UNITED KINGDOM: Prices for television advertising will fall to their lowest level since 1987 as the downturn continues to hit marketing budgets, according to forecasts from Zenith Optimedia, a media agency, financial times reported. Zenith said that in real terms, slots for UK TV cost 40 per cent less than in 1987, when it began collecting pricing data. The agency, which is part of Publicis Groupe, forecasts television advertising revenues to fall by 3 per cent next year, returning to modest growth of 2 per cent in 2010 and 1 per cent in 2011.

Ofcom calls for funding review - Sep-18Reduced ITV public service remit sought - Jul-18Ten Alps moribund material looks attractive - Jun-18Prime spectrum set to go mobile - Jun-07Honda skydivers push limits of TV adverts - May-30Police to pay TV team damages - May-15The figures came as Thinkbox, a body promoting TV advertising, released PwC research showing the damage to advertisers of cuts in TV spending.

PwC found that in 67 per cent of cases, a company reducing advertising investment more than its competitors would shrink its “brand value”  defined as the willingness of consumers to pay a relative premium over similar but unbranded products.

Increasing advertising spending, meanwhile, boosts consumers willingness to pay in 66 per cent of cases. PwC surveyed 2,500 people across 10 markets, such as airlines, mobile operators, cereals and motor insurance.

The main terrestrial channels – ITV1, Channel 4 and Five – offer perhaps the greatest value, with Zenith forecasting revenue declines of 7 per cent next year. That will be partially offset by their digital channels increasing revenues by 10 per cent, leading to an overall decline of 4 per cent at these broadcasters in 2009.

Pricing has been hit by an increase in supply of channels, falling demand from advertisers and price controls on ITV1 which mean that more viewers leads to a lower cost-per-thousand, the standard unit of TV audience pricing. A 30-second spot now costs £4.81 ($7.50) per thousand adults, the same as in 1994 in absolute terms and 29 per cent below its 2000 peak. TV budgets are particularly cut in a downturn because bookings have to be made further in advance.