people over 50. (Long-term study conducted by ARD.)

TV advertising and streaming platforms

Fee-based streaming platforms are financed using a subscription model, but that doesn’t mean that they don’t involve advertising. Although Netflix is still ad-free, numerous series feature product placement. This is far more unwieldy for advertisers in the long term and compared with conventional TV advertising, as they have to invest in a production upfront.

However, we are now seeing the launch of more and more streaming services that use advertising, and some of them are even free of charge. A survey conducted by Criteo also indicates that most Germans would accept this advertising in order to save money. Today, consumers access around five hours of streaming content every week, and that figure is likely to increase. Examples of free streaming platforms include YouTube, Joyn, and Facebook Watch.

TV advertising with connected TV

Connected TV (or CTV) refers to devices that are connected to the Internet and can be used to receive streaming content. From smart TVs and Internet TV devices to game consoles and set-top boxes, they are all capable of sending and receiving data. Consumers can then create their own TV lineup and watch programs at their convenience. This makes CTV extremely attractive to advertisers because it enables them to tailor their ads to the relevant audience. CTV also allows them to reach all age groups, giving them the opportunity to address the full range of demographics and personal preferences.

A recent study conducted by Magnite revealed that CTV users in German-speaking areas are significantly more likely (217%) to purchase a product once they’ve seen it on their CTV device than via other forms of advertising.

At DMEXCO21, Anna Petrushkina from Google Ads and Patrick Kettenbach from DAZN discussed how CTV can benefit advertisers.

TV advertising with social TV

Social TV refers to combining social media and TV content in the form of videos or live events. Facebook is the undisputed market leader in this area. An analysis conducted by Faktenkontor found that as many as 24% of German Internet users have previously purchased a product after seeing it in a Facebook ad. This puts the efficiency of Facebook advertising roughly on a par with radio advertising.

Livestream shopping and advertising using special TV formats

Social media platform Pinterest launched its own TV format in November 2021, aimed primarily at users interested in topics such as food, beauty, home, and DIY.

 

Other providers are now developing advertising formats that are linked to conventional TV formats but are offered online. “Douglas live” and “Tchibo live” are shopping experiences delivered via livestream. Livestream shopping is hugely popular in China and is also reviving the teleshopping format, which is now seen as somewhat outdated.

The bottom line is that TV advertising will remain a significant medium for advertisers for a long time to come. While consumers will continue to take advantage of relevant offers, the transition from linear to personalized TV involves different advertising options that are highly efficient and considerably easier to quantify. Long live TV advertising!

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