TV, OOH and radio set to drive return to media inflation

Big offline channels are forecast to outpace digital media this year, with the exception of print.

Radio: forecast to be most inflationary medium in the UK this year
Radio: forecast to be most inflationary medium in the UK this year

Rising prices in TV, out of home and radio are set to drive a return to inflation in media this year as post-pandemic advertising activity picks up. 

ECI Media Management’s Annual Media Inflation Report is forecasting 3% inflation in media globally, with a similar level in the UK at 3.4%. 

All offline media is expected to experience a reverse in the deflation seen during 2020 – a year rocked by the impact of Covid-19 – with the exception of print. Magazines and newspapers are forecast to remain deflationary at a global level and in the UK.

The UK was one of the markets hardest hit by the pandemic, experiencing a large reduction in advertising investment, the report said. Although restrictions currently remain in place, TV, OOH and radio are predicted to bounce back sharply, to well above their 2019 positions. 

Radio will see the biggest rise in inflation (up 8%), followed by TV (7%), and OOH (5%). The relative price rises for these offline media channels are expected to outpace digital channels, such as online display (2%) and video (3%). 

However, print media is expected to follow the global trend and remain deflationary, with magazines and newspapers experiencing 2% deflation.

In North America, offline media will also return to inflation but only at about 1% – far less than the 4% in digital that is driving overall prices to rise in that region. Digital video will have the highest level of inflation at more than 5%, indicating how advanced the streaming video market has become in the US and Canada.

Meanwhile, deflation for magazines and newspaper media is even more severe in North America, with respective declines of -4% and -5%.

In Asia-Pacific, all media channels are expected to return to inflation this year, with the exception of magazines.

ECI Media Management’s global chief executive, Fredrik Kinge, said: “With media inflation across the world looking set to bounce back and the vaccine offering the prospect that the world will start to reopen, we are optimistic about the year ahead for the advertising industry. 

“However, some caution is still required as we wait to see how measures against the pandemic progress. With TV pricing likely to increase in 2021, there is still plenty of opportunity for brands to maximize consumer reach. And, as digital increases both its inflation levels and its share of advertising budgets, it is imperative that marketers understand the transparency and effectiveness of their investments.”

While rising media inflation generally means higher costs for advertisers, it is also a signal of confidence in the sector and the economy more generally. Writing for Campaign last year, Group M’s global president, business intelligence, Brian Wieser, described the factors that drive media inflation and what marketers can do to fare better than the overall market

ECI Media Management’s Annual Media Inflation Report forecasts media inflation for seven key media channels every February; TV, digital display, digital video, newspapers, magazines, OOH and radio at a global and regional level, and across 60 countries.


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