What’s new on the German digital market, how have Germany’s digital companies fared compared with the big boys from the States and China and what chances and opportunities are there to be taken advantage of? In OMR’s newest annual State of the German Internet keynote, founder and CEO Philipp Westermeyer addresses these questions and more as he shares his view of the current digital landscape seen through the lens of a marketer.

1. STATE OF
THE GERMAN
INTERNET
2020

2. Welcome
to State of the German Internet! Although the
slide suggests otherwise, this will not be a
“corona presentation.” Now, we won’t be
ignoring it altogether either.
Life has changed quite dramatically of late.
Significant parts of the global economy are
struggling mightily. So our question in the
context of this presentation is: How is the
digital economy doing? Let’s start by
looking at the biggest platforms.

3. Source:Yahoo!Finance
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
€1.118 BIL
Market Cap
May 20, 2020
SharePrice
They’re doing just fine. Amazon is
trading at an all-time high.
To underscore the ubiquity of the
platform…
Amazon
🚀

4. 2014 2015 2016 2017 2018 2019 2020 2021
20.34 MIL
MEMBERS
9.06 MIL
MEMBERS
22.3 MIL
MEMBERS
Source:EstimatedbyEtribes
25.2 MIL
MEMBERS
… we were astonished to see Amazon prime
members surpassed members of the Protestant
church in Germany early this year.
👑

5. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
€1.267 BIL
Market Cap
May 20, 2020
Apple’s current valuation is higher
than ever, too. To illustrate their
clout, let’s take a look at…
Apple
🚀
SharePriceSource:Yahoo!Finance

6. … Airpods. If these tiny devices
were a stand-alone company,
their estimated revenue would
equal the total worth of
several brands combined. €5.6 BIL
€4.6 BIL
€4 BIL
€14 BIL
EstimatedRevenuein2019

7. The revenue generated by
re-purchases of lost
Airpods alone puts the
business on a Champions
League level.
€644 BIL
EstimatedRevenuein2019
Bayern
Munich
€716 MIL

8. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
€859 BIL
Market Cap
May 20, 2020
Google might at least to some
degree feel the stress of a
reduced marketing budget. Still, their
path is from the lower left to the
upper right.
Google
🚀
SharePriceSource:Yahoo!Finance

9. May 21,
2019
If you happened to be
seeking a job early last
year, this would have been
Google’s answer.
Office Assistant Hamburg

10. Office Assistant HamburgOffice Assistant Hamburg
Since
May 22,
2019
Then Google introduced the
job search box. What is
seemingly not very spectacular
on the surface has a huge impact
in reality if you are part of this
industry.

11. April 19 May 19 June 19
Dominant
within
24 hours
Sistrix Toolbox
🚀
Source:Sistrix
Google
stepstone
indeed
Arbeitsagentur
Visibility
Index

12. 2012 2013 2014 2015 2016 2017 2018 2019 2020
€566 BIL
Market Cap
May 20, 2020
Facebook is trading at a record
level as well with Instagram
becoming the main value driver.
Facebook
🚀
SharePriceSource:Yahoo!Finance

13. To illustrate the dynamic, we took a
look at the ad revenue of these
platforms in year 2 after the first ad
was sold…
$0.32BIL
$0.32BIL
$0.4BIL
$0.41BIL
$0.6BIL

14. … and we found that ads on Insta
stories alone – introduced in 2017
and, yes, standing on the shoulders
of giants – created revenue in
another sphere.
$0.32BIL
$0.32BIL
$0.4BIL
$0.41BIL
$0.6BIL
$7BIL
INSTAGRAM
STORIES

15. In total, Google, Amazon, Facebook
and Apple are essentially more
valuable than ever. The same
holds for Chinese platforms.
€3871 BIL
€1033 BIL
€3810 BIL
€1052 BIL
May 20, 2020 All Time High
Feb 19, 2020
Jan 13, 2020
New
All Time High
May 20,
2020
Source:Yahoo!Finance

16. “Our” GIX is in good shape as
well. Please note that for the sake of
the comparison Axel Springer (delisted
on April 6) and trivago (now valued
below the € 1 BIL threshold) are still
counted here.
Eventually, it dawned on us that
comparing German internet companies
with China or the US is kind of
ridiculous. To correct for this, we
decided this year to introduce …
May 20, 2020 All Time High
May 11, 2020
€72 BIL€72 BIL
XIG
Source:GoogleFinance
GIX

