The good news for U.S. and worldwide advertisers is that the rate of advertising cost inflation is projected to decelerate this year, falling below the overall increase in consumer price inflation.
In the U.S., the overall rate of ad-cost inflation will decline 1.7 points this year to 4.2% from 5.9% in 2022, according to new estimates released this morning by ECI Media Management.
"This is mostly driven by TV inflation which will be at 6.8%" in 2023, a sharp deceleration from U.S. TV ad cost inflation of 12.6% in 2022," ECI notes in its just-released first quarter 2023 "Inflation Report."
ECI goes on to note that TV remains the most inflationary U.S. media buy, which is being offset by marketers shifting TV ad budgets to CTV (connected TV) options.
"All other media types are also expected to inflate" in the U.S., including online video (+5.5% this year), out-of-home (+4.7%) and rest of the mix below 3%.
Globally, the average rate of ad-cost inflation across media will decrease by 0.8 point to 4.4% this year from 5.2% in 2022, led mainly by the increasing costs of TV (6.8%) and online video (+5.1%) (see below).