Cost of Advertising To Rise Ahead Of Inflation

Globally, the cost of above-the-line advertising is on the rise ahead of economic inflation, signifying a media market that is well and truly on the move, says Initiative Future’s latest Global Intelligence report.

While confirming last year’s signs however, the media agency’s report also indicates that advertisers are netting less audience for their media dollar year-on-year, emphasising the need for marketers to achieve the best value possible from their media investment by using non-traditional channels, as well as the more traditional, in the media mix.

Perhaps surprisingly, Initiative Futures claims that the use of ‘new’ communication channels is having an additive effect on traditional media. Despite becoming increasingly expensive, above-the-line advertising investment is continuing to grow.

Cost trends vary by medium, with TV costs accelerating less quickly than most other media – compound inflation is forecast to increase to 14% from 2000 to 2005.

However, magazines and newspapers are predicted to increase by a huge 40% in 2005 (from 2000). There has been a sharp increase in print, with both formats recording the highest annual rises in Cost Per Thousand (CPT), fuelled by falling circulations and rising costs per insertion.

As the cost of entry reduces, the internet is the only medium predicted to experience a declining CPT in 2005, proving to be a medium of increasing value for money.

Initiative Media: 0207 663 7000 www.initiativemedia.com

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