Network Inflation Drives Advertisers Away From TV, Says WPP

Global advertising and PR group, WPP, says that the real cost of advertising on network television, the primary media medium, is continuing to rise by as much as 5-10% a year on both sides of the Atlantic. WPP says that this is caused partly by increased pricing by an oligopoly of media owners and partly by a decline in network audiences. As a result of these rising costs, WPP’s clients are increasingly turning to alternatives to television advertising.

“As long as network price inflation continues, clients will increasingly experiment with alternative media and non-traditional alternatives will continue to grow faster,” the group said.

The company this morning reported rising profits thanks in part to £312 million of internet-related revenues. Pre-tax profits for the year to 31 December 1999 jumped 20% to £255.4 million and revenues were up 13% to £2.2 billion.

Combined advertising and media investment management revenues at WPP’s Ogilvy & Mather Worldwide, J. Walter Thompson and MindShare divisions rose by 5.3% year on year. O&M generated net new billings of £545 million, JWT £507 million and MindShare, in its first full year of European and Asia Pacific operations, generated £544 million.

WPP: 020 7408 2204 … www.wpp.com