Advertising costs will increase more this year than at any time since the late 1980s, with advertisers budgets unable to keep pace. This is one of the key findings in the sixth annual Advertiser Options on Media survey by Media Audits.
The survey’s respondents plan to increase their advertising budgets in 1995 on average by no more than 6%. Advertising agency forecasts predict media cost inflation of 10%. With press advertising rates rising on the back of circulation increases for some, and paper pulp cost rises for all, a clash between advertisers and media owners seems imminent.
Michael Cluff, Media Audits Managing Director, said “There is a clear gap between media cost inflation and advertisers’ inflation objectives. The target for advertisers surveyed, is at the most optimistic, zero inflation, while others link it to Retail Price Index inflation of around 3%. To control their costs some advertisers are considering pulling budgets out of TV, while others are increasingly looking below the line”.
Almost a third (32%) of respondents say they now link agency payment to performance. This is a rising trend. In the 1992 survey 11% of respondents said they use this method of payment, and in 1994 this figure was 27%. 66% believe the best TV deals can only be obtained by using one of the big 10 London media buying points.
Of the 58% of respondents who said they used a media auditor/consultant, 94% believe it has helped them achieve better media value. The Media Audits survey was compiled from 65 responses from a poll of the top 300 advertisers in the UK. The respondents account for £500 million total advertising expenditure.
Media Audits, in their survey of television output quality, found that advertisers were not satisfied with the quality of sport and comedy on ITV. Overall, despite the efforts of ITV in improving the quality of it’s output, the perception of advertisers would still seem to be that it has declined year on year. Only 14% of advertisers thought ITV’s comedy had improved. This view coincided with the ITC view which called it a “problem area”.
The BBC, although producing successful comedy such as Absolutely Fabulous and One Foot in the Grave, is thought to have declined by 21%.
The survey also found that advertisers believe channel 5’s franchise should be issued as soon as possible.
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