Results of the regular Kwendi Media Audit survey on media inflation 2020/2019

Kwendi Media Audit 08 April, 2021

2020 has been a challenging year in every respect. Past year’s events have ruined the plans and seriously influenced forecasts. Including forecasts of media inflation.

Kwendi Media Audit has been conducting surveys of leading advertising holdings and agencies and consolidating inflation forecasts in various media for 10 years. We did not bring any of our own estimates allowing the market to have a solidarity forecast. The quarterly report on the survey results has become a standard source of inflation expectations for the market.

After receiving the final inflation figures for 2020, we faced a critical situation for the first time, which does not allow us to publish the results without comment.

1. We received very different estimates of TV inflation level in 2020/2019. Opinions were divided: one part of the market estimated inflation at 10%, while another part asserted that inflation was 25-30%. After a second request, some participants clarified their data, but the situation has not crucially changed. One of the regular survey members refused to participate in the latest wave referring to manipulations by competitors. It is risky to average such different estimates, these numbers can be misleading rather than become a working guideline for market analysis. 

2. Having all the market data and the largest price pool (~35% of the market annually), we tried to verify these estimates in different ways:

- Based on UAC data on the market size and monitoring of TV advertising in the part of rating quantity in ad blocks. A simple proportion gives an inflation rate of 7%.

- Based on the market model from Kwendi TV Pool data — by applying the averaged pool data to clusters of advertisers, grouped by the similarity of volumes and types of transactions. This model gives an average inflation rate of 4%.

- If we talk about the net estimate of Kwendi TV Pool, which already includes 39% of all ratings sold in 2020 with real prices from more than 40 companies, the average inflation is 0%. It should be noted that the range of inflation within the pool is also significant — from +15 to -15%, which corresponds to the situation on the entire market in unpredictable 2020.

3. Below we publish the responses received after two rounds of the survey, with a range of ratings for illustration. For our part, we would like to note that not a single verification attempt gave us the opportunity to obtain a double-digit inflation figure. We consider the model based on pool data and market clustering to be the closest to reality for the moment.

Considering the market transparency as one of the key factors of its successful development, we will be happy to discuss the update of methodology with all the participants, which should give stable and trustable figures. We consider it important that both advertisers and ad sellers get involved in the process.

In this regard, we are not publishing the 21/20 survey yet. Forecasts differ with the same force, and against the background of changes in the sales structure, it is even more difficult to estimate the market in 2021 rather than in 2020. The record number of tenders, dumping wars for customers continue these days — all this complicates the forecast of the average inflation (or maybe even deflation) in 2021.