Study warns more ads will not ease inflation

Extra advertising minutage will not alleviate TV inflation because the market will absorb any new supply within 18 months, according to a report by MindShare.

Extra advertising minutage will not alleviate TV inflation because

the market will absorb any new supply within 18 months, according to a

report by MindShare.



The report - entitled Media Inflation - is published on 10 May and comes

just a month after the Incorporated Society of British Advertisers

re-issued its call to introduce advertising on the BBC as a way of

reducing the inflationary pressure on TV airtime costs (Campaign, 2

April).



But MindShare believes that demand is so high, advertisers would buy the

new capacity at the same price.



And the report points out: ’In a way, this makes ISBA’s proposal

somewhat of a paradox. ISBA’s demand for extra minutes will only be

truly effective if its members don’t really want them.’



The report concludes that media inflation will always be a problem and

states that, ultimately, the only way to combat it is for advertisers

and agencies to become more effective in their media planning and

buying.



Mandy Pooler, the chief executive of MindShare, said: ’We’ve decided

there’s nothing that we can do to fix it.’



The report rejects the accepted view that ITV’s loss of audience share

is to blame for TV inflation, claiming: ’There is no evidence that ITV’s

loss of share has so far added to cost per thousands (CPTs).’



The report reiterates MindShare’s view that CPT is ’a misleading measure

of advertiser costs and will soon need to be replaced’. It explains:

’Rapid changes in television are driving a wedge between CPT and the

true unit cost of advertising.’



When new measures are introduced, however, MindShare believes that none

of them will become universal.



The report also undermines the view that media inflation only affects

advertisers, claiming that it impacts on everyone, including media

owners, because it holds back advertising growth.



Advertisers ultimately control media inflation, it claims, so if they

decided to spend less, demand would fall and so would inflation. Pooler

said: ’In a sense, it means that advertisers have much more power.’



The report, which took nine months to compile, aims to show the impact

of inflation on different media over time.