An industry benchmark in need of benchmarking
Every year, players in the media and advertising world share their own versions of media inflation, which is the change in cost to reach the same audience from one year to the next. Agencies, auditors, and trade groups all release forecasts, each suggesting where the market is going. These reports influence media budgets, procurement talks, and agency reviews. But there’s a problem: the numbers often don’t match, and not many people question why.
Why the numbers matter
For procurement professionals, media inflation isn’t an academic exercise. It determines:
- Budget baselines: how much extra spending will be needed to reach the same audience next year.
- Agency performance evaluations: whether the reported “savings” are real or just relative.
- Fee and bonus negotiations: these are often linked to inflation assumptions.
- Channel allocation: which media channels seem most cost-efficient?
The latest forecasts (when we wrote the article) show notable variance even among the industry’s most established sources. See below.
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The difference between 3.1% and 6% might seem minor at first, but it becomes significant when applied to a $200–500 million media budget. That three-point gap can turn a “neutral” performance review into a story of seven-figure “savings”.
The difference is significant, and for procurement, it changes everything. A one-point change in inflation on a $100 million budget means $1 million in perceived “savings” or overspending.
“The actual cost inflation experienced on a specific campaign may be very different from the calendar-year averages.” — World Federation of Advertisers (WFA) Media Outlook 2025
Where the variation comes from
So why do these forecasts differ so widely?
1. Different data sets and formats
Some reports cover only linear TV; others include digital video, CTV, OOH, print, or display. Supply and demand dynamics vary sharply by format.
As AuditStar notes, “Because different media types experience different supply and demand pressures, our estimates are made for each type with sufficient data available.”
2. Geographic differences
Media markets move at different speeds. U.S. linear TV shows minimal inflation or even deflation, while OOH and retail media are up several points.
3. Methodology and transparency
Some forecasts rely on agency invoices, others on self-reported budgets, or vendor price cards.
Some methods leave out biddable or programmatic formats completely. Biddable media means buying ad space through auctions, which is common on online platforms. Programmatic refers to the automated buying and placement of ads. These types are especially likely to see deflation, which happens when prices drop because of high supply or better efficiency.
4. Commercial incentives
Agencies may benefit from reporting higher inflation because it can justify bigger budgets. On the other hand, independent auditors usually share more conservative, data-driven numbers.
Procurement’s blind spot
Inflation assumptions are included in savings models, performance dashboards, and second-year contract clauses, but they are rarely questioned.
A one-point difference in assumed inflation on a large budget can mean millions in reported “savings.” This is not a small matter for any brand’s accounting, as many use it to judge the value delivered by the agency.
Procurement uses the numbers, but few of us understand where they come from. As showcased in the above table, there are currently multiple sources for inflation numbers.
In the past, World Federation of Advertisers (WFA) collected data from every provider — agencies, auditors, industry associations and even advertisers. Each data set was combined to create a single, aggregated benchmark for media inflation. This consolidation of data has been dismantled and now inflation numbers are published by individual entities such as agencies and auditors. This means that each group has built its own model and publishes its own version of the truth. While each method is sound within its own framework, they are impossible to compare. This development, with multiple versions of the truth, has put procurement in a tough spot. They rely on numbers they did not verify but are still held responsible for the results those numbers support. We have essentially moved from one source of truth to having to align yourself with a truth and work within that framework as you move through the term of your media contract.
Without transparency, the industry ends up grading its own homework.
One of the leading independent sources for media pricing data trends is ECI Media Management´s Inflation reports. Fredrik Kinge, CEO at ECI, warned that advertisers need to inform themselves about how to interpret the data and the methodology behind it. “The danger is that advertisers think that an inflation estimate is an objective truth that applies for all advertisers, when you in fact need to consider your specific situation when applying inflation as a factor in planning and analysis.”
Asking better questions
Procurement teams can bring clarity back to the table by asking:
- Which formats and regions do this number cover?
- What are the data sources: are they actual buys, rate cards, or estimates?
- Are certain formats (e.g. biddable media) excluded?
- Is this an average or a median?
- How are extraordinary events (elections, Olympics, major sports) handled in the numbers?
- How does this align with our brand’s)media mix and audiences?
- What would a higher or lower inflation figure mean for our agency incentives?
- “When you interrogate methodology, the forecast becomes a tool — not a truth,” says Patricia McGregor, former lead for Canada for Ebiquity.
Why it matters now
The discussion about media inflation is now more complex because pricing is driven by more than just economics. Structural and technological factors play a big role. For procurement, understanding these forces is key — not only to check the numbers, but also to see what they reveal about market power. Retail media is a good example. It used to be a niche channel, but now it is a $170 billion global market where media and commerce come together. Inflation here is not just about CPMs. It is also driven by limited first-party data, special access to retailer audiences, and more competition for closed-loop attribution. In reality, it acts more like shelf space than traditional advertising, with demand quickly pushing prices up.
At the same time, connected TV (CTV) and digital video show the opposite trend. Even though consumption is rising, oversupply and fragmented measurement are causing prices to level off or even slow down. Advertisers may see this as stability, but lower inflation can hide problems like inefficiency, repeated ads, and unverified inventory that reduce value. At the same time, AI and automation are reshaping how media is bought and priced. Algorithms now determine bid values, optimize placements, and predict outcomes in milliseconds. While this can reduce manual costs, it also obscures the logic behind price formation. When procurement asks how a CPM was derived, the answer increasingly lies inside a model, not a contract.
All of this means inflation data is no longer just an economic measure. It now reflects how the market behaves. Higher prices may show real demand or point to more middlemen. Lower prices could mean better efficiency, or they might hide a drop in quality.
For procurement, this is more than just a wording issue. It is a matter of governance. Teams that use inflation figures without looking at how they are built risk missing where value is created or lost in a world that is more automated, and data driven.
Building a better benchmark
To strengthen credibility and transparency, the industry could:
- Establish a shared taxonomy for inflation by format and geography.
- Require disclosure of the methodology for every published forecast.
- Encourage audited, multi-source averages rather than self-published data.
- Tie inflation to audience and quality parameters, not just price per unit.
- Include inflation reviews in second- and third-year performance evaluations. This often happens when a client goes to market and negotiates their media. Agencies should also offer this to their long-term, loyal clients.
A Smarter Use of Inflation
Inflation forecasts are not the problem; misunderstanding them is. When used well, they can show how the market is moving and help with negotiations. If used without care, they can distort performance reviews and lead to poor decisions.
Most advertisers use inflation figures as they are, often taking a global average without thinking about how their spending is made up. “You can’t use a global number for local reality,” Fredrik Kinge from ECI said. “Inflation in a 30-second TV spot in Italy behaves differently from digital video in Japan. But brands often benchmark both against the same percentage, and then draw conclusions about efficiency that don’t exist.”
The most successful procurement leaders, Fredrik said, see inflation as a tool for diagnosis, not a final judgment. They use it to find out why costs are changing, not just by how much. When used properly, inflation analysis helps spot bigger changes, like relying too much on high-demand formats, losing trading power, or shifting quality standards.
In short, inflation is not a grade; it is a conversation. It helps procurement teams question whether rising costs come from the market or from their own strategy, and whether the media plan still supports the brand’s goals.
Fredrik also pointed out that inflation data can reveal agency behavior. “When inflation is used only as a savings benchmark,” he said, “it rewards the wrong behavior. Agencies start optimizing for the KPI rather than the outcome.” Smart clients, in his view, “flip the script: they benchmark inflation, but also target improvements in value by bringing in media quality and marketing impact into negotiations”.
For procurement, now is the time to lead, not just follow. Inflation data should help tell a fuller story about value: how budgets are used, how reach is kept, and how quality and sustainability are maintained. When inflation is just one factor among others like transparency, performance, and brand health, it stops being just a number and becomes a real measure of business intelligence.
“The smartest clients,” Fredrik said, “don’t argue about the number — they use it to ask better questions.”
“Procurement’s real job isn’t to suppress cost — it’s to define value.”
Closing eflection
Media inflation is often seen as just a number, a neat percentage for a slide deck. But over the past decade, it has become a reflection of how our industry measures itself. When every group — agencies, auditors, and advertisers — shares its own view, the benchmark stops showing the market and starts showing the storyteller.
The bigger problem is not disagreement, but fragmentation. We have given up shared benchmarks for private ones and neutrality for self-validation. This matters because procurement needs comparability to ensure accountability. Without it, governance gets weaker, and value becomes open to interpretation.
What the discussion with ECI reinforced for us is that media inflation, when handled correctly, can be a catalyst for smarter conversations. It pushes procurement to move beyond spreadsheets and into the real dynamics of demand, quality, and performance. It can also rebuild trust between marketers, agencies, and auditors — through clarity.
Use the questions above to start your discussion with your media agency partners now.
If there is one lesson, it is this: inflation is not a final judgment on efficiency. It is a window into how the market works and how well the ecosystem is aligned. For procurement leaders, the job is not to control inflation, but to understand it and make sure the story behind the number is as clear as the math.
In a business focused on measurement, the next big advantage will not come from the lowest cost per thousand, but from truly understanding what those thousands represent.