Ad Spend Future of TV

TV bears the brunt of rampant media inflation as advertising costs jump 31.2%

By John Glenday | Reporter

August 3, 2022 | 4 min read

Media inflation is hitting television hard, with advertising costs increasing by 31.2% from pre-pandemic levels – the biggest jump in two decades.

Compiled by Warc, the bi-monthly Global Advertising Trends analysis found no let-up in surging global TV media costs, with the sector up 9.9% year-on-year in 2022 alone.

The closely-watched cost per thousand (CPM) metric now stands at $20.01 globally, but this figure conspires to mask significant regional disparities, chief among them the US, which will hit $73.14 this year – a 40% premium on 2019 – as the market accelerates deeper into unaffordability. By contrast, cooler heads prevail in China and the UK with respective CPM values of $3.09 and $10.56, and Australia standing somewhere in the middle at $34.69.

Television

Media inflation is sending TV advertising costs soaring

The marketing intelligence report notes the heightened impact of ever-rising prices on the food category especially, with advertisers suffering an 18% drop in impressions between 2019 and 2022 for every dollar spent.

Alex Brownsell, head of content at Warc Media, said: “As linear TV’s share of total media consumption declines, particularly among younger audiences, brands are looking elsewhere for incremental reach. However, the efficiency of delivering reach via non-TV channels is being threatened by inflation across the media ecosystem.”

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While TV takes the cake for spiraling prices, it is far from alone, with digital media costs also rising fast as television advertisers look elsewhere for more cost-effective channels. This has seen paid social CPMs rise by 33% between 2019 and 2021.

These fluctuations present often-overlooked categories such as radio in a more favorable light. In Australia, for instance, radio CPM media costs have fallen from $6.22 in 2019 to $5.93 in 2022, mirroring a similar trend in the UK, where costs have dropped from $2.48 to $2.39. Out-of-home (OOH) is emerging as another attractive proposition for bargain hunters, with outdoor ad prices in the UK now 3.1% lower than pre-Covid times. This trend is even more pronounced in the US, where the OOH market is now 5.8% more affordable than it was in 2019.

Brownsell added: “As the global economy teeters on the brink of an inflationary recession, media costs may experience further volatility. Nonetheless, non-video channels are worth considering if they are right for the audience.”

Rising costs have informed a gloomy prognosis for UK ad spend, with the Advertising Association (AA) and Warc predicting stagnation in 2022 before outright contraction sets in the year after.

Ad Spend Future of TV

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