The outlook is promising for the press, with ad expenditure for January to June up on the same period last year and well ahead of inflation

Over the past few months much has been written about spiralling media costs, with the greatest emphasis on ITV’s depressed audiences and the press’ desire to compensate for higher paper costs and cover price discounting by passing on these increases to advertisers.

In times of price change advertisers move money around. So it is worth noting trends for the first half of this year. This can best be done by looking at the press or TV expenditure of the major marketing categories.

The “half-time” score is looking very encouraging for the press. It has seen its market “swell” by 13 per cent for January to June, compared to the same period last year. This compares to growth of almost nine per cent for TV.

Both these figures are well ahead of inflation and show that advertisers believe the economy is back on track, with the worst of the recession over.

There are four principal reasons why the press is doing so well this year. First, substantial investment in colour technology over the past three years is starting to pay dividends for publishers. It is attracting revenue by giving advertisers increased choice and targeting opportunities.

Circulations have remained either static or, in some cases, there have been substantial gains. Again, this has either been because of publishers’ investments in promotions, or cover price discounting. The circulation increases have had the effect of reducing cost inflation, making the press more attractive.

Against key volume categories such as retail and the motor industry, press expenditure has remained buoyant compared to TV. The motor industry increased its spend in the press by 9.4 per cent year-on-year. This compares with an increase of 2.8 per cent in TV. TV is holding its own in the retail sector, but press has achieved impressive growth of 26.1 per cent year-on-year, compared to TV’s 26.6 per cent.

Casualties of the recession are returning to the national press – that is those products or services that stopped advertising during 1993 to 1994, particularly corporate advertising. In the first six months of this year it has virtually doubled its spend in the press, to 21m, compared to the same period in 1994.

The signs are there that the press feels this growth can be maintained during the second half of 1995. The Telegraph group will launch its new review section for the Sunday Telegraph on September 17, which is a major investment.

But it will not all be plain sailing in the latter half of the year. Revenue could be lost from key categories such as drink now that spirits manufacturers are to be allowed to advertise on TV.

Meanwhile, motor manufacturers seem to have exceeded their sales targets with the new August registrations, and this may also signal expenditure cuts.

The big factor will be the economy, which at present is finely balanced. Further increases in interest rates will almost certainly affect ad expenditure but, at present, the press seems to be on track to achieve significant growth this year.

The Media Centre

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