While the price of media advertising overall has increased at jaw-dropping levels since the pre-COVID era – with television leading the pack, as CPMs are up 40% in the U.S. since 2019 – radio continues to be a bargain for advertisers, with prices at the same levels during 2019. On a global basis, total audience impressions with the same spend nosedived 18% for TV from 2019 to 2021, while the decline was a more modest 6% for radio.
Those are among the conclusions drawn from international marketing intelligence service WARC Media's just-released report on the rising costs of incremental reach.
“The pursuit of incremental reach has generally focused on digital audio-visual channels, as they offer a more straightforward transition from television,” WARC Media Head of Content Alex Brownsell says in the report. “In comparison, offline channels are often under-utilised, despite not having witnessed the same levels of price inflation since 2019.”
WARC singles out radio and outdoor as bucking the media inflation trend. “Relative bargains can still be found in channels like radio and OOH,” the report says.
Along with radio, the same is true for out-of-home advertising, as WARC notes that outdoor ad prices in the U.S. are down 5.8% from 2019.
The bigger picture shows that media inflation is driving up the cost of advertising across channels, most notably TV, as CPMs are forecast to hit $73.14 in the U.S. in 2022. The impact is significantly more pronounced for food and automotive advertisers, which spent 79.8% and 67.7% of their budgets respectively on TV in 2019. With that same level of investment in 2021, according to WARC, total impressions are down 18%, given declining linear TV viewership.
TV advertisers seeking unique audiences from additional media will not find a much better bang for the buck with digital. “Price pressure is being felt across the online media landscape,” Brownsell says, “[and] the growing popularity of retail media formats is pushing up the cost of advertising on platforms like Amazon.” WARC's report cites other sources reporting a 33% increase in paid social media CPMs from 2019 to 2021, and an estimated 9.9% rise in ad costs for over-the-top or streamed video in 2022.
“As linear TV’s share of total media consumption declines, particularly among younger audiences, brands are looking elsewhere for incremental reach,” Brownsell says. “As the global economy teeters on the brink of an inflationary recession, media costs may experience further volatility. Nonetheless, non-video channels are worth consideration if they are right for the audience.”