TV airtime cost falls to lowest rate since 1997

The cost of commercial television airtime has fallen to its lowest level since 1997, prompting media agencies to encourage their clients to increase advertising activity in the medium.

A combination of increased viewing levels across the board and flat advertising revenues has led to deflation across all of the commercial stations.

While sales directors acknowledge that improvements in the data coming out of Barb play a role, they also claim improvements in the schedule have helped. The Tonight special on ITV1 - Living with Michael Jackson - attracted 15 million viewers at its peak.

ITV has seen its prices drop considerably as it has been the main beneficiary of improved viewing levels, while its advertising revenue has dropped. In January, ITV1's impacts increased by 14 per cent while its revenue fell by 2 per cent.

Steve Platt, the managing director of Carlton Sales, said: "ITV now represents fantastic value and year on year is the best value in the market."

MediaCom's director, Steve McDonnell, agreed that there had never been a better time to advertise on TV. He said the fear of TV inflation has unsettled some advertisers and put them off using the medium, but MediaCom research estimates that there has actually been annualised TV deflation for some audiences since 1997. The cost per thousands to reach the key 16-to 34-year-old demographic has fallen by 0.25 per cent, while housewife CPTs have risen by only 0.5 per cent. ITV's woes may also have been overstated with costs for 16 to 34s rising by 2.3 per cent and housewives by 1.5 per cent - these compare to an annualised increase in the retail price index of 2.1 per cent over the same period.

However, Martin Sambrook, the global account director at Media Audits, expressed caution and said the deflation was redressing previous imbalances.

"One month does not a market make," he warned.

The period of ITV deflation is expected to last until the beginning of the second quarter.