| |

TV pricing to enter deflation in US

TV pricing to enter deflation in US

TV pricing will in the US will deflate by 1.9% in 2023, a new report from media audit consultancy ECI Media Management has revealed.

This represents a significant change from the company’s forecast last quarter, in which it predicted TV pricing would actually inflate by 6.6%.

The Media Inflation Report forecasts inflation for media types across 10 different markets, including the US, UK, Germany, France and China. The report found that, while many countries enjoyed economic growth in 2022 following a return of consumer confidence after the pandemic, that economic bubble has now burst.

ECI Media Management said: “With interest rates and the cost-of-living skyrocketing in many countries, consumers are tightening their belts and businesses are following suit. Marketing budgets are being slashed again and many companies have had to make significant layoffs.”

The report attributes the deflation in TV pricing (pictured, below) to factors such as banking volatility, rising fears of a recession in light of the US administration’s debt ceiling issues, and the ongoing industrial action being driven by the Writers Guild of America. In the last few days, however, President Biden appears to have struck a deal with the US Congress to avoid a potential debt crisis.

ECI Media Management predicts that OOH and radio will hold stead thanks to employees returning to the office in greater numbers, increasing road traffic and drive time. The proliferation of AVOD services will also drive “significant growth” in the online video, according to the report.

In the UK, TV inflation is also expected to fall. The report attributes the downward trend in prices to a drop in revenue year-on-year and a slowdown in the decline in audience viewership. ECI Media Management forecasts a rise in OOH prices due to increased revenue, with two-thirds of the medium now being digital.

The report said: “Radio inflation will remain consistent with 2022 estimates, although price increases are expected from both Bauer and News Broadcasting.”

Fredrik Kinge, global CEO of ECI Media Management, commented: “It is our hope that, armed with these insights, advertisers will feel confident in their ability to not just survive the current situation, but to capitalise on the rapidly-changing media landscape and economy context in order to drive higher media value for their brands.”

Vic Davies, Director of Strategy and Marketing Analytics Lab, Royal Docklands Business School University of East London, on 08 Jun 2023
“This needs to be qualified by the potential political attempts to revive economies as we enter election cycles in USA and UK, How the ad revenue pie is divided up will also depend on the ability of any medium to deliver audiences , a point alluded to in the reference to OOH. For the spectrum of TV/video providers, this mean not just delivering quantity of audience, but its demographic makeup and increasingly their ability to prove that those audiences are attentive to content.”

Media Jobs