Cost of TV advertising set for biggest yearly drop in a decade

by Jennifer Whitehead, Media Week 09-Sep-08, 07:30

LONDON - The cost of advertising on television is forecast to be 22% lower in September than the same time last year, prompting calls for advertisers to reconsider their plans for the month and the remainder of 2008.

Media auditor Billetts expects the CPT (cost per thousand) figure for major ad categories, such as housewives with children, ABC1 adults and 16 to 34-year-old adults, to be down by between 22% and 23% this month compared to last year. It is also forecasting that ad rates for the remainder of the year will be cheaper than 2007 by significant levels.

ITV said in August that it expects net advertising revenue to be down by 20% in September because of the fillip provided by the Rugby World Cup in 2007. Other broadcasters are also expecting a similar decline. If Billetts' September forecast is accurate, it would make it the single most deflationary month since station price started to be used as a trading metric.

Billetts says task-led activity should return ad funds to the bottom line. Budget-led activity must ensure sufficient deflation is factored into plans and optimum weekly weights aren't exceeded.

Martin Sambrook, managing partner of Billetts, said: "Agencies do tend to leave a bit of ‘comfort room' when costing their plans, but in the market conditions we are likely to see, usual planning parameters would give wildover-deliveries."

Tess Alps, chief executive of Thinkbox, said: "September's price deflation is delivering sensational value to those clever advertisers increasing their TV spend."