Initiative study compares global media costs with India

The study throws up interesting titbits, including the theory that Internet advertising costs could rise to as high as 6 per cent in 2006 due to unprecedented demand

Initiative and Futures Worldwide have conducted their annual survey on the cost of buying advertising on traditional media to reach 1,000 adults (CPT) in 54 countries around the world.

This media cost and inflation report provides clients with the true cost of media from an advertiser’s perspective, to help them in their international budget allocation decisions. The prices will have a direct impact on the weight of advertising that can be afforded within a given budget. The data thus enables marketers to plan ahead and optimise their media expenditure across the different media channels and various regions.

As per the report, in 2006, all media costs will rise ahead of economic inflation, for the first time since the survey commenced in 2000.

The global average in media continues to rank in the same order from the most expensive, cinema, with a global average CPT of US$ 59.43 (around Rs 2,635), followed by the Internet (US$ 16.38, or Rs 740), magazines (US$ 11.14, or Rs 500), newspapers (US$ 9.23, or Rs 415), television (US$ 7.06, or Rs 317), radio (US$ 6.32, or Rs 285) and the world’s least expensive medium, outdoor, at a global average cost of US$ 5.37 (around Rs 242).

Comparing global costs with India costs, India offered the lowest CPT for cinema advertising (US$ 6.28, Rs 283) vis-à-vis global cinema CPT (US$ 59.43, Rs 2,674). Across media, Indian media costs are significantly lower than global media costs, with the exception of radio, where the CPT figure stands almost equal at US$ 6.5 (Rs 293).

While comparing India’s media costs in 2004 and 2005, it was found that radio had witnessed a 100 per cent rise from US$ 3.09 (Rs 140) to US$ 6.47 (Rs 292). Next came the Internet, with a 70 per cent increase in its CPT, from US$ 2.22 (Rs 100) to US$ 3.78 (Rs 170). Following the Internet are television with a 23 per cent increase, newspapers with a 24 per cent increase, and magazines with a 19 per cent increase.

Global media year-on-year trends point to an expected rise of 9.1 per cent in the cost of cinema in 2006, the highest price hike of all the media surveyed. The cost of advertising on the Internet is expected to rise by 5.9 per cent in 2006, and it will command the second highest price after cinema. Demand is being driven by a surge in Internet users because of the rapid uptake of broadband and new and increasingly engaging formats for advertisers. Internet advertising investment is concentrated among a handful of global Internet players and demand has outstripped supply. Outdoor remains the least expensive and new technological innovations, combined with its unassailable position as a mass medium, make outdoor an undeniably attractive proposition.

The global average in media costs is being driven by developing countries in East Europe, as well as Latin America and China, where high economic growth, surging demand and scarce supply are pushing prices up sharply.

Mature markets, such as the US and the West European countries, are seeing a more sedate rise in media costs, often below economic inflation, although the picture varies from medium to medium. For instance, the US, the world’s largest advertising market, has the cheapest newspaper, magazine and outdoor prices in the world, but the highest television and Internet costs.

Asia offers the lowest cost for cinema advertising, with the exception of Hong Kong, which has the fourth most expensive cinema costs in the world. Japan, the world’s second largest advertising market, boasts of the highest radio costs and, although prices have remained flat in general in the market, there are signs of economic recovery. A significant finding of the report is that the cost of television in China is set to rise by a staggering 20.1 per cent in 2006, due to rising costs and falling ratings.

The report supplies costs by medium, by country and by region, which are real and not a rate card, including typical agency fees. Initiative’s global media research arm, Futures Worldwide, works closely with Initiative experts from around the world to provide the meaningful analysis critical to putting these figures into context.

© 2006 agencyfaqs!

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