17. … the European Internet Index.
Here, the same criteria apply as
with the GIX and a broad
understanding of Europe based
on geography.
PS: We are happy for feedback if
we have overlooked candidates.
Source:GoogleFinance
EIX
• Digital Core Business
• valued > €1B
• B2C
Spotify
Paradox Interactive
Yandex
Mail.ru
Kindred Group
CD Projekt
Adevinta
avast
Zur Rose Group AG
takeaway.com
Booking.com
New Work
Ströer Media
Scout24
Zalando
HelloFresh
Delivery Hero
CTS Eventim
Rocket Internet
Pro Sieben Sat 1
United Internet
Farfetch
Just-Eat
Rightmove
MoneySupermarket
ASOS
Boohoo
ocado
May 20, 2020
€279 BIL
€72 BIL
€2 BIL (CH)
€5 BIL (CZE)
€5 BIL (NOR)
€8 BIL (PL)
€11 BIL (MLT)
€14 BIL (RUS)
€33 BIL (UK)
€56 BIL (SWE)
€80 BIL (NL)
€66 BIL (GER)
XIGE
Supported by

18. We have seen that the listed digital
world is doing excellent. Still, the
global comparison shows
some room for improvement for
the European Internet!
€3810 BIL
€1052 BIL
€279 BIL
May 20, 2020
XIE
Source:Yahoo!FinanceandGoogleFinance

19. As stated in our first “State of… 2017” the
core value driver of these platforms is
digital marketing. Being OMR we cannot
help but looking at the world through a
marketing lens and decode the
phenomena we perceive like the marketing
nerds we are. This year we hope to
provide insights, inspiration, best practices,
in short: value by sharing this view
in a straight-forward manner…
🧠

20. LIFE
THROUGH A
MARKETING
LENS

21. Mass Shootings
El Paso – Sep 2019
Climate Change
Sydney – Mar 2019
Fast Fashion
Kiel – Nov 2019
In the last months, we’ve seen the phenomenon of people
gathering behind ideas to protest gun violence, climate
change and fast fashion to mention just a few causes.
Through our marketing lens, this trend is summed up as the…

22. Consumer Led Revolution

23. On August 3 2019, 23 people
were killed in a mass shooting
in a Walmart in El Paso.
What’s weird for Europeans —
while you’re shopping for
detergent and candy bars,
you can also pick up guns and
ammo.

24. As a reaction to the shooting
and the public mourning,
Walmart ceased gun sales at
the cost of considerable
revenue and to the chagrin
of NRA supporters.

25. Sept 04,
2019
Oct 01, 2019 Nov 01, 2019 Dec 01, 2019Sept 01, 2019
Share value Walmart
Source:Yahoo!Finance
Listening to the call of the people was
not a net negative from a business
perspective — the stock market
was fine with this move.
👍

26. Oatly – oat milk from Sweden -
has built marketing piggybacking
on the Fridays for Future
movement.
They launched a campaign
to make it mandatory to
list food’s CO2 footprint on
the packaging.
Unsurprisingly, oat milk has a big
advantage there compared to
regular milk.

27. Core to the campaign is a
petition to the German
parliament. Collecting 50K
signatures within a month
opens the door to present the
cause publicly in a dedicated
commission at the Bundestag.

28. Google Search Trend: oatly
Sept 17, 2019
Oct 13, 2019
Final day to
sign up
Nov 30, 2019
Oatly succeeded, created massive
PR value and peaked in Google
trends and actually propelled them
to a higher long-term level.
Launch of
Campaign
Nov 12, 2019

29. An even more straight-forward
example is creating your
business model based on the
Consumer Led Revolution. People
protest the throw-away
society in general and fast
fashion specifically. Digitizing
second-hand flea markets for re-
used fashion spawned a
European champion…

30. ”A Used-Clothing Marketplace Is
Europe’s Newest And Trendiest Tech Unicorn“
Nov 28, 2019

31. €600
MIL
€310
MIL
€666
MIL
Source:OMRResearch
CompanyValuation,Fall2019
…and considerable number of runners-up.

32. Even if you happen to be a
traditional SME, you can base
your marketing tactics on this
trend: This grocery store in the
countryside town of
Neumünster decided to stop
selling fireworks and
created a tidal wave of
positive feedback.
🚫🧨❌

33. So, keep an eye on trends in society.
They translate to single marketing
measures as well as entire business
models — provided you remain true
and authentic.

34. The fact that we cannot help but
view everything through a
marketing lens is sometimes
quite the handicap…
When we see this famous scene
from Old School with Will
Ferell, we do not see a drinking
game. Our minds immediately
shift to thinking about
marketing funnels. Really!
Gather tons of leads and
convert as many of them into
customers — this is what we see.

