According to the latest media inflation report from ECI, APAC has seen the most resilient media inflation of any region in 2020. The region's position has been influenced by the timing of the COVID-19 pandemic that has meant that offline was not as deflationary and digital penetration in the market allowed for increased pricing. As a result, the report, titled ECI Media Management Inflation Report Update Q3 2020, notes, 2021 will see low single-digit inflation in APAC, likely dragged down by deflationary TV in China, a big driver of the region’s offline figures.
Meanwhile, digital saturation in 2020 and resulting price hikes mean that prices are unable to grow much more in APAC. As the report notes, "the impact of the pandemic on media spends was felt differently across the world. The North American and European stories closely reflect the global one, while APAC showed more resilience in 2020, buoyed largely by China’s quick recovery from the worst of the pandemic."
According to this report, some key APAC markets are expected to follow divergent trends in 2021. For example, in China, most media types are expected to trend down, weighed down by the outsize influence of TV, with the exception of digital video and OOH, which will both see marginal increases compared to 2020.
Elsewhere, in Japan, TV is expected to bounce back, increasing 28 percentage points compared to its 2020 position. ECI anticipates that digital will drop back to its historical, flat inflationary position. In India, the recovery is even more pronounced, the report notes, except for magazines and OOH, which will stay flat in 2021.
The report predicts that overall media pricing across the world is set to bounce back in 2021. The deflation seen throughout 2020 is expected to ease; offline media is set to show optimism and resilience around the globe in 2021, and expected to be consistent with, or even higher than, online. ECI's report forecasts a 3% inflation in media. The only exception is print: both newspapers and magazines are forecast to remain deflationary at a global level, and either deflationary or with lower inflation across regions.
ECI Media Management’s global CEO, Fredrik Kinge, said: "With media inflation across the world looking set to bounce back and the vaccine offering the prospect that the world will start to reopen, we are optimistic about the year ahead for the advertising industry.” However, he said organisations will need to wait and watch how measures such as the vaccine pan out before taking a final call, but contended that with digital increasing both its inflation levels and its share of advertisers’ budgets, advertisers must understand the transparency and effectiveness of their investments in order to drive higher media value.
This report forecasts media inflation for seven key media channels every February; TV, digital display, digital video, newspapers, magazines, OOH and radio, at a global and regional level, and across 60 countries. An update to these forecasts will be published in Q3 2021.
Meanwhile, two emerging mediums have started to make a strong impact on media investment plans across the globe. This report points out that connected TVs grew rapidly in 2020 and eMarketer increased their prediction for total ad revenue from this field in the US alone to $11 billion, compared to $7 billion in 2019.
This jump emphasises the increasing importance of CTV as a channel on which to advertise; in Latin America, programmatic CTV sales jumped by 130% in Q2 in Latin America, and 100% in Asia Pacific. In sharp contrast, sd revenues for this medium dropped 50% in EMEA, possibly because many advertisers pulled or deferred budgets in Q2.
In addition, the report also noted the exponential growth of podcasts, with number of listeners expected to cross two billion by 2025, according to Omdia, up from 800 million in 2019. Ad sales could nearly triple in the same period, to $3.5 billion. Big tech companies are racing to acquire both content and technology capabilities in the field. Spotify, for example, recently purchased the advertising and publishing platform Megaphone.