Last month, WPP issued a stark warning to network TV controllers on
both sides of the Atlantic: the fact that the cost of advertising is
rising by as much as 10 per cent every year is forcing clients to turn
to other media.
’As long as network price inflation continues, clients will increasingly
experiment with alternative media,’ said WPP’s chief executive Martin
Mediapolis joined the fray last week, declaring its frustration over
rising ITV prices. Russell Boyman, managing partner at the agency, said
that since the start of the year, prices had risen by up to 30 per cent
for certain spots.
The graph shows that ITV’s revenue and cost per thousand have increased
steadily since 1995. ITV’s average monthly revenue grew from pounds
131.5 million to pounds 156 million between 1995 and 1999 - an increase
of 19 per cent. The average monthly cost per thousand has risen from
556p to 737p over the same period.
However, the ITV audience has been falling steadily. Since 1995, the ITV
network’s annual audience share has dropped from 37 per cent to 31 per
cent and average viewing time per person has shrunk by 80 minutes.
This year the situation has been exacerbated by dotcom advertisers
increasing demand and pushing up prices. Revenue for the ITV Network
during January was pounds 156 million, according to agency estimates.
This is an increase of almost 13 per cent on last year’s figure for that
month, which itself is more than double the revenue growth between 1998
Channel 4 has experienced similar growth, with the average CPT
increasing by 28 per cent since 1995, and average monthly revenue by 32
per cent. It has, however, kept its audience base, dropping just 0.6 per
cent since 1995.
In a world of fragmenting media, ITV is being challenged to maintain its
position as a mass broadcaster - and the high charges that go with
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