Media rates to rise

24 December 2010

LONDON: Most major advertising markets are likely to witness an increase in media rates next year, Billetts, the consultancy, has predicted.

The US posted 5% inflation on this measure during the first nine months of 2010, an acceleration set to fall within the 7% to 9% range for 2011, according to Billetts.

But newspapers and traditional local radio may endure further struggles as digital services continue to steal share.

In France, rates linked to TV shows targeting audiences aged 15 years old or more climbed 6% over the period to September, while the internet recorded a 7% improvement and magazines logged a 13% leap.

Next year, TV figures could expand by 5% - matching the national average - a total reaching 10% for magazines, 7% for the web, 5% for radio, and 4% for outdoor.

The primary factors shaping trading conditions include the reduction in peak time spots on public TV stations, but the popularity of DTT alternatives has helped stimulate competitive pricing.

A strengthening economic climate in Germany is encouraging brands to boost budgets, a move that should yield a modest uptick of between 1% and 2% in costs next year, rising to between 2% and 3% for TV.

German press titles are offering a variety of incentives to attract advertisers and agencies, an important strategy as circulation declines.

Elsewhere, the funds required to invest in TV surged by 11% in the UK from January to September, 1% ahead of the market, and could grow by 3% in 2011.

The challenging outlook facing the print industry means press and magazine advertising remains comparatively good value.

Italy experienced deflation in 2009, but while most mainstream media have enjoyed positive shifts over this year to date, newspapers are still suffering from negative trends.

Viewer numbers for terrestrial television channels have also dipped, not least as satellite platforms are gaining favour.

Despite this, the fact two stations hold 98% of the linear TV sector, so brands must bargain hard.

Prices jumped by 2% in the year to September in the Netherlands, and a similar result is expected next year.

Scandinavian countries like Denmark and Norway should see a moderate rise in the 1% to 2% range in 2011, with Sweden potentially growing at a faster pace.

Spain has seen particularly high inflation, up 22% in the assessment period, and an additional increase in the region of 5% to 10% is likely next year.

This follows a substantial drop in 2009, and has partly resulted from the removal of ads on the TVE1 and TVE2 broadcast networks.

Russia was also pegged to deliver an improvement of 15%, totals hitting 30% in both Turkey and the Ukraine.

Data sourced from Billetts; additional content by Warc staff