Ads are about to get more expensive again (except print, that is)
The price of ad inventory will ”bounce back” in 2021, with one study expecting a global 3% inflation in online prices as prices for offline sources deflate a further 5.3%.
ECI Media Management expects a “better year for most media vendors”
The Drum looks closer at ECI Media Management’s latest Media Inflation Report to understand how pricing will recover after a pandemic that shook demand.
Recovery
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ECI Media Management expects a ”better year for most media vendors”. There’s an exception here. Print – be it magazines or newspapers – is expected to deflate globally.
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The UK advertising market was one of the hardest hit by the pandemic, says the report. Despite current restrictions, with the vaccination well underway, prices are expected to recover.
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TV, OOH and radio are predicted to bounce back sharply, to well above their 2019 positions. Digital media, which retained its inflationary positions during 2020, will see less dramatic increases in price.
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CTV uptake ”accelerated rapidly” in 2020 (eMarketer) and ad revenue is expected to rise from $7bn 2019 to $11bn in the US by 2021.
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Podcasting has had a similar surge in lockdown. Listener numbers are expected to breach 2 billion by 2025. Ad spend could triple to $3.5bn from 2019 to 2025.
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The demise of the third-party cookie and the introduction of blockchain were also cited to inspire spend variations in the coming years.
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Globally, the data shows the hole that 2020 carved into budgets.
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A closer look at 2020 shows the hardest-hit sectors. Radio ad prices deflated by 9.4%, magazines fell 7.4%, newspapers 7.2%, TV 4.6% and OOH 2.2%. Digital display actually became 2.4% more expensive, and digital video 3.7%.
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In 2021, this picture adjusts for growth. Mostly.
What ECI says
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ECI Media Management’s global chief executive, Fredrik Kinge, warns that: ”Some caution is still required as we wait to see how measures against the pandemic progress.”
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It notes the change of leadership in the US, the question marks over the UK’s future trade deal, the working from home revolution and two summers of sport coming down the tube this year, all altering pricing.
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Environmental and diversity movements will also change the motives of some comms, which will feed into how the media is bought.
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It says that media pricing was hurt most in Europe, and specifically the UK. It is very closely linked to lockdown levels. Online inflation will make up lost ground this year. Meanwhile, APAC had the most resilient inflation.
If you want more detail, read the full report here.