Media costs are soaring globally, led by TV, and U.S. TV in particular, according to WARC Media’s latest Global Ad Trends report.
Globally, TV CPMs are up 9.9% on average year-over-year and up 31.2% since 2019 — the steepest increase in more than two decades.
In the U.S., the average CPM is forecast for $73.14 this year — up nearly 40% versus 2019 pre-COVID levels, when the U.S. average was $52.71.
WARC points out that the impact is particularly strong in heavily TV-dependent categories like food and automotive. If those categories had maintained their 2019 levels of investment in TV (79.8% and 67.7%, respectively), by 2021, their volumes of impressions would have dipped by 18 percentage points, the analysts point out.
While some advertisers have reduced TV budgets in the face of declining linear viewership and rising costs and the growing reach and power of digital media, digital media have also been impacted by inflation.
Paid social media CPMs jumped 33% between 2019 and 2021, according to Skai, and the growing reach of and advertiser demand for retail media platforms have pushed up those prices, as well.
And while channels such as broadcaster video on-demand (BVOD) provide an alternative source of incremental reach, over-the-top/streamed video ad costs are also on the rise. The World Federation of Advertisers (WFA) has forecast that prices for advanced TV formats in the U.S. will rise 9.9% this year.
Budget shifts have mostly favored video and other digital media, despite generally lower levels of inflation in offline media.
In the U.S., radio prices have remained basically flat since 2019, and out-of-home (across traditional and digital) prices are 5.8% lower than in 2019.
“As the global economy teeters on the brink of an inflationary recession, media costs may experience further volatility,” but “non-video channels are worth consideration if they are right for the audience,” said Alex Brownsell, head of content, WARC Media.
Golly, that average U.S. media CPM of $73.14, seems a tad on the high side. Assuming that the CPM is an audience- weighted average of all ad units and platforms, it is way above the comparable stat for TV. We did an analysis recently for a 50/50 mix of "15s" and "30s" for all forms of TV---linear and streaming--- for all "viewers" aged 2+ and all dayparts and came up with a CPM of about $17. If our estimate is correct---and we think that it's close to the mark---then radio, primt media, OOH and digital video/display ad sellers are really raking in huge CPMs---like well over $100 and maybe as much as $200. Or, perhaps, some clarification by WARC is needed.