• by Maarten Albarda , Featured Contributor, February 10, 2014

One of the contentions my co-author and fellow Online Media Spinner Joseph Jaffe and I are making is that “The Big One” is coming -- or, actually, has arrived.

The big “what,” you ask?

We refer to a series of developments, each in itself so disruptive it could and should drive marketers and their ecosystem to pursue innovation in how they connect with consumers as priority number one, two and three. Think about digital everything and everywhere, TV and campaign-centric marketing in a consumer-centric era, big data as a potentially very beneficial marketing tool vs. big data as a government and marketer tool of mass trust destruction. And, oh, yes, inflation of media costs.

We have all witnessed how marketers have applied their collective wisdom regarding all these developments during the last Super Bowl.

The world apparently has not changed for GM, Doritos, Audi, Pepsi, CarMax, Kia and all the other brands that jumped on the $4 million-a-piece-bandwagon. Perhaps it changed a little for Coca-Cola, which managed to create a media firestorm over its (excellent) “America the beautiful” ad. But I am predicting none of these brands will gain or lose market share or brand awareness now or by the end of the year in ROI from their puppies, time-machines or rainbow farts.

The exception might be Goldieblox, which received an enormous dosage of awareness courtesy of Intuit (what it did for Intuit is wholly unclear).

Back to inflation.

The World Federation of Advertisers (the “global” ANA) reports media inflation data every year, as collected by auditors Accenture, Ebiquity, EMM and a large number of global media agency networks for TV, radio, newspapers, magazines, outdoor and online display advertising across 43 countries. They now also report the previous year’s projections versus actual media costs in a terrific display of accountability. They were pretty much spot-on for 2013.

Let’s look at TV first, as it still eats between 50% and 90% of every media budget. All 43 markets showed an increase in projected budgets versus 2013, except for Italy and Portugal (0%). The highest increase overall was in Venezuela, with TV inflation at + 33%. Indonesia leads the Asian region with +21%, and in Europe, the Ukraine, Russia and Turkey lead with +14%, +9% and +9% respectively. The U.S. prediction is +6%.

For digital, through its proxy of online display, again all 43 markets show an increase in cost except Switzerland, with 0%. The highest inflation is predicted for Thailand with +34%. In Europe, the same three markets that show the highest TV inflation also show the highest online display increases (between +15% to +20%). In the Americas, both Venezuela and Argentina are at +27%, and the U.S. comes in at +5%.

I personally don’t know of any marketer who can or does increase their annual marketing budget by +5% or more, except when setting budgets for the promised lands of BRIC or MINT. But sadly, in these markets you actually need a lot more than the U.S. inflation of +5%, as the numbers show.

It’s simply not realistic for marketers to keep paying more for the same or less. Something’s got to give – and in the long run, it can’t be to simply order your media/digital agency to negotiate the inflation away (although that is exactly what marketers and their procurement people do). The only way out is to innovate how you connect with consumers.

Or, as Jaffe likes to say: “The only way to innovate is to innovate.” On your marks, get set, go!