Out with the new (media) - in with the old

Call it the revenge of the "old" media. Driven by a generally robust global economy and a rebound in the advertising business, the cost of placing ads is surging. And the gains are led by media that a few years ago were nearly written off as dead - newspapers and magazines.

Call it the revenge of the "old" media. Driven by a generally robust global economy and a rebound in the advertising business, the cost of placing ads is surging. And the gains are led by media that a few years ago were nearly written off as dead - newspapers and magazines.

These are among the findings of a global survey of media costs by Initiative, a firm that buys advertising space and airtime for international marketers.

Initiative predicts that next year, the cost of advertising in newspapers will rise an average of 9.2 per cent across the 44 countries it surveyed. Other media are expected to show significant increases too, with only radio and internet advertising falling short of the forecast 3.2 per cent average inflation rate.

The advertising industry seems to be emerging from a long slump, with overall spending - not just the rates charged by media owners - expected to show solid gains next year. And, like the global economy as a whole, the rise in advertising costs is being led by developing countries like China.

"What we saw in 2004 was a recovery in the advertising economy, and this makes it look good for next year," Sue Moseley, head of Initiative Futures, the firm's research arm, said. The firm's forecasts are based on a commonly used measure in the industry, called "cost per thousand", which measures the price of reaching a thousand consumers with a marketing message. In addition to newspapers, radio and the internet, it included television, cinema, magazine and "outdoor" advertising on posters and the like.

The survey does not measure the effectiveness of different media, or the amount of time that consumers are exposed to an ad. But the vast divergence in costs tells that story, or at least shows how much advertisers value different media. Cinema ads, which reach a captive audience on a giant screen, are by far the most expensive, with an average cost per thousand of $78.27 (£42.68). Outdoor ads are priced lowest, an average of $5.70 (£3.11).

Though newspapers may show the biggest increase in cost per thousand next year, with a compound, five-year increase of 41 per cent, the surge is not caused entirely by rising ad rates. Because circulations of many newspapers around the world are falling, the ads reach fewer readers even if prices are held steady, Moseley said.

Still, the survey, which is based on the prices that Initiative negotiators expect to pay, not the published rates, does suggest some reappraisal of the relative values of some media, after the hype of the internet boom years subsided. Though numerous surveys predict big jumps in overall spending on internet ads, for example, Initiative predicts that the cost per thousand will actually fall by 0.5 per cent next year.

© 2004 'International Herald Tribune'