Analysis: Global TV media costs soaring
August 5, 2022
Media inflation is driving up the cost of advertising across channels, with TV most affected, according to an analysis by WARC Media.
The latest Global Ad Trends report finds that, globally, TV CPMs (cost per thousand) have increased 31.2 per cent since 2019 – the steepest incline in more than two decades – and are up 9.9 per cent year-on-year in 2022.
The trend is especially pronounced in the US, where TV CPMs are forecast to reach $73.14 (€71.51) in 2022, an increase of 40.0 per cent on pre-COVID costs.
For some categories the impact is heightened. According to WARC Media data, advertisers in the food category spent on average 79.8 per cent of their budgets on TV in 2019, and in the automotive category, 67.7 per cent. If they were to have maintained that same level of investment, by 2021 the volume of impressions would have decreased by 18 percentage points.
This twin trend of declining linear television viewership and rising TV media costs is encouraging advertisers to look elsewhere for incremental reach, but price pressure is being felt across the online media landscape.
Paid social CPMs increased by 33 per cent between 2019 and 2021 (source: Skai) and the growing popularity of retail media formats is pushing up the cost of advertising on platforms such as Amazon.
Channels such as broadcaster video on-demand (BVoD) provide an alternative source of incremental reach. However, over-the-top (OTT or streamed video) ad costs are rising too: inflation in advanced TV formats in the US is forecast to reach 9.9 per cent in 2022, as per World Federation of Advertisers (WFA) figures.
The pursuit of incremental reach has generally focused on digital audio-visual channels, as they offer a more straightforward transition from television. In comparison, offline channels are often under-utilised, despite not having witnessed the same levels of price inflation since 2019.
In Australia, the cost of radio media in 2022 remains 1.1 per cent below pre-pandemic levels, while prices in the US are largely unchanged three years on.
A similar picture emerges in out-of-home (OOH), incorporating both static and digital panels: in the UK, outdoor ad prices are 3.1 per cent lower than before COVID-19, while, in the US, OOH remains 5.8 per cent cheaper than it was in 2019.
“As the global economy teeters on the brink of an inflationary recession, media costs may experience further volatility,” warns Alex Brownsell, Head of Content, WARC Media. “Nonetheless, non-video channels are worth consideration if they are right for the audience.”