Lodestar’s media pricing outlook: Emerging markets lead inflation

Lodestar Universal India has released its global study ‘Magna Inflation Update’ on the media pricing outlook for 2010-2011. It can give advertisers a sense of inflation expectations at a global level, apart from offering medium level insights across 48 key countries.

At the outset, the study makes it clear that each market demonstrates inflation rates based on internal dynamics showing that the pricing trends are relatively independent of the broader economic parameters. It states that countries that have been fortunate enough to avoid a prolonged downturn have already begun to see optimism in the turn that the media industry has taken.

The study states that while average rates of inflation within Asia are moderate, the difference between the countries is marked and emerging Southeast Asian nations are expecting higher levels of inflation on an average.

It further projects India’s inflation at 9% for 2010. "This is in the upper mid-band when we compare to the other countries with developed nations like UK, Japan looking at a deflation and economies like Philippines, South Africa and Turkey moving forward at double digits," the study states.

The Indian context shows significant increases across TV, newspapers and the Internet, the key media mix driving most advertisers and increasing pressure on advertisers thus to not only match, but beat inflation to drive value from their ad spends.

"The challenge lies more in the fragmentation which splits up audience media consumption, rather than the actual price increase, unlike other countries. This then calls for sharper planning solutions which allow for better targeting and focused media solutions," it states.

The trend challenges media owners as well - pressure to hold prices despite growing acquisition and running costs. Lodestar says that increasingly this will lead to offering multi-solutions by mega media brands which will gradually buy into specific audiences and market to them across media contact points.

"Partnering the client’s quest for consumers would allow better monetization and a sharper content approach benefitting them in the long run," the study notes.