While the UK and other EU countries are in the throes of preparing for Brexit, Germany may be benefiting most from changes in the UK’s commercial landscape.
Many of the large financial institutions formerly headquartered in London are transferring staff, operations and other assets to Germany. This increased financial and commercial activity will boost Germany’s GDP and spending of all kinds by relocated and local staff. It also means German firms will have easier access to opportunities and business, likely leading to increased marketing budgets.
Some of these effects were already evident last year. We estimate that the German financial services industry’s digital ad spending will climb by almost €70 million ($83 million) in 2019. Annual growth will remain above 11% this year, before falling to 10.1% in 2020.
The report "Werbemarktanalyse Banken 2019" from German company Research Tools investigated advertising by the banking and financial services sector between March 2018 and February 2019. The report, based on figures from the ad market specialist AdVision digital for the 300 banks and financial services firms with the highest ad outlays, indicated that spending by the sector rose from €706 million ($833 million) to €720 million ($850 million) during that period. Wealth management was the fastest-growing segment; volumes in that area had nearly doubled.
It should be noted that Germany’s financial services industry is among the least-developed sectors with respect to digital ad spending, because heavier regulation in Europe means less access to consumers’ personal data and hence less precise targeting. But that situation also points to rapid growth, as firms figure out how to balance regulatory constraints with online marketing and invest more heavily in digital in the future. For that reason, we expect financial services to outpace average market growth for digital and mobile ad spending during our forecast period.
Regarding mobile, more financial app solutions and mobile services are emerging for consumers, and these are promoted chiefly on digital platforms, rather than on TV as the industry has done in the past. Mobile ad spending by financial firms rose by almost 30% in 2018 and will jump an estimated 17.7% this year, to €453.7 million ($535.4 million)—or 9.9% of all mobile ad spending in Germany. In 2020, the financial services sector is expected to claim 10.0% of mobile ad spending in the country, and 70.4% of all digital ad spending by that industry.
It follows that in 2020, desktop/laptop ads will account for less than 30% of all digital ad outlays by financial services firms—a sharp decline from 36.8% in 2018 and 33.1% in 2019.
For more insights on ad spending trends in Germany, read our latest report.
For coverage on ad spending across the UK and eight US verticals, read our report collection.