South African media inflation at 2.7% for 2017* sounds like a big win for marketers but media buyers and planners need to act with great agility and skill to extract greater value in this buyer’s market.
Low media inflation hides new levels of buying complexity
The +2.7% 2017 Rate Index is the lowest it has been in three years and is approaching rates last seen soon after the Financial Crisis of 2008. The market is likely to continue seeing only modest rate increases as media owners respond to tightening economic conditions, poor advertiser sentiment and an uncertain political environment.
Yet, while low rates should present opportunities to marketers, the current media environment is fraught with price volatility. New buying opportunities are presented on an almost daily basis. New data is available to support even newer packages and competitiveness between media types and even within media types is accelerating. This market is fast-changing and complex making it extremely challenging to extract value for money.
Therefore, while this market may be beguiling in terms of apparent value, marketers need strong media partners to unlock the inherent opportunities. Good media people do significantly more than book a schedule at low prices. They also have a deep understating of the latest research giving insight into audience composition and migration as well as having the responsiveness to act very fast when good buying opportunities are available. Furthermore, good media people build in top-notch reporting to allow for ROI measurement.
Marketers need to choose their media partners with diligence. They need to ask the hard questions about the true effectiveness of schedules that may look good on paper but underperform in this fast-changing environment.
Intelligent navigation is the key. Look deeply at your media specialist for direction.
Ebony+Ivory is an integrated advertising and media agency on the brink of celebrating 50 years of bringing media strategy, planning and buying plus creative together, for brand investment returns.
MIW (Media Inflation Watch) provides an analysis of capital cost and performance
comparisons resulting in a MIW Index Cost per Thousand (CPM).
MEDIA INFLATION WATCH (MIW)
TELEVISION
ALL TV
Rates +0.15%
Performance +2.02%
MIW Index (CPM) -1.90%
FREE TO AIR TV
Rates +4.40%
Performance +1.04%
MIW Index (CPM) +3.11%
PAY TV
Rates -8.50%
Performance +3.82%
MIW Index (CPM) -11.12%
The final 2017 year’s rates are -0.15% compared to the +3.70% of 2016, performance is at +2.02% for 2017 vs +7.04% for 2016 and the MIW Index (CPM) is -1.90% for 2017 vs -2.30% for 2016.
Free-to-Air’s 2017 rate increase was +4.40% whereas Pay TV’s is way lower at a negative -8.50%, the latter largely due to even better package offerings in the latter part of the year. The increasing rate competitiveness of DStv Pay TV is reflected by the rate card nett rate of R50.10 in 2014 vs R41.00 in 2017 for the 2 Week View packages’ given CPM.
Looking at Performance, Free-to-Air overall is down on the +12.39% increase of 2016 at +1.04% for 2017. But Pay TV’s 2017 performance measure of +3.82% is increased marginally up on 2016’s +3.17%. The MIW Index (CPM) 2017 on 2016 yield for Free-to-Air is a still lowish +3.11% but an impactful negative -11.12% for Pay TV. It was noted in previous reports of the last few periods that Free-to-Air and Pay TV rate adjustments would seem to reflect a repositioning of linear TV relative to competing media platforms and appears to be an opportunistic move ahead of looming changes in the TV landscape occasioned by the still uncertain effects of the migration of the TV signal to digital on Free-to-Air TV viewership and video on demand on Pay TV.
Ever more this appears to be true.
ALL PRINT
Rates +5.10%
Performance -7.68%
MIW Index (CPM) +15.06%
DAILIES
Rates +5.04%
Performance -9.90%
MIW Index (CPM) +17.02%
WEEKLIES/ WEEKENDS
Rates +4.32%
Performance -10.76%
MIW Index (CPM) -17.54%
COMMUNITIES
Rates +6.29%
Performance +0.08%
MIW Index (CPM) +6.37%
CONSUMER MAGS
Rates +5.05%
Performance -10.08%
MIW Index (CPM) +18.57%
BTB
Rates +6.74%
Performance +6.17%
MIW Index (CPM) +5.68%
Rates for the Print medium, not unsurprisingly, continue at a lowish level, pretty much the same as 2016, but performance (circulation) deflation of -7.68% in 2017 (compared to an identical -7.69% of 2016) pushed the MIW Index (CPM circulation) to +15.06% compared to +14.73% in 2016.
Circulation, or the lack of it, continues as the main driver and real issue in this sector. That said Community newspapers, most of which have free-to-home deliveries, look stable on this front (+0.08%). Business to Business also appear good, thanks in part to the continued resurgence of Finweek. Although there are exceptions, it is the rare newspaper and magazine title that does not continue to bleed circulation.
RADIO
ALL RADIO
Rates +5.82%
Performance -8.97%
MIW Index (CPM) +17.82%
BLACK FORMAT STATIONS
Rates +9.12%
Performance -2.24%
MIW Index (CPM) +12.39%
COLOURED, INDIAN, WHITE (CIW) FORMAT STATIONS
Rates +3.90%
Performance -12.86%
MIW Index (CPM) -20.96%
The overall rate increases for radio continue to be considerably lower than those calculated for 2014 to 2016. Year 2017 is +5.82% compared to +7.63% for 2016. Black format stations upped their rates by +9.12% and CIW format stations by +3.90% 2017 vs 2016. Black format stations rate increase percentages continue to be higher than the CIW format stations, with the SABC’s African Language Stations (ALS) higher than its independent Black format and CIW format competitors.
But, whereas most of the Black format stations appear to have added or at least maintained audience (with the average being -2.24% for 2017) most of the CIW format stations appear to have lost audience, some significantly. Accordingly CIW format stations present MIW Index (CPM) values substantially higher than Black format stations and, as noted in previous analyses, often have a calculated CPM considerably higher than the average Pay TV station.
This situation remains unchanged.
OUT OF HOME
Rates +3.5%
Performance change none
MIW Index (CPM) +3.5%
Out of Home again continues to be flat compared to competing media platforms and certainly beneath the CPI. Having said that, much depends on the contractor, format, advertiser demand and location. A good format unit in a prime position will be in demand and command a premium rate.
CINEMA
Rates +0.0%
Performance -6.90%
MIW Index (CPM) +7.40%
The Cinema Index is worked on the top 15 Ster-Kinekor houses (some 140 screens). Cinemark has had no real rate increase but audiences fell quite dramatically in the Jan-Mar 2017 period, then picked up again, resulting in a measured decrease of -6.90% and a MIW Index (CPM) of +7.40%.
ONLINE
Rates +13.5%
Performance 0.0%
MIW Index (CPM) +13.5%
Here a schedule of top sites reflects a calculated increase of +13.5% although in real market terms negotiations would negate most or all of this increase. Note there is no change in given performance because all the sites in the schedule have a CPM rate base, thus the performance measure is a constant.