EMM in the News

CPT is not the Be-all

by Stephen White, EMM: February 2005

We read with interest the recent Initiative Futures inflation worldwide forecasts, often expressed in CPTs (M&M, December, p.36).

At EMM (Effective Media Management), we try no to mix our currencies up too much when discussing year-over-year potential media cost rises and falls.

We tend to stick to inflation/deflation estimates as the principal currency and not to mix up CPT examples, as these can show some wildly concerning trends that could confuse some advertisers.

We think CPT is more of an Anglo-Saxon term since, across Europe, cost per GRP is the more prominent cost measure (for television, anyway), and in the US cost per point and CPMs are both used for evaluation and year-over-year comparisons.

Most advertisers want to know how much more (usually) they will have to pay next year and, prices are rising too much, what are they going to do about it.

Indeed, some clients believe that, whatever media inflation may be, it is a cost that cannot be passed on to advertisers that are unable and unwilling to respond to the sort of price rises hinted at by Initiative.

We rather like this positive attitude from clients in the know, although we are concerned that the majority of advertisers may be confused with too many price-rise examples of media that may not be of primary use by the majority.

In Europe, the key media of TV and Print usually represent around 60% of the total media expenditure in most of the countries. In our view, these media will inflate gently between around 2% and 5% in the bigger markets.

The smaller markets, however, will show print inflation of around 5%, with Lithuania showing the biggest rise of 9%. The radio medium will continue to shadow TV inflation trends but tends to always be on the low side of whatever TV cost inflation exists in the various markets.

By looking only at inflation, a more conservative and broader-based view of potential cost increases is apparent, which, in our view, is the most important indicator for clients, given that, in markets like the UK, TV costs in 2005 are likely to be the same as they were in 1997-1998 – a great incentive for advertisers to use the medium.

This all goes to show that advertisers need not be frightened off by CPT stories.

Source: M&M Media and Marketing: February 2005, pp. 5.