In the report, MIW illustrates that for the R100 adspend in 1995, advertisers would spend R291 (all media) in 2004 for the same audience delivery. Consumer Price Index (CPI) for the 10-year period was only R183. In effect, a margin of over R100 has been built in. Radio media inflation in particular, stands out as a culprit for advertisers. For the R100 spent in 1995, advertisers were paying R517 in 2004.
Only community newspapers have remained in line with CPI, with R100 spent in 1995 costing R189 (CPI R183) in 2004. "It appears that most media players are charging more and delivering less to advertisers over the last ten years with exception of one or two players. Even those that have performed better have raised rates ridiculously without real justification," says Bowles. "Only community newspapers have remained in line with CPI to stay affordable for all advertisers whether small, medium or large sized businesses."
Bowles goes on, "It's amazing, while other industries have to remain as close to CPI as possible to stay competitive, the media industry have in most cases been doubling their margins. And to make matters worse they discount themselves to their true value and advertisers believe they're getting a great deal, when in reality they're not getting any deal at all. This has left community newspapers in a position where they can't offer the same discounts that other media offer as they don't have the margins to match them."
Bowles concludes: "Advertisers need to understand the real value they're paying for when evaluating budgets, before discounts are tabled. Community newspapers continue to perform better each year and remain affordable - that's real value for advertisers!"
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