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India media inflation to cap at 9 pc in 2010

05-February-2010
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India media inflation to cap at 9 pc in 2010

A recent study by Magna, the research and insights arm of IPG, reveals that media pricing will continue to impact advertising adversely in 2010 and ahead, especially in the emerging economies. As the world emerges from the ravages of recession, countries like China, the Philippines in Asia, along with markets like Turkey, South Africa and some LATAM nations, will see inflation in double digits. This is in contrast to most of the developed nations, which are mostly stagnant with Japan and the UK showing a negative growth.

Brought to India by Lodestar UM, the Magna Inflation Update captures media pricing trends in over 45 countries spanning the globe. Anamika Mehta, COO, Lodestar UM, said, “This is a unique compilation which puts media inflation across countries in perspective. For a host of our multinational clients, this offers us a common context for recommending investments across markets and also on how to leverage our interactions with global media partners.”

Key India highlights

• Digital media to see the highest inflation rates with 12 per cent in 2010, increasing to 13 per cent in 2011

• Newspapers and TV likely to keep tandem in terms of pricing increases, though the former will be driven by more by costs and the latter by fragmentation

• Growing media like radio will hold on in the current year, but increase by 5 per cent in 2011

• Magazines will progressively become more expensive to use (5 per cent in 2010) with most of them having fewer but more involved readerships

At a global level, TV is the lead media in terms of inflationary trend. Given its high reach and impact across markets, it throws up a leverage challenge for communicators. This is followed by newspapers, especially in the emerging markets. Other media have pockets of relatively high increases – viz., outdoor in the US and the UK; radio in Argentina and Indonesia; or cinema in South Africa or Turkey.

Interestingly, there is no general sentiment one way or the other; no overarching movements across media within a country or countries within a region. Inflation expectations appear to be dependent on specific dynamics within each market rather than the broader economic trends.

Mehta added “Pricing across the globe is strongly driven by two things – the regulations, which control the specific market, and the level of concentration in media. Strong regulations and few large players lead to strongly controlled media markets, where advertisers have much lesser say. China suffers from the former, while Brazil and Japan are examples of the latter. In contrast, countries like India are highly media competitive with advertisers having a significant say on the supplier dynamics.”

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