35. However, as the bargaining
power of platforms caused leads
to become quite expensive there
has been a new buzzword in
town: The Flywheel! Instead of
continuously buying leads, it’s
better to focus on getting
your customers to stay
within your company’s
ecosystem and monetize
on a habitual basis.
Flywheel
FLYWHEEL
FLYWHEEL
Flywheel
Flywheel

36. Flywheel
FLYWHEEL
FLYWHEEL
Flywheel
Flywheel
Arrival of the Flywheel

37. The rental car business is a
constant fight between
companies whose fundamental
difference is the color of their
logo. Almost every car rental
customer needs to be re-
purchased each time they would
like to rent a car.

38. Sixt has created an app as the
default destination for all urban
mobility needs— from car sharing, taxi
hailing, scooter renting or the classical
car rental business. It combines own
and third-party offerings.

40. Recently Sixt CEO
Alexander Sixt told us that
the creation of a flywheel
was intentional and – even
though some elements are
not making money – €1.7
MIL revenue is generated
daily through the app.
Revenue per day
€1.7 MIL

41. When we take a look around in
our children’s room, we find
comfort in the fact that some
things have not changed
drastically since we were young.
That’s how Lego used to look by
the way.

42. Lego struggled in the early
2000s and decided to
innovate. The company
invented the Ninjago brand,
not only selling blocks, but a
lot of content and products
around the brand. Lego
created a flywheel.

43. Source:StatistaRevenuein€
2019
€5.2 BIL
2011
€2.5 BIL
You might be right if you said that this is no
news for marketing pros. Still, we believe it
is worthwhile noting that Lego has seen its
revenue increase drastically since the
launch of Ninjago in 2011.

44. We would have loved to present more
flywheels but — full disclosure — we haven’t
found many of them. This may be on us
but it also shows an opportunity to go
and create convincing flywheels. If
you manage to put one together, we’d be
happy to cover your flywheel next year!
🙌

45. The next trend we believe is
worth taking notice of is not
actually recent — but now plays
an important role in marketing.
A few years back experiences,
like watching the NBA playoffs
in person, were shared,
discussed and liked publicly
on Facebook (with a good
deal of data tracking thrown in
there). Nowadays similar events
are primarily posted in private
messenger groups.

46. Case in point: When CEO Philipp
met up with German actor, Til
Schweiger, to record a podcast, he
shared the unique moment across
mul$ple WhatsApp groups.
Basically, Philipp’s digital activity
takes place on WhatsApp — as
is the case for many people out
there.
Unfortunately for marketers, this
acitivity is invisible and beyond the
scope of data tracking capabilities.
We coined the trend...

47. 💬
The Rise of Dark Social

48. We were happy to see quite a few
SMEs who have successfully
adapted to people’s messaging
habits for one-to-one communication.
Rolf, our Chief Report Editor, found
the help he needed on a motor for a
set of blinds in a one-to-one chat.

49. When our Editor-in-Chief, Roland,
was on the market for legal
insurance (for undisclosed reasons),
he found the consulting and
sales processes took place in a
personal chat as well.

50. 15h 50min
This is Hannah, she is part of our
sales team and half the age of Rolf
and Roland. Her digital habits are
quite different. She basically
lives on Instagram.

51. Actually she uses Instagram as a
messenger tool and digital stand-
in for store fronts. So when she’s
looking to get her nails did, she finds
the nail salon Isla Berlin on Insta and
is able to instantly make an
appointment there.
Facebook Shops was launched in
May so this development will only
amplify further. You need to ask
yourself if and how well your business
is adapted to the communication
habits of your target group.

52. A shared experience
(which escalated in the
age of corona) we’ve
been keeping an
eye on is scrolling
through Netflix.

53. 54321
The challenge of picking out the right movie or series on Netflix is
so universal that the top-5 choices by minutes watched in 2018 are
old syndicated series with household names. When in doubt you
choose what you are familiar with.
Source:Nielsen/AdweekMay2019

54. 54321
This explains the premium paid, e.g. for Friends, in the streaming
wars. Through our marketing lens, this trend is summed up as…
Source:Nielsen/AdweekMay2019
WarnerMedia paid $85 million per year
for five years ($425 million total)
2019

55. Too much Choice

56. We’ve been dreaming more than ever of
going on vacation. Most of us probably
do not dream of zillions of
choices that need to be made to get to
our dream destination: flight, rental car,
accommodation, attractions, etc.

