How to Deal with Inflation in Traditional Advertising Rates
Inflation Hitting Traditional Advertisers Hard
Like everything else, advertising rates on Traditional Media, such as radio and television, are impacted by inflation. As these costs rise, advertisers relying on these channels to reach customers must apply strategies to avoid unsustainable customer acquisition costs and to ensure advertising continues to deliver an ROI.
Current Media Inflation Forecast 2022
Broadcast television has seen the highest media cost inflation in 2022 with a 15.6% rise, but analysts don’t expect it to stop there. They forecast another 9.7% increase in 2023. It’s no wonder we’re seeing investment in broadcast TV and Pay TV stagnate.
Addressable/Linear TV (programming watched when aired) and Streaming aren’t far behind but continue to see additional investment as audience viewing habits shift in that direction.
News, Magazine, and Radio Advertising are experiencing less of a rise in media cost inflation at around 2% to 3%. But at the same time, advertisers are pulling away from these media despite the unique advantages of radio advertising.
Overall, the cost of traditional advertising has risen 6.71%, with another 5.06% expected in 2023.
Many advertisers might be forced to make tough decisions to either spend more to maintain their brand or suffer erosion. While neither is a desirable option, this is the current reality we live in, so advertisers must think strategically to limit the collateral damage of out-of-control advertising budgets.
How to Manage Media Cost Inflation
We recommend an aggressive buying strategy where advertisers negotiate rates lower than publisher rate cards.
A publisher rate card is like the sticker price on a car lot. It’s just a conversation starter. They expect you to negotiate; if you don’t, you’ve just made their day.
With that said, some just pay the “suggested retail price” because they think it’s firm or would rather pay more than have to haggle. Unfortunately, in the current inflationary environment, you can’t afford not to be more aggressive, even an over-the-top approach to secure your brand’s future.
Many negotiation factors can both lower your traditional advertising rate and increase the ROI you get from that advertising. You can negotiate your way to a better deal by monitoring, managing, and discussing:
• Ad rate trends
• Supply and demand
• Package prices
• Flexible time slots
As part of the negotiation, you could get the publisher to throw in valuable audience research in exchange for paying the sticker price.
Of course, hardball negotiation with the publisher can lead to fallout for spots that don’t run, which means you must invest more time in monitoring and managing that to ensure you’re getting what you’ve paid for.
In other words, during traditional advertising inflation, you may need to spend more of that precious time you probably don’t have to negotiate, monitor ad placement, and manage ads. However, while it takes more time, it leads to a better overall CPM and more efficient traditional advertising.
We Already Do This with Traditional Advertising
Before the current media inflation forecast of 2022, Colling Media was already taking this more cost-effective and efficient approach to traditional advertising to get the best price on the best package and deliver the best CPM.
This is how we have done things since our founding over a decade ago, and we can do it for you.
Looking to control the impact of media cost inflation on your traditional advertising budget? Contact us today.
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