Ad Prices Predicted to Inflate in 2021, and Pubs Will Benefit

A recent forecast of media ad inflation by researcher ECI suggests prices will rise by 3% worldwide in 2021, with U.S. ad prices rising at a rate higher than the global average. Broken down by different segments, that also includes a 2.4% increase for digital display media and a 2.3% decrease for magazines.

While the U.S. inflation prices rose higher, the researchers noted that North America was among the markets hit hardest by COVID, which sent “all traditional media into a deflationary position, with digital-only just remaining inflationary.

They added that print will continue to deflate, while out of home (OOH) ads — including billboards, skywriting, transit ads, wheatpaste posters next to your bodega, and more— will see extreme inflation well beyond 2019 numbers, potentially as high as 6.8%.

The researcher also predicted that publishers will eventually benefit from the oft-reported crumbling of the third-party cookie. As publishers collect first-party, proprietary data, advertisers will be forced to forge stronger alliances and collaborations with them, and that data will become inherently more valuable.

Ad tech companies, meanwhile, will benefit from increased innovation around privacy-compliant, demographic IDs, while SSPs will continue to evolve their data collection and distribution.

Media ad inflation is good for the industry across the board, and the expected sharp rise in OOH ads also suggests that, as more folks get vaccinated and want to be out and about, they will pursue IRL experiences and interactions again.

All told, calling this forecast hopeful is an understatement, although it does echo that “first-party data is bae” song we’ve been singing for some time. And it’s all the more reason to invest in clean rooms.

While this forecast also echoes the fact that pubs become more valuable to advertisers when the pub is holding proprietary data, we’re also reminded that the pandemic has pushed self-service ad platform adoption forward — another reason to be cautiously optimistic.