Worldwide: cost of newspaper ads set to rocket

Posted by Val�rie Gazzano on November 29, 2004 at 12:25 PM

The report conducted by media buying group Initiative involving 44 markets around the world brings out both good and bad news: on the one hand it confirms the strength of newspapers, and on the other, it predicts an inevitable breaking point as to advertisment costs. According to the Media Cost and Inflation report, "the cost of buying space in newspapers and magazines will surge 9.2% in the next year, far above the inflation rate." reports The Guardian's Stephen Brook. "The predicted rise in the cost of buying print advertisements comes despite falling newspaper and magazine circulations and a predicted 2.3% rise in inflation. Initiative's 2004 report measured the price of buying advertising on TV, newspapers, cinema, internet and radio by the cost of reaching 1,000 people in 44 different markets around the world. The rise in costs pointed to the strength of traditional media despite a fragmented media market, said Sue Moseley, the managing director of Initiative Futures Worldwide, research arm of Initiative. "It's good news for the media owners and something that the media buying industry has lived with for many years."

From 2000 to 2005 newspaper advertising costs have risen 41%, an increase that Ms Moseley said was unsustainable. But the report said the dramatic rise was driven by China, Latin America and Russia. The rise meant that newspapers were becoming "increasingly less economically viable" for marketers, Ms Moseley said. "Supply is falling, demand is growing but at some point there's going to be a realignment where people say 'hello, that's no longer affordable'." The internet, which currently costs three times the cost of TV per 1,000, will fall 0.5%, the only medium to do so."

Source: The Guardian

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