ANALYSIS: MEDIA TRACK - The online explosion is set to boost sales further amid increasing media inflation

The growth of dotcom advertising across traditional and online media over the past couple of years has been well documented.

The growth of dotcom advertising across traditional and online

media over the past couple of years has been well documented.

The need for online companies to build their brands quickly from scratch

caused cash to flood into the full range of media. Television, in

particular, has been one of the main beneficiaries.

One downside is that the extra revenue is largely responsible for

driving up media inflation.

According to the latest forecasts from CIA MediaLab and Admap, display

advertising will grow by 9.8 per cent between 2000 and 2001, from pounds

8.7 billion to pounds 9.6 billion. At the same time, costs per thousand

(CPT) will rise by 4.9 per cent.

Yet while revenues are increasing, audiences are not necessarily growing

at the same rate. National and regional newspaper audiences are forecast

to decrease by 2 per cent and 1 per cent respectively between 2000 and


Inflation of CPT is expected in all other media and total audience size

is forecast to grow by 1.5 per cent against a combined display and

classified revenue growth of 8.2 per cent. This gives an overall media

cost inflation of around 4.5 per cent.

TV advertising is currently aided by ads from finance companies. CIA

expects this to slow next year but it will still make up for a reduction

in fmcg advertising.

The problem for fmcg brands is that media inflation is outstripping RPI

and many fmcg outfits have yielded to the dotcoms. Radio may benefit

from TV inflation as brands turn to cheaper media. Radio revenue is

expected to grow by 11 per cent to pounds 578 million.

Online advertising will be just behind radio next year, with CIA’s

forecasts showing a 150 per cent rise to pounds 500 million.

All sectors have benefited from online companies’ heavy marketing.

However, CIA predicts many dotcoms may fail to secure a second round of

marketing money, which could result in a slight deflation of the dotcom


MediaTel’s database is available at For more

information contact 020-7439 7575 or e-mail

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