57. Some digital agencies, like
Tourlane, have found a way of
addressing this struggle.
Basically, you tell them where
you want to go and what kind
of holiday you want and they
are taking care of the details to
save customers time and
nerves. Even though the travel
market is under pressure, these
kinds of digital asset light
models will prevail and flourish.

58. Another example is found on the
mattress market. We talked
about Casper in our "State of …
2017" presentation. But the
company that is, at least for now,
the winner of the mattress war (in
Germany) is the one company
which is…

59. 2016
€43.7 MIL
2017
€126.7 MIL
Revenuein€
… basically offering
customers no choice:
Bett1, which translates to
Bed1, making it one of the
weirdest, yet still perfect
company names we've
come across. Published
revenues are slightly
outdated but what we
hear is that is that they
kept on improving.

60. Being invited to a diner party
might put the pressure on to
bring the right wine out of
seemingly endless options. If you
happen to be like Philipp (i.e.
you have no clue at all about
wine) you might fancy the
solution of Kiel-based wine
merchant Schneekloth.

61. Naming the wine by the food to
pair it with empowers Philipp to
make a solid choice and be a
confident guest at the diner
party. One purpose of
marketplaces is offering choice.
Offering less and more-
convenient choice can be
your competitive edge.

62. We have one trend left.
We are asked to rate
everything on and offline.
Through our marketing
lens, we call this…

63. The Trust Struggle

64. Let’s take a look at this
query for a keyboard:
YAMAHA PSR-S670

65. You can find it for more or less the same price on Amazon,
MediaMarkt (the legacy retailer in Germany) and Thomann, a
niche player. The question is: Why does Thomann still exist?

66. Actually Thomann is the global
market leader for music supplies.
€850 MIL
2019:
Revenue

67. We believe that a reason for this is trust through
content. A big part of the relevant content are peer
reviews. Thomann generates a larger number of reviews…

68. … with considerable more detail and
depth. They are a centerpiece for an
enthusiastic and loyal community around
the brand.

69. By real
customers 🚫 🚫
Verified
😐😐
Verification
method disclosed 🚫 🚫
Text mandatory
🚫
Transparency regarding the requirements of the reviews and the method
of verification are keystones ensuring the quality of the reviews.

70. Direct banks are doing better
in this comparison…
Banks are basically getting beaten up on
review platforms. The reason: People expect a
bank to perform flawlessly. The only
reason to voluntarily write a review is
a bad experience.
Direct BanksTraditional Banks

71. … but the market is outperformed
by N26 — a German challenger
bank — in terms of the number of
reviews and results. Given that they
have the same problem as
anybody else — how do they do it?
🏆

72. One important marketing hack
was to simply ask all customers
via e-mail. In doing so, they
activated the silent
majority of satisfied
customers…

73. … and gained a significant
number of positive reviews while
their campaign was running.
Between Jul 17 – Feb 18
90%

74. Our last case is a real
basic hack based on
the Trust Struggle. This
necklace was advertised
on Facebook with two
creatives only differing in
the text. The second one
is a quote from an
Amazon review.
Sponsored
We dream in
jewellery ✨
Sponsored
"I’m a big NEW ONE
Fan and will always be!
Super fast delivery and
very pretty jewellery
🌟🌟🌟🌟🌟"

75. The “five stars” are so
embedded in our
perception that just seeing
them in the free text
segment led to a
considerable uplift in sales.
If there is just one take-away
from this presentation:
Please think about
your review strategy!
Sponsored
We dream in
jewellery ✨
Sponsored
"I’m a big NEW ONE
Fan and will always be!
Super fast delivery and
very pretty jewellery
🌟🌟🌟🌟🌟"
+20%
Revenue

76. The
Trust
Struggle
The
Consumer Led
Revolution
Arrival
of the
Flywheel
Too
much
Choice
The Rise
of Dark
Social
These trends might provide an anchor and
inspiration for your marketing:
LIFE THROUGH A
MARKETING LENS

77. BIG THANKS TO
OUR PARTNERS
KLAR
AUGENOPTIK

78. Fleming Peter Francesca Veit
No agency - Kreativagentur
Scott Peterson
Martin Gardt
Philipp Westermeyer
Rolf Hermann
Michael Wanker
Nina Schliefer
No agency - Kreativagentur
Christian CohrsRoland Eisenbrand
Torben Lux
TEAM 2020
👑Eike Dehning
dhng Consulting
THE OMR