ANALYSIS: MEDIA TRACK - The soaring cost of airtime is forcing TV advertisers to invest in alternative media

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.

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

Sorrell.



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

and 1999.



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

it.





MediaTel’s database is available at www.mediatel.co.uk. For more

information contact 020-7439 7575 or e-mail info@mediatel.co.uk.



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