Excellent news for advertisers: June TV prices are closer to January prices this year

Typically travel advertisers have looked to January as a cost-effective time to drive brochure enquiries and calls using TV. Thereafter the car, financial and of course food and drink brands would take over and drive TV prices too high, especially for less frequent advertisers.

But this year is different. ITV has a £17 million hole in its June budget meaning June TV prices are much closer to January’s.

After seeing an 8% year on year increase in ITV1 January prices, growth was seen in every month from Jan to April. This upward trend changed in May when ad revenue slipped 8% lower than in 2010. And Ad revenue now looks set to fall year on year by £17million in June, a percentage decline of over 15%.

In June 2010 the World Cup helped ITV1 attract almost £109m in airtime revenue. In June 2011 total revenue is forecast to be only £92m, the weakest monthly performance since August 2010.

Commercial advertising impressions also play apart in pricing and with no World cup, ITV are forecasting an increase in commercial viewing by Women of 7%, with Adult impacts set to decline by about 3%.

All of this translates into an expected 11% reduction in the average Adult cost per thousand (CPM) viewers year-on-year. The advantage is greater for advertisers targeting Women specifically, as prices look set to be lower by over 20% year-on-year.

Prices are expected to remain low across the summer, with monthly ITV1 revenue unlikely to reach £100m again until September. July is currently forecast at £85m and August at around £80m.

What does this mean for the cost of a TV campaign in the UK?

To book a National TV campaign of 300 Adult ratings this June would cost around £1.0M if booked at the average ITV1 station price (£6.19). this would reach approximately 75% of all Adult viewers an average 4 times with your 30 second commercial.

But when we look at combining a wider selection of channels, which are generally cheaper than ITV, and we use a mixture of day-parts to optimize response, then we can achieve an Adult cost per thousand (CPM) of around £1.50 in June, July and August this year.

Published 23-05